Managing the Financial Side of Commercial Fleets

Four Elements of an Effective Safety Program

July 2016, by Bob Stanton

Photo courtesy of iStockPhoto.com
Photo courtesy of iStockPhoto.com

Every fleet professional will agree with the truism that safety is a strategic imperative. He or she will also agree, regardless of his or her industry, that the best way to lower accident costs is to eliminate accidents, altogether. But, if these statements are true, why are there such aggressive debates about safety and how to fulfill the objective at the heart of both statements?

Every company adopts a safety culture that matches its tolerance for risk. A company’s tolerance variables are a reflection of the mindset of senior management, most of whom appreciate and understand the benefits of an aggressive safety culture. However, some unfortunately do not. Lost in translation is the “strategic” aspect of that imperative; the strategy is often lost either in discussions about the cost of safety programs or amidst confusion about how best to adopt and implement a strategy that matches a company’s cultural imperative.

Safety Becoming High Profile

Regardless of where that culture lies on the tolerance scale at each firm, it seems that today, safety is receiving a higher profile and more attention. Senior and operating managers comprehend the costs of risk and seek to mitigate it, but are finding it difficult to know how to move the needle in a tangible way. They desire a culture that elevates safety performance by positively modifying employee behavior toward safe practices and one that instills employee consciousness of the importance of safety. Recognition and adoption of this safety culture is particularly needed among company drivers who operate independently outside of ongoing oversight and supervision.

At a Glance

To have an optimized fleet safety program requires four elements:

  • Improved MVR checks.
  • Targeted driver training.
  • Making accountability matter.
  • In-house actions for everyone.

Fleet, risk, safety, and senior managers understand the positive impact accident reduction has on their operating costs, total ownership costs, and employee productivity. They seek the best “strategic imperative” that is the best fit for them. When it comes to safety, they often are unaware of the knowledge they lack and their decisions reflect that.

When considering safety measures, it’s easy to get sidetracked from return on investment confusion and a lack of cost viability. Accepting that a shift toward a more aggressive safety posture will not yield immediate positive quarterly or annual operating results is often counterintuitive to executives who live and die by those results. Such a shift requires wisdom and patience to realize that effective safe practices will pay off, just not in the short term.

In today’s world, qualified drivers (and technicians) are an increasingly scarce commodity. According to some studies, the cost of driver turnover can range from $2,000 to $9,000. Although employee recruiting and retention are increasingly being appreciated, unfortunately, employee accountability is a key but often missing performance element in a safety program. With a scarce pool to draw from, finding and retaining high quality drivers (and technicians) is more important than ever. Instilling a robust attitude of safety within employees selected from that pool requires vision and commitment.

In today’s marketplace, a plethora of high-quality, third-party safety offerings are available. Companies with a clear vision for enhancing their safety cultures recognize the importance of a holistic approach to safety. They select the best elements of the many competing strategies, crafting an effective program tailored to their own specific requirements.

Following are the four strong foundation stones that can be used to build a robust safety program. Fleet professionals reading this may have some of these elements in place today, but might not have linked them into that culture due to silos of responsibility or other reasons. A culture of safety, while assuredly a company-wide effort, must be “owned” by one department that manages and is held accountable for the program itself. Following are suggestions and recommendations that can be used to augment their current program to make it more effective and results oriented by injecting levels of accountability and performance monitoring they may not have considered.

These four elements, while individually effective, if used together will knit the fleet’s safety program into an effective system of ongoing monitoring and accountability that is easily implemented and surprisingly cost effective.

Element #1: Improved MVR Checks

The first line of defense occurs in the hiring process. Thorough background checks, including MVR record checking, is a step most companies routinely do through the human resources department. Once the hiring process is completed, is there a standard and constant MVR rechecking process in place to monitor ongoing driver records? And who in your firm is responsible for acting on the results?

The 1986 Commercial Motor Vehicle Act requires drivers to self-report a conviction for any traffic violation (except parking) to their employer within 30 days of the conviction. For CDL driving positions, a further critical component is the self-regulation responsibility drivers now have to assure their medical cards are current. Who in your company is monitoring this?

