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July 29, 2011

Trucking Safety and the Bottom Line

Like all commercial enterprises, trucking firms are in business to make a profit. Without trucking firms, the U.S. economy would collapse. Rising costs, however, concern both trucking firms and companies that rely upon them to transport their goods. Like other economic sectors, the Great Recession was hard on the trucking industry. Fortunately, things look to be improving. "Seventy-one percent of trucking company executives surveyed by GE Capital, Transportation Finance expect business conditions to improve in 2011, but they are concerned about the impact of external and internal factors on their profit margins. The rising price of diesel, a nationwide shortage of drivers and the twin costs of complying with government regulations and maintaining their own aging fleets are all significant concerns." ["Positive Outlook for Trucking Industry Tempered by Rising Operating Expenses, Survey Finds," SupplyChainBrain, 28 April 2011]

Among the internal and external factors that trucking companies must consider is safety. Every good trucking company has a risk management program that includes maintenance of vehicles and operator safe driving practices. Safety is high on the list of risk factors because lawyers are gunning for companies operating big rigs. We've all seen commercials featuring lawyers begging potential clients to contact them if they have been in an accident with a tractor trailer. They believe that trucking companies and their insurers have deep pockets. The following video is typical of such commercials.

You can't blame lawyers for seeking clients and you certainly can't blame victims for seeking damages. Accidents do happen. As a result, trucking companies must do everything they can to protect themselves as well as the public. According to the GE Capital survey, "executives said their biggest challenge will be recruiting and hiring quality drivers." The operative word in that sentence is "quality." Quality drivers have superior driving skills as well as a willingness to follow company policies. Trucking executives also told pollsters that "they are concerned about the operational costs of complying with recent government regulations related to the hours that drivers may work and the reporting of safety, compliance, vehicle, driver and regulatory violations to the Federal Motor Carrier Safety Administration, which regulates the U.S. trucking industry."

There is likely to be a lot of frustration involved in complying with new federal regulations. The following story is just one example:

"Keith Tuttle manages a fleet of trucks he says is making a narrow profit hauling empty aluminum cans from manufacturers in northwest Ohio to beer and soda makers in New Jersey, a 550-mile trip that takes 11 hours of driving for next-day deliveries. The trucks return with full cans for retailers in Ohio. But under proposed federal rules aimed at improving highway safety by limiting daily driving hours for commercial truckers, Mr. Tuttle's drivers would get only about as far as Harrisburg, Pa., about 60 miles short of their destination, before having to take a break for the day." ["Truck Firms Gird for New Limits," by Angus Loten, Wall Street Journal, 7 July 2011]

Although making a driver stop 60 miles short of his or destination sounds illogical, "Federal regulators say the measures are necessary to prevent highway fatalities caused by truck-driver fatigue, which was cited as a possible cause in the deaths of six people [in June 2011] when an 18-wheeler plowed into an Amtrak train in Nevada. ... In announcing the proposed new rules last year, Transportation Secretary Ray Lahood said a 'fatigued driver has no place behind the wheel of a big commercial truck.' He said the department was committed to hours-of-service limits that ensured drivers were rested and alert." Trucking executives like Tuttle, however, believe that the old regulations were working just fine. Loten reports:

"According to Transportation Department data, the number of highway fatalities involving trucks has declined over the past decade, hitting a record low of 2,987 in 2009, down from 4,204 in 2007. Over the same period, the number of truck accidents that caused injuries dropped to 51,000 from 72,000."

Although 4,204 annual fatalities are still way too many, given the fact that the numbers are trending in the right direction, trucking firms wonder why the new regulations were deemed necessary. "They say the burden of the new rules would fall hardest on small trucking firms, which wouldn't be able to adapt to them as readily as larger companies with fleets of tens of thousands of trucks." Loten continues:

"The rules, proposed in December by a Transportation Department agency, would cut the daily driving limit for truck drivers to 10 hours from 11 hours. They would require drivers to be off duty for 34 hours, including two full nights, once they reached their driving limit for the week. The agency also has proposed shrinking work shifts for truckers, which might include loading or unloading, to 13 hours a day from 14 hours and requiring a 30-minute break after seven straight hours on the road. Trucking companies would face fines of as much as $11,000 for exceeding the new limits."

Joe Rajkovacz, director of regulatory affairs at the Owner-Operated Independent Drivers Association, claims that "horrific crashes like the one in Nevada have given the trucking industry an image problem it doesn't deserve." He told Loten, "It's easy to beat up on big bad trucks, but the reality is very different." I would venture to say that most big rig drivers are professionals who are proud of their driving records. Reality television shows like Ice Road Truckers have even made celebrities of some of them. Professional truck drivers are no happier to see big rigs involved in accidents than anyone else. Nevertheless, the new regulations probably rub some of them the wrong way as well.

