You should pay special attention to every component that can affect any part of your insurance program. Generally speaking these are the drivers, equipment and contract Master Service Agreements with shippers to ensure any problems are resolved before they happen. Installing procedures to ensure no driver ever leaves the yard with a faulty piece of equipment and without the proper CDL type matched to the asset being driven will save you money. Having your lights all working properly, brakes properly adjusted, tires at proper depths and inflation pressure, hoses in good condition and the cleanliness or lack thereof the tractor and trailer can be the difference in getting pulled over or bypassed by enforcement agencies. Also the culture of your business will make a huge difference in the way you are perceived by the outside public. Create the right impression by having the right attitude with law enforcement and with insurance loss control personnel. You are in a highly regulated industry with governmental agencies just waiting to get a shot at coming in your doors to review your operations and find something to fine you or write you up for.
Important Insurance items:
1. Control your agents, they are working on your behalf and should consider it a privilege to be able to be involved with your company. Set the rules for them as to how you want each insurance line rated, deductibles, financial strength of the insurance company and the final date to have proposal to you, then stick to it.
2. Drivers List, be sure to keep up with years of experience even though DOT doesn’t require it, this will help. Years’ experience can be calculated automatically each year on the drivers list from assumptions.
3. Projections for Mileage, Revenue and Units and Values, don’t let the agent determine these. When the agents present the proposals to you be sure to check this against what they are proposing. Finally, check the rating basis when the policy comes in against what you asked them to use, resolve any discrepancies.
4. Garaging locations with assets that are parked there. Be sure to be completely upfront here as some insurance companies are not filed with the some state insurance boards.
5. Keep up with losses over $20,000 in value and give every detail to your agents.
6. CSA Basic Score above the 75% threshold will cost you money.
7. (CAB) Central Analysis Bureau is being used by almost every insurance underwriter to evaluate your business and will determine if you’re offered a renewal or an initial proposal. This entity is giving you a grade on: safer data, radius of operations based on inspections, financial health, accident and inspection details. So keep those CSA scores in the non-alert status.
8. Be sure you give the agent a breakdown of your routes and radius of operations; they need 8 quarters of IFTA’s. If you have multiple terminals or are utilizing Owner Operators that are dispatched from home then the actual distance traveled for routine shipments can vary.
9. Make sure your agent has a direct appointment with the insurance company they want to approach. Having a direct appointment your agent has the underwriter’s ear and can communicate better on your behalf. There are a few exceptions where the insurance company does not have direct contracts available (Carolina Casualty, Maxum Specialty, and Northland to name a few).
Next you probably get multiple sales calls from agent making all kinds of claims:
Insurance Myths:
1. Hey I can get you better pricing by writing a short synopsis of your operations.
2. I can save you 20% on your insurance when the guy has never looked at your loss history or your account.
3. I need more time to get your quotes; I am beating up on the underwriter and will have your best number a day or two before time has run out to renew your account.
4. The insurance company told me they are going to get you really good pricing; they just have to firm it up.
5. I need a particular insurance market because I am the largest writer with them and I will get preferential pricing.
6. I’m sorry I can’t get your loss history to you quickly it takes two weeks to get back.
Of course, none of the myths are true and if you are working with an agent that keeps you strung out each year give me a call. I will work with your directly as an agent or we can discuss a consulting agreement to handle all your insurance needs. If we all try our best to keep this process as God honoring and professional as possible the outcome for all will be consistently better.
Tracy Lange, CIC, LRM
Capps Trucking Agency
tlange@cappsinsurance.com
903-434-4720
When did you last review and revise your company’s driver/vehicle safety policy? What is it’s “expiration date”?
Creating an effective, enforceable safety policy to govern how drivers drive, how vehicles get maintained, what to do in the case of a crash and so on is vitally important for a host of reasons:
1. Education: you need to communicate your expectations as a management team so that the drivers know what to do and how to do it.
2. Compliance: your standard provides a benchmark for enforcement of minimum acceptable performance.
3. Anticipates contingencies: well-crafted and communicated policies enable managers to deal with the vast majority of situations that may arise during a day, week or month without having to seek guidance from above while providing an escalation path for true exceptions.
One thing that the best policy can’t become is “timeless” — the world changes around us continually and as new technologies are introduced and case law is established our policies need to be reviewed to determine whether these changes warrant a revision to the policy.
