No one is immune to risk; however, the level of risk differs, especially across professions in all industries.
Risks are inherently high in the transportation industry, specifically trucking. Millions of trucks crisscross the U.S. daily carrying food, produce, livestock, construction materials, equipment, vehicles and hazardous materials, among other things.
According to the American Trucking Association, 36.9 million trucks were registered and used for business purposes (excluding government and farm) in 2020. In that same year, registered trucks traveled 302.14 billion miles.
The most recent data from the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration revealed that between 2019-2020:
- The number of large trucks involved in fatal crashes decreased 4%, from 5,033 to 4,842, and the large truck involvement rate (large trucks involved in fatal crashes per 100 million miles traveled by large trucks) decreased 4%, from 1.68 to 1.60.
- The number of large trucks involved in injury crashes decreased by 10%, from 119,000 to 107,000.
- The number of large trucks involved in property-damage-only crashes decreased 21%, from 414,000 to 327,000.
Those are some of the risks TriCoast Advisors are working with trucking companies to avoid. The Grand Rapids firm specializes in risk, insurance and employee benefits by putting in place safety measures to mitigate those risks.
“Trucking companies are challenged with operating safely, attracting and retaining drivers, all while maximizing profitability,” said Nathan Steffen, president of TriCoast Advisors. “Our advisers help align internal systems and expectations where all three of these goals are in sync. It is a holistic and transparent approach that builds trust with the drivers; fosters safe and efficient operations; lowers employee turnover; lowers the cost of risk and insurance through a reduction in accidents; and positions the company to defend itself in the event of a major accident.”
One of the companies the firm works with is Zeeland-based INONTIME, a trucking and warehousing company, which also has warehouses and trucking operations in Grand Rapids; Elyria, Ohio; and Greer, South Carolina.
INONTIME, an employee-owned company, transports and stores a variety of items including automotive parts, furniture assembly pieces, packaging, wiring and household goods.
“Being on the roads every day and loading/unloading as many trucks as we do comes with inherent risk,” said Jon Lanning, owner of INONTIME. “We travel enough miles in trucks to go around the world twice a day. It can be especially challenging during busy travel times, traffic, or when the weather is bad.”
One of the ways TriCoast Advisors helps INONTIME to minimize the risks that comes with truck driving is by helping them to customize scorecards that align with the operations of the company.
Steffen said scorecards that are available through telematics or other providers are usually “off the shelf” and cannot be integrated with other meaningful metrics, so they partnered with INONTIME to build a scorecard that was unique to them.
Steffen said the scorecard integrates efficiency (fuel efficiency, idle time, etc.) with safety (speeding, harsh braking, following distance, etc.) and operational (property damage, customer satisfaction, etc.) metrics.
“Using a customized algorithm, it boils the data down to a single score for each driver,” he said. “A scorecard is generated and provided to every driver on a monthly basis and they can see how they stack up against the other drivers.”
Steffen said scorecards are beneficial to the drivers, companies and the community at large.
“The driver benefits because they are crystal clear on the expectations of the company and are rewarded for their behaviors,” he said. “Good drivers take pride in their profession, and they like it when the leaders know how well they are performing. The company benefits by creating tangible alignment across leaders, operations, safety departments and the drivers. This fosters a culture of performance and safety that benefits the company financially and protects the community at large. There are also tremendous gains in efficiency where manual tasks can be automated.”
Lanning said their safety events have declined by more than 50% over the past six months.
“We are working to make sure we keep enough following distance from vehicles in front of us, watching our speed, anticipating what could happen, reducing our idle time and driving efficiently,” he said.
In addition to using TriCoast Advisors’ customized scorecards for its drivers, Lanning said the company also has safety boards, information to train the team and they are a part of a captive insurance program, which, Steffen said, insulates companies from the swings in the insurance marketplace and allows them to get up to 60% of their premiums returned when they perform well.
While individual trucking companies are focused on minimizing risks of truck-involved fatalities, injuries and property damages — and maintaining a good safety record — the Department of Transportation also is doing the same.
In 2016, Steffen said the Department of Transportation required trucking companies to convert from paper logging to electronic logging to comply with “hours of service” regulations, which govern the number of hours a truck driver can drive and work. This required companies to install telematics devices that began capturing information on driving behaviors.
“This was a game-changer as it was soon learned that drivers are either building good evidence or poor evidence on a daily basis that can be used for or against transportation companies in the event of a major accident,” he said. “Plaintiffs’ attorneys began using this data to win ‘nuclear verdicts,’ securing settlements in the tens of millions of dollars. There is now a much higher level of scrutiny on safety performance by insurance carriers, clients and the public.”
This story can be found in the Jan. 23 issue of the Grand Rapids Business Journal. To get more stories like this delivered to your mailbox, subscribe here.