Even if the new regulations had not been put in place, economics might have made the highways a little safer. According to Jeffrey Ball, companies are imposing speed controls on drivers to cut fuel costs. "Safety advocates say slowing down 18-wheelers saves lives as well as fuel." ["Firms Put Brakes on Truckers," Wall Street Journal, 11 July 2011]. Ball reports that truckers like Gary Vann pine "for the days when [they] could put the pedal to the metal ... and hurtle down empty stretches of highway at 100 miles per hour," but those days are over because going fast sucks up fuel. Ball continues:

"Several big companies have tweaked the computerized governors on their trucks' engines in recent months, dialing down the top speed. Mr. Vann's employer, Titan Transfer LLC, cut it to 65 mph from 70 mph. Titan also drops extra cash on drivers who know how to get the best fuel economy out of their rigs, and puts extra pressure on the leadfoot."

Since most drivers are paid by the mile, slowing down doesn't make them very happy and it can put a significant crimp in their take-home pay. Ball continues:

"To truckers across the U.S., the new controls—the industry's latest attempt to wring better economy from its fleets—spell the end of a romantic age, powered by cheap diesel, when drivers could do pretty much as they pleased on the open road. Gone are the days of open-throttled hauling made famous by 'Smokey and the Bandit,' the 1977 movie starring a suave Burt Reynolds, in which a tractor-trailer shreds the speed limit on a cross-country beer run. At highway speeds, every decline of five mph improves an 18-wheeler's fuel economy by about half a mile per gallon. Titan spends roughly $24 million a year on diesel and expects 'huge' savings from the five-mph cut in its trucks' top speed, said Tommy Hodges, the company's chairman, who declined to give specific numbers. Mr. Hodges said Titan was trying to teach its drivers to cruise, as much as possible, at a steady speed instead of constantly speeding up and then slowing down, which slurps fuel. The ideal, he said, is to drive 'like there's an egg under the accelerator.'"

During the Cold War, President Reagan, speaking about nuclear arms agreements with the Soviets, famously said, "Trust but verify." That could well be the motto of some trucking firms. According to Ball, "today, a driver's every move is electronically recorded and relayed back to the dispatch center, where supervisors pick the data apart." He continues:

"Key to the system is a gadget some drivers liken to Big Brother: a black box in the cab that's wired to a satellite dish near the roof and beams all the juicy details back to the company in real time: the truck's location, its speed—even what gear it's in, as trucker Doug Andersen learned the hard way last month. Mr. Andersen, whose truck is governed at a maximum of 65 mph, was cruising downhill on Interstate 15, heading from California to Utah, when he slipped his rig into what truckers call 'Georgia overdrive,' a guerrilla move to override an engine's governor. He shifted the moving truck into neutral, letting gravity speed it up. When the speedometer neared 80 mph, the legal speed limit on that stretch of road, a red light flashed on the gray, tablet-size computer wired into the truck's dashboard. Snagged by his superiors, who call the move dangerous because it makes an 18-wheeler hard to control, Mr. Andersen pulled his truck over and called the dispatcher for his tongue-lashing."

Like it or not, technology in the cab is here to stay. Blog reader Rajiv Rao contacted me about another technology that can be used to enforce safe driving policies and why such a technology is important for trucking companies. As his company's (ZoomSafer) site states, "Use of a cell phone while driving on the job is a common behavior in corporate America that poses massive risk to any employer who permits it to happen." To drive the point home, ZoomSafer produced the following video.

I think that it is fair to say that most people grate under constant scrutiny. And who likes to be inconvenienced by not being able to use mobile devices while driving? The fact of the matter is, however, that the cost of driver distraction can be very high indeed. The number of horrendous accidents over the past few years that have involved "texting" drivers (most of them not truck drivers) has turned the public against the practice. Despite the fact that 1 in 4 drivers admit to texting while driving, "an overwhelming majority of Americans believe that texting while driving should be illegal, a ... CBS News/New York Times survey finds, with 97 percent saying the practice should be outlawed. A mere one percent says that the practice should be legal." ["Poll: Texting + Driving Should be Illegal," CBS News, 28 October 2009] Even though the public understands how vital the trucking industry is to the country's economic well-being and their own quality of life, when it comes to safety on the roads, big rigs are often viewed as a problem. As a result, a continued emphasis on safety is in a company's best interests and an essential way to help protect its bottom line.

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