Setting an artificial “expiration date” on driver/fleet safety policies would be one way to assure that the review is scheduled, budgeted and completed on a periodic basis. Assuming that policies will be reviewed and revised “on the fly” as changes occur may be fruitless as the demands of the moment may rob even the most dedicated manager of the time needed to complete the review/revisions in a timely fashion. By scheduling the review in advance, the manager can take a deliberate approach to the review.
Self-Audit Against an Industry Standard
One way to assure that any policy review is comprehensive would be to conduct a self-audit of the existing policy against a published industry standard or benchmark. The ANSI Z15.1 “sets forth practices for the safe operation of motor vehicles owned or operated by organizations” and was most recently revised in 2012. The standard covers seven key areas including “Definitions, Management, Leadership and administration, Operational environment, Driver considerations, Vehicle considerations, Incident reporting and analysis.“
While the standard may not cover all details of a specialty operation with unique exposures to loss, it does provide a baseline for comparison. For the vast majority of fleets, it will cover those critical areas that are found in most driver/fleet safety policies.
Fleets who discover gaps in their current policy can document why the gap exists and whether the gap should be filled or ignored (i.e. the fleet doesn’t engage in that type of operation or the scenario will not present itself in the context of the fleet’s current or anticipated operations, etc.)
Paul Farrell
CEO
SafetyFirst Systems
Parsippany, NJ
paulf@safetyfirst.com
Lord knows I heard this a million times from mom and dad when I was growing up. Being the mischievous child that I was, it was well justified. But one thing I can always remember wanting was a real reason. It wasn’t even that I ultimately disagreed with my parents that I shouldn’t be doing whatever it was they asked me not to, but I wanted to know why. “Because I said so” just didn’t seem to cut it for me.
Now, as a parent of a three year old and four year old boy, I catch myself saying this to them often. They are still very young, so when I say “because I said so”, if often works. And when it doesn’t, they just keep asking why because that’s what a three and four year old do I guess. I like to think that when they are a little older and I instruct them to do something and they question why, hopefully I will be able to give them substantive reasons (but probably not because it is a rite of passage after all to be able to say “because I said so”).
But in the world of trucking, trucking companies, and our drivers, we are all adults and “because I said so” just doesn’t fly. Sure, it’s still used often because that is the nature of the employment relationship at times, but we should strive to offer drivers something more, something substantive to back up the requests we make of them. We should particularly strive to offer drivers something substantive as to why CSA scores matter to the company and to the driver, and why drivers should always be seeking to improve their behaviors to avoid roadside violations. Sure, “because I said so” is a valid reason when the company is the one paying the drivers and experiencing the consequences of CSA violations, but offering something more can have a positive impact on company safety.
Next week I will discuss some of the issues with CSA scores and how to exclude their admission in lawsuits. But for the moment, CSA scores are out there, available, and the FMCSA ain’t budging! So what can we do to improve CSA scores in hopes that their admission is a non-event on the day of reckoning? We can train our drivers to know what is at stake.
So what should your drivers know:
• When CSA was originally implemented, it was feared that there would be a mass layoff of drivers due to the occurrence of roadside violations affecting CSA scores. However, a 2011 survey by ATRI revealed that the impact on driver hiring has been far greater than the impact on driver firing. Less than 5% of the surveyed carriers reported terminating drivers as a result of CSA scores. However, almost 75% of the surveyed carriers reported stricter hiring standards due to the increased scrutiny, such as the use of the Pre-Employment Screening Program. Drivers should be made aware that their performance could ultimately lead to their dismissal from a company, but more importantly, that it may drastically affect their ability to gain employment in the first place if their performance is poor.
• According to Transport Topics, liability insurance is becoming increasingly difficult to obtain and afford due to CSA. For carriers that are doing “ok” on their loss history and one or less CSA alert, they are still seeing increases of 5% on premiums. However, for those not doing “ok” and with two or more CSA alerts, premium increases of 15-20% are incurred. And what this means for companies is it becomes increasingly harder to hire drivers with a loss history because of increased insurance premiums. Insurance underwriters look at how a company is managing risk and the results of the company, which ultimately means they are looking at CSA scores.