The use of third-party resources for MVR monitoring, such as employer notification systems (ENS), is common practice. Guidance issued in 2015 by the Federal Motor Carrier Safety Administration (FMCSA) affirmed that ENS satisfies their requirement for annual MVR checks. However, more frequent MVR checks are recommended, and if the proposed FMCSA rules pertaining to CDL driver training requirements are enacted, MVR monitoring will become even more important. Employers should ask themselves can they depend on the integrity of their driver population to assure all violations are properly self-reported? Across all vehicle types, suspended drivers have a crash rate that is 14 times higher than other drivers.

If senior managers really want to sleep at night, a real-time, automatic notification system of driver violations and license status changes must be the foundation component of any motor vehicle safety program.

There are many outside resources available that will monitor driver MVRs on a routine basis and keep fleet/safety managers apprised of regulatory anomalies that may occur. Many of these offer services that go further by evaluating a company’s driver population, loss history, and other factors and assign a risk profile to each driver.

Element #2: Targeted Driver Training

Let’s agree that a majority of drivers are confident in their driving performance and seldom feel they need improvement. Training is always a critical element in any robust safety program, regardless of this assumption. And most drivers are wrong about this anyway. There are many high- quality driver training resources, available both online and onsite. Training demonstrates a commitment to improvement and an interest in employee well-being and represents a company’s best method of reinforcing its safety imperatives and vision.

Fleets should seek training resources relevant to their driving conditions and, more important, that are of high quality and interesting. Using the fleet’s own drivers to screen, evaluate, and select appropriate training programs will assure relevance and certainly greater acceptance by the targeted population at large. Drivers are not going to be enthusiastic about any training requirement. Having a program selected by the fleet’s drivers will add validity and substance to the company’s program.

Many firms, even some that monitor MVRs, can conduct a safety review and develop a risk assessment by reviewing loss history, driver MVRs, and employee files. From this overview they will tailor a targeted training program, addressing individual driver concerns disclosed by that assessment. For instance, if the assessment discloses drivers with speeding, space management, or aggressive driving issues, training programs can be tailored for those specific drivers addressing those concerns specifically. This tool avoids presenting “required” training to drivers who may not have these specific issues.

By using these services to their potential, those drivers who present the greatest risk to their employers are targeted for training in their specific areas of weakness. By targeting your training, your investment in these programs is directed toward exceptions rather than training your entire staff in areas in which they may be proficient already.

Element #3: Making Accountability Matter

Now that you are constantly monitoring MVRs and engaging in targeted training where it’s needed most, how will you know if your efforts are paying dividends? There are excellent programs that provide assistance after a crash. However, most fleets will agree those programs, as good as they may be, are too late. As fleet/safety managers, your goal should be to prevent crashes, assuring the fleet’s drivers are behaving properly behind the wheel. The best way to know for sure is to monitor driver behavior while they are actually driving.

Telematics and camera systems are two excellent resource tools, and should be seriously considered. These can be employed together or independently depending on your specific requirements.

Telematics, while still a relatively new technology, is now and will continue to develop into an excellent accountability tool for fleets. In addition to monitoring driver behavior, telematics can be cost justified by utilizing other elements of telemetry data to control the costly element of engine idling time. As this technology moves from 2G to 3G and more data becomes available through the J1939 and J1708 connectors, telematics will become an invaluable tool far beyond its traditional use in safety and fuel management. Two-way communication and in-depth vehicle performance data facilitating predictive maintenance are enhancements being developed, which will add even more value to this tool. Camera systems, both forward and driver facing, are safety enhancements that can augment driver accountability measures by assisting in assigning accident causation and incident reconstruction and investigation as liability is measured and assigned.

There is no substitute for a video of what actually happened. Camera systems remove uncertainty and focus accountability directly on the issue or causal nature of accidents or incidents by providing real-time, real-life evidence of what occurred. In my past experience, cameras did more to focus and document accountability for incidents not caused by drivers’ misbehavior, rather they protected against liability and directed damage and liability costs to third-party actors in ways that could not have been directed without video evidence.

