Last spring, a few fortunate journalists attended a truck safety seminar held by the National Robotics and Engineering Consortium of Carnegie-Mellon University in Pittsburgh. At the core of what several of the speakers presented was a startling perspective on the real, basic cause of many heavy truck crashes.
Thomas Tray, senior vice president of transportation for Marsh, Inc. in Philadelphia, spoke eloquently on managing risk and controlling losses related to truck crashes. But the surprising insight Tray offered was that you don’t save money on insurance by taking “an insurance purchase approach” but by creating a better organization.
A Federal Motor Carrier Safety Administration document distributed at the seminar reveals that “commercial vehicle crashes, like motor vehicle crashes in general, are caused principally by human error and/or misbehavior.” And, what makes humans make mistakes? Tray argues that it’s the organization.
Marsh studied shareholder value among the Fortune 1,000 companies. Those enduring the greatest drops in value were companies that owned trucks (whether they were trucking companies or had large private fleets) that also had experienced significant increases in their losses related to operating safety. The insurance dollars tied up in covering those losses turn out to be a matter that is strategic to the viability of the entire company, Tray says.
If an organization doesn’t work right from the top down, Tray says, it can “crumble the effort to create safety and control loss.” The issue is particularly critical today because down markets typically cause nosebleed rises in insurance costs. One reason for this is that insurance companies cover claims by using your premiums to buy securities, which are, of course, devalued in down markets.
Half a decade ago, Marsh hired University of Mississippi professor Steven Taylor to define the characteristics of a good truck driver. Taylor concluded that individual drivers were good or bad depending mainly upon the company they worked for. Such factors as the company’s management style, processes, departmental alignment, communications and the good and bad ways drivers felt connected to or disconnected from the company made all the difference. Safe drivers worked for good organizations. Period.
Tray isn’t alone; he was one of several expert presenters at the conference who said essentially the same thing. Bad fleet organizations make bad drivers. If the company president is stressed, the dispatcher is stressed, and if the dispatcher is stressed, the driver gets stressed. If the driver is stressed, he screws up.
About a year ago, I wrote about Peters Bros. Trucking of Lenhartsville, Pa. Although owner Gerald Peters operated 18 trucks, he still drives full time. Peters also operates a brokerage to handle freight for the customers he can’t handle with those 18 trucks because he is afraid of getting too big because then he couldn’t be on the road and in touch with drivers’ experience.
In every way, Peters Bros. is organized around making it easy for drivers to perform without undue stress or fatigue. This structure includes a staff of local drivers who pick up loads for the long distance drivers, so they begin each journey by slipping the key into the ignition and hitting the Interstate, not with the hassle of waiting to get loaded.
Is your operation engineered around people? Or is it the reverse? At every turn, the organization must function in such a way that the driver, who carries the whole organization on his shoulders, ends up being the center of attention. Unfortunately, that’s not the norm we have come to expect, and it could be a hard sell, especially for very large fleets. Still, it’s vital that you consider the effect on drivers’ ability to comfortably accomplish the work in every management decision you make.
John Baxter is senior associate editor of Commercial Carrier Journal. E-mail [email protected].