• Speaking of dismissal, a 2012 survey by Transport Capital Partners found that 63% of carriers changed how sub-performing driving is monitored in order to comply with CSA enforcement. Most carriers have driver handbooks, and most handbooks have procedures in place for dealing with driver performance issues. It is important for the company to follow their policies and enforce performance discipline strictly and consistently. And it is of greater importance that drivers know that policy will be strictly enforced. An unenforced policy is no policy at all.
• Companies may have on-staff CSA managers, or at least operational personnel, that drivers need to be made aware. Drivers should know that they have access to these individuals to discuss driver performance issues and CSA violations. Likewise, CSA managers and operational personnel should check in with drivers often about any questions or concerns that drivers may have about their current performance, and just life in general. A driver’s personal problems, such as trouble at home, financial problems, etc., are a company’s problem. Personal problems cause distraction, and distraction causes accidents and violations. Operational personnel should address driver issues with them, trying to help them, because these same drivers generate a company’s CSA scores.
• CSA ratings and knowledge about them is not just a company problem. It’s a driver issue as well. And training drivers on the “ins and outs” of CSA and how it effects the company is imperative for maintaining and improving company CSA scores. Currently, there is a lack of driver training by carries on the impact of CSA scores, although more and more training courses are becoming available. What is interesting though is that increased training is not translating into better knowledge by drivers. Training upon hiring is required; but on-going training is imperative to create a safety culture within a company. One of the best ways to act on this is to stay on top of hiring, training and monitoring of driver’s performance and have a structured program in place that involves the drivers and informs them of the importance of CSA and how it works. If everyone within the company understands the importance of CSA scores, from the top down to the bottom, safety will follow. When everyone within the company is on board, particularly those in safety and those in operations, you avoid the conflicting goals that drivers can’t process.
• In the age of CSA, shippers and brokers are looking more and more at CSA scores when selecting a carrier. Drivers should be aware that what happens with them on the road effects the business that comes in to the company. Negative effects steer business away. And when business steers away, company financials suffer and people, i.e. drivers, find themselves without a job. In today’s current trucking economy, profit margins are fine as frog hair, and CSA violations should not be your tipping point between profit and loss.
• Driver education on CSA scores becomes even more important when you consider the planned implementation of a Driver Fitness ratings system being pushed by FMCSA. While the program is a long way off, 9 years according to the FMCSA, it has been sent to Congress and seems to be gaining traction. If implemented, like the current CSA system, individual drivers would be rated and those at the highest risk for safety issues would be targeted for enforcement.
Whatever the method you choose based on your resources, the important point is to inform and train your drivers on CSA so they understand why it matters to you.
M. Garner Berry
Markow Walker, P.A.
599 Highland Colony Parkway, Suite 100
Ridgeland, MS 39157
(W) 601-853-1911
(C) 601-316-6510
(F) 601-853-8284
gberry@markowwalker.com
Do you build a high performing team through superior selection or excellent OTR training? Remember the old proverb: you can teach a squirrel to fly but you’re better off starting with an eagle?
There’s truth there, but there aren’t as many eagles flying around as there once were, so perhaps we should consider better training. That said, it’s still wise to invest in aeries.
Analogies aside, the challenge you face is how to how to build and maintain a motivated team of professional drivers, despite the headwinds of the dreaded driver shortage.
Dr. Peter Cappelli, Director of Wharton’s Center for Human Resources, authored a great fact-filled book, Why Good People Can’t Get Jobs. He finds that even in times of high unemployment, companies across dissimilar industries can’t seem to find capable employees. They insist applicants aren’t qualified; schools aren’t adequate; or the government isn’t letting in enough skilled immigrants. What we have is a woe-is-me mindset and driver-hungry carriers are convinced that driver recruitment is like hunting for polar bears in Arizona.
Training Gap
Capelli asserts the problem is a combination of inflated expectations and a training gap. He points out that everyone is looking for applicants who can hit the ground running. Here’s how companies think:
1. With high unemployment, we should be able to get what we want (no training required);
2. We can save money by cutting training or by delaying purchase of updated materials;
3. If we train new employees, they’ll just leave for greener pastures, taking our investment with them.
Further, some applicant-screening software programs have corrupted the hiring process by defining the wrong qualifications as must-haves. This and the ubiquitous stories of a driver shortage have heightened the impression that there aren’t enough people with the right stuff.
