Opinion: The Full Cost of Accidents
By Dave Melton
I>Director of Transportation Services
iberty Mutual
How many more miles does your company have to drive each year just to cover the costs of workplace and roadway accidents? I bet it’s a considerable distance, given that workplace injuries throughout American industry produce $40 billion in direct costs — payments to injured workers and their medical care providers — each year, according to the 2002 Liberty Mutual Workplace Safety Index.And this is just the tip of the iceberg.
In addition to direct costs, workplace injuries generate uninsured, indirect costs of lost productivity and overtime. These are much larger than the direct costs. In fact, surveyed executives estimate that between $2 and $5 of indirect costs result from each dollar of direct costs. So that $40 billion translates into an additional $80 billion to $200 billion of indirect costs. Think about it: For every dollar of direct costs, another $2 to $5 is coming right off the bottom line.
Clearly, improving safety can have a significant impact. We developed a chart showing how much additional revenue a company needs to generate to cover the financial impact of vehicle crashes and workplace injuries, based on a range of profit margins. For example, a trucker with $100,000 of these costs would have to earn an extra $2 million in revenue just to cover this expense, assuming a 95% operating ratio.
Safety pays. But safety must start at the top and flow through all levels of the company. To create an ongoing “culture of safety” in your company, begin with the following.
UL>
LI>Action Plans: Set realistic goals for reducing each accident and crash type. Identify how you will get from current rates to your target levels. Explore new ways to work, and new technologies that might lower accident rates.
LI>Communication: All employees must understand the company’s commitment to workplace and roadway safety, the improvement plans and their role. Progress should be regularly highlighted throughout the company.
o where should you focus your energies and resources? Here are some of the best safety practices that were reported in the annual Liberty Mutual Trucker’s Survey.
LI>Set annual crash goals and include them in operational measures.
LI>Use in-vehicle training for company drivers.
LI>Enforce a “following distance” policy that requires at least a four-second separation between vehicles and a quarter-mile “no convoying” policy.
LI>Maintain a written safety program and audit compliance with all procedures.
LI>Use electronic control module and global positioning satellite data to monitor and reward good driver performance and to verify log accuracy.
LI>Provide skid pan training for all drivers.
LI>Set engine speed limiters to no higher than 68 mph.
LI>Place an accident kit and a camera in each truck and train drivers on their use.
LI>Install mirror check stations at terminals and train drivers on their proper use.
LI>Provide driver-fatigue training to all drivers and dispatchers.
LI>Participate in automatic motor vehicle record violation notification programs available from many states.
LI>Conduct background checks and drug tests on all applicants.
LI>Complete a road test with all applicants as part of the hiring process.
LI>Include driving record standards as part of each driver’s job description.
LI>Establish and enforce a seat belt policy for all drivers and passengers.
ur safety index determined that the top three causes of accidents throughout the American workplace — and the leading causes in trucking — are overexertion, falls on the same level and falls to a lower level. Here are tips on reducing those accidents.
LI>Overexertion (excessive lifting, pushing, or pulling): Make sure freight is packaged for easy loading. Use appropriate material handling tools. Allow sufficient time for loading. Establish worker behavior expectations and monitor performance.
LI>Falls on Same Level: Make sure trailers and loading docks are well lighted. Loading dock floors should be clean and free of fall hazards.
LI>Falls to Lower Level: Equip all truck cabs with grab bars. Train drivers on the proper “three points of contact” method for entering and exiting cabs. Set and enforce standards for proper footwear. Equip all loading docks with railings.
hile reaching your goal for workplace and roadway safety may be challenging, it is certainly rewarding. Top-performing trucking companies will continue to use safety to gain a competitive advantage by protecting their employees and financial performance.
Liberty Mutual, Boston, is a major provider of workers’ compensation and vehicle coverages to the trucking industry.
This story appeared in the June 3 print edition of Transport Topics. Subscribe today.