According to distraction.gov, “The best way to end distracted driving is to educate all Americans about the danger it poses.” I think this is an incorrect perspective. Every driver is aware of the dangers and continues those practices anyway. If the company has a written policy pertaining to cell-phone use and/or distracted driving and your vehicles are not equipped with driver facing cameras, how can that policy be enforced?

Element #4: In-House Actions for Everyone

Two in-house steps, the establishment of an accident review committee and a driver incentive program, should be considered to help promote safe driving. Neither is costly, but each can have an indelible impact on your safety program.

An accident review committee is yet another accountability measure affording the fleet’s drivers due process in the event of a crash or incident. It also may reveal opportunities that require further study or action. There are several Internet resources on how to set up such a committee; its easily established and managed. The FAST (Fixing Americas Surface Transportation) Act may encourage the adoption of such committees as the treatment of preventable accidents may require better documentation and evidence of the adoption of preventive and punitive action as a result. According the National Safety Council, 97% of all crashes are preventable. An accident review committee must have teeth and be consistent and independent.

When the term “accountability” is used, it generally is presumed to represent the negative connotation of employee discipline or some other punitive action. A driver incentive program is inexpensive, and represents positive accountability by rewarding drivers financially or otherwise for their best performance.

Such a program can be engaged using in-house resources such as telematics or fuel usage data, or it can utilize commercially available tools now widely available. In today’s world, fleets can purchase inexpensive on-board systems that monitor and rank drivers automatically.

Peer pressure may be the most effective way to motivate employees. No one in his or her peer group wants to be at the bottom of a performance ranking list. A bulletin board, website, or newsletter posting of driver rankings based on performance will promote the self-correction of bad behaviors while providing positive recognition for your top performers. Low-ranking drivers may not appreciate the notoriety, but isn’t that the point?

I established a driver incentive program around safe and efficient driving practices. It was funded from the fuel savings generated by the program itself, making it budget neutral. As a result of that program, preventable accidents were reduced by 22%, and damage incurred from the crashes that did occur was less severe, lowering repair costs by 35%.

The Bottom Line

A key element in all these programs is for fleets to study the market thoroughly to select safety partners who share their vision for improvement. The convergence of data is a constant issue for managers at all levels today. Proficiency in the use of tools such as exception reporting, data filters, and data queries will help, but fleets should seek partners that are less enamored with the data they produce and instead more interested in the data the client needs to manage their specific risk.

A holistic approach to safety will incorporate these tools effectively. It may seem the laundry list of resources is vast, making the costs of these services out of reach. Conversely, the costs of these programs are reasonable and can be bundled together for additional savings.

To achieve further cost reductions, fleets that are not self-insured should consider enlisting their insurance carriers in these efforts. Insurance carriers are equally interested in mitigating risk and will likely reward fleets for taking a more robust safety posture by reducing premiums and providing other incentives unavailable to firms with less interest in safety.

Many in the marketplace are beginning to recognize the value of this approach. Some training firms have partnered with telematics providers as they understand the value of accountability and how telematics data can validate the value of their training. There is future benefit for training firms to take the next step by adding camera systems; hopefully a step soon to be taken by those firms proactive enough to recognize the value of real-time visual data.

The future for vehicle safety solutions is bright. As OEM safety solutions such as blind spot information systems, adaptive braking, rollover protection, and other crash avoidance technology become mainstream, the adoption of safety solutions that enhance driver proficiency and safety awareness will result in greater loss prevention and lower risk.

The driver remains the single most important element in crash prevention. As employers, we owe them and our employers the best tools available to assure success. The tools are there; we just need to use them.

Editor's note: Bob Stanton is recognized as a subject matter expert in fleet operations. He is a three-time recipient of the Larry Goill Award for fleet innovation, and speaks regularly at national conferences for fleet and government professionals.

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