Based on Dr. Cappelli’s reasoning, I would argue that there are enough CDL drivers with the right qualities (when you get serious about competing for them), but you need to define what’s needed versus what’s wanted. He tells the story of a temp who’s doing a great job. The employer can’t seem to fill the job she’s covering. Someone asks, “Why not hire her?” The answer: “She’s not qualified.” Huh?
Sure, driver applicants have to meet the minimums: CDL, 21, medically qualified, etc. And they should have key traits like responsibility, dependability, compliance and risk aversion, which are vital to safety, productivity and good customer service. In short, you should hire drivers for the characteristics that cannot be taught. Know-how and skills can be taught.
When did we start to believe that drivers would be finished from day one; that they’d assimilate our values without having a structured process to help them? When did we convert driver training to an exercise in CYA/check-the-box, instead of truly giving them the knowledge and skills needed to safely and efficiently perform the job?
Assess For Personal Qualities
The right model is to first find drivers who have the minimums (table stakes), but also assess for the personal qualities that make them safe dependable drivers. Then, provide effective, up-to-date training programs to take it from there.
Many may believe that they’re already doing this, so let me be more specific.
• If you require applicants to be 23 years old, why not 22? Then provide exceptional training.
• If you require two years of experience, why not one? Excellent training can supplement.
• If you require unique experience, like tankers, why not consider dry van drivers and then teach them tanker-specific skills and knowledge?
Dr. Cappelli cites Con-way as a sparkling example of taking initiative to solve the driver conundrum through training. In 18 months they graduated 440 new drivers and held onto 98 percent of them!
Hire for the things you can’t change: minimum qualifications and characteristics that resist change such as values and personality. Then provide meaningful professional safe driver training. Not a sheep dip. Not CYA, but something that leads to real learning and new behaviors.
You can’t expect old, feeble training materials that didn’t cut it ten years ago to magically begin to work today. Times change and training should change with the times. Half the battle is keeping drivers engaged and interested. If your training can’t bridge the gap, it’s time to look for better training materials.
Aeries are nests where baby eagles are nurtured until they’re self-sufficient and can fly on their own. The best aeries produce the best eagles. Nurture your drivers with better training.
Mark G. Gardner
Chief Executive Officer
Avatar Management Services, Inc
Macedonia, OH
www.avatarfleet.com/wp
There’s no question that fleets need to review driver abstracts (or Motor Vehicle Reports – MVRs) on their drivers to identify any trend or pattern in past moving violations. The American Transportation Research Institute (ATRI) has connected the links between receiving a violation and increased risk of subsequent collision in two studies – Predicting Truck Crash Involvement 2011 Update (their original study was released in October of 2005).
As recently reported at a fleet safety conference, two similar fleets had chosen to use the same standard for MVR review — exclude violations greater than 36 months old and allow for a combination of three violations and one preventable crash before suspending driving privileges. One of these fleets tightened their standard to two violations and one crash during the most recent 24 months and saw a five point reduction in collisions (from 22% of their fleet vehicles involved in a crash per year to 17% of their vehicles involved in a crash) and $2 million in savings.
Since not all violations represent the same level of risk taking, targeting specific types of violations would be expected to further enhance the results. The ATRI study showed that the occurrence of JUST one of the following moving violations dramatically increased the likelihood of becoming involved in a crash by the following amount:
• Failure to use or improper turn signal: 96%
• Improper passing: 88%
• Improper turn: 84%
• Improper or erratic lane change: 80%
In comparison, speeding more than 15 mph over the speed limit — which most safety mangers would likely target as a clear indicator of a risky driver — increased the overall crash risk by only 67%.
Analysis of data revealed that driving behaviors (measured as violations, convictions and historical crashes linked to specific drivers) are linked to specifically measurable increased risk of becoming involved in a crash. Perhaps more notable is the conclusion that:
“By becoming aware of problem behaviors, carriers and enforcement agencies are able to address those issues prior to them leading to serious consequences. The converse is also true, however, as lower priority behaviors, if ignored, may begin to play an increasing role in crash involvement.”
