The Cost of Risk: No need for speed

The next big issue in motor carrier safety may be speeding. Several major truckload carriers have suggested that a nationally mandated governor on large trucks is a good idea, and the American Trucking Associations is exploring the idea of a joint study with the National Highway Traffic Safety Administration to determine whether the benefits of such a requirement would outweigh the costs, David Osiecki, ATA’s vice president of safety, security and operations, said last month at the annual forum of the Federal Motor Carrier Safety Administration’s Office of Research and Technology. NHTSA concluded in 1991 that governors couldn’t be justified on a cost-benefit basis, but that was before the lifting of the national 55 mph speed limit and before traffic congestion reached today’s levels.

No one questions that speeding is a problem from a safety perspective, but there is evidence to suggest that it’s the No. 1 indicator of future crash risk. And excessive speed leads to other problems that can have a direct impact on the bottom line, such as higher insurance premiums, reduced fuel economy and, indirectly, fines from the Feds.

A forecaster of loss
The safety risks related to speed relate mostly to how large trucks interact with other vehicles. Recognize first of all that two of the most costly accidents from a public liability perspective tend to be rear-end collisions and crashes related to lane changing.

About three years ago, Dayton, Ohio-based Jet Express set out to verify the conventional wisdom that speeding leads to these dangerous conditions. In a two-week period over the same 34.9-mile section of I-75 at the same time each day, the carrier compared lane changes and brake applications at 65 mph versus 55 mph, says Jeff Davis, vice president of safety. At 65 mph, brake applications, which indicate speeding that could lead to a rear-end collision, were higher and on average the number of lane changes doubled, he says.

So it’s not surprising how much weight the insurance industry gives to evidence of speed – i.e., moving violations. Great West Casualty Co. uses a risk index to assess insurability. The index equates four moving violations in the past 36 months with having a major accident within the same timeframe, being medically unqualified or having less than one year of verified driving experience.

According to Jim York, manager of the transportation team for Zurich Services Risk Engineering, the quality of a driver’s motor vehicle records is, bar none, the most accurate criterion for assessing his risk from a loss control perspective. “We know that companies with a higher percentage of clean MVRs have better five-year loss histories than companies with lower MVRs,” York says.

York believes that MVRs are more useful in risk assessment than even accident history because accidents are relatively infrequent events. Some academic research from the University of North Carolina’s Highway Safety Research Center also suggests a stronger correlation between crashes and traffic violations than between crashes and driver and vehicle out-of-service rates. Employing drivers with marginal MVRs is risky in the aftermath of an accident as well; carriers could face allegations of negligent hiring or retention.

A target for enforcement
Another risk associated with speeding is that it draws the attention of law enforcement. Experience has shown that at least a third – and possibly a majority – of roadside inspections are triggered by a moving violation, Davis says. “We might as well hang a neon sign on the side of our trailers saying, ‘Come and inspect me.’ ”

More inspections risk more violations, which lead to a deterioration in a carrier’s SafeStat score. When that happens, the carrier faces a less favorable inspection rating, going from pass to optional or from optional to inspect. The result is a vicious circle, with more inspections generating still more inspections. Ultimately, such a spiral could lead to a compliance review, during which your speeding drivers likely will be targeted once again.

True, many drivers bristle at active speed management. But do you really want those drivers?