In simpler terms, if you take the time to look for behavioral issues and do something about them, you can directly influence your crash rates. Similarly, if you ignore behaviors deemed to be “low priority” such as failing to use turn signals, these habits can develop into an increasing role in crash involvement.
Paul Farrell
CEO
SafetyFirst Systems
Parsippany, NJ
paulf@safetyfirst.com
by Avery Vise in Down the Road
On New Year’s Eve, the Federal Motor Carrier Safety Administration announced that it had shut down two affiliated South Carolina trucking operations and the owner-driver of one of them as “imminent hazards to public safety.” The agency’s actions certainly seem appropriate. The owner-driver of one company was involved in a fatal crash on Nov. 27 while driving without a commercial driver’s license. And it appears that the other company, for which this driver was operating at the time, employed three drivers that weren’t qualified. And it only had four drivers total.
Sure, it’s good that FMCSA took these carriers off the road, but a closer look at the situation reveals something troubling. If you look up the companies involved – CER Trucking (USDOT No. 196777) and Edward Risher Trucking (USDOT No. 685781) – in FMCSA’s Safety Measurement System, you will find that one company has no “golden triangles” while the other has just one for the Controlled Substances and Alcohol BASIC.
Based on the SMS data alone, these carriers don’t look that bad. Consider that a carrier could easily cross the intervention threshold based solely on one inspection that indicated possession – not necessarily even use – of drugs or alcohol. What the SMS profiles of CER Trucking and Edward Risher Trucking really highlight, however, is how blind the SMS and FMCSA’s Compliance, Safety, Accountability program are to very small trucking operations.
Aside from the alert on controlled substances and alcohol, there was insufficient data in the SMS to give CER Trucking a score in the other four public BASICs; it had undergone only five total inspections in the past 24 months. Edward Risher Trucking was a blank slate with no inspections at all.
A snapshot of CER Trucking’s SMS page indicating the current operating status of the carrier.
The lack of data is hardly surprising considering that between them CER Trucking and Edward Risher Trucking operated just three trucks. Perhaps as individual operations, carriers of this scope aren’t a high priority. As a group, however, they are a huge player in trucking and highway safety. In the latest census uploaded on the SMS website, 772,045 motor carriers had just one or two trucks – about 74% of all carriers in the database. So FMCSA needs an effective way to oversee these small operations, and CSA just doesn’t get the job done.
In theory, FMCSA could identify weak and downright bad small operations if it had more inspection data, but the trend is in the wrong direction. The total number of inspections fell about 6% from 2009 to 2012. Although roadside inspections were about flat, traffic enforcement inspections plummeted by about 34%.
To a lesser extent, the record and fate of CER Trucking highlight another issue: FMCSA’s failure to act proactively. The inspection that led to CER’s golden triangle in controlled substances and alcohol stemmed from a Feb. 12, 2013, report in which a driver was using or was in possession of drugs. That violation showed up almost immediately in FMCSA’s database, and the carrier has been above the intervention threshold since the February 2013 data run. And based on an inspection conducted in late September – also reflected immediately in the federal database – it was clear that at least one of CER Trucking’s drivers was operating with a suspended CDL.
A snapshot of Edward Risher Trucking’s SMS page indicating the current operating status of the carrier.
The CER Trucking situation arguably underscores the National Transportation Safety Board’s recent criticism of FMCSA’s safety oversight. “While FMCSA deserves recognition for putting bad operators out of business, they need to crack down before crashes occur, not just after high-visibility events,” said NTSB Chairman Deborah Hersman in calling for audits.
Perhaps it’s unfair to cite CER Trucking as an example of FMCSA’s failure to be proactive. Certainly you would not expect FMCSA to prioritize a two-truck operation for scrutiny. But if that’s the case, then FMCSA should not get much credit for shutting down CER Trucking either.
Ultimately, FMCSA and its state partners can improve safety only by devoting more resources to safety oversight, and that costs money they don’t have. It’s not even clear that they are spending the money they do have wisely. Putting aside legitimate gripes over SMS methodology, this sad reality seriously undermines CSA’s integrity, especially considering that CSA data is public and not just an internal enforcement tool.
Perhaps one day technology and automation – universal electronic logs and wireless roadside inspections, for example – will substitute for “boots on the ground.” For now, however, we must accept that motor carrier safety oversight is inherently flawed because it can’t target the very operations that need it most.
