What Every Trucker Gets Wrong About Safety

Hey guys, I am Hunter with Nelson Insurance. I'm going to talk about safety in the trucking space today. So I've got a little bit of background in this piece, not from the sense of I was a safety manager, I've had trucking company, but my family and everybody around me has had trucking company. I own a trucking insurance agency, so I advise on safety, on risk, on claims, on everything like that. And, uh, we've educated ourselves very heavily on this. Team members on our team, on our agency, have got safety courses completed, certifications, everything on those lines. So it is a big part of what we do. Do daily still. I'm going to get into here the cost of safety. This is a book written by Sam Ward. He's a safety director at 10-4 Truck Insurance, and there's not a whole lot better than this. So I'm going to get into it. Let's, uh, let's start talking about safety here. All right, so the first piece I'm going to touch on here before I get into the book is just looking at safety as the total cost of risk versus just your premium on your, on your insurance deck page. On the cost of, you know, the third-party compliance, the safety director, whatever the case is. Safety and all that is not something that's going to directly have as much impact or something you think is going to be a huge deal because it doesn't have— it's not going to show up on the P&L directly right away. You know, all that matters— well, I shouldn't say all that matters, but at the end of the day, a business is there to make money, right? And so sometimes it's tough to add extra expenses And I think this is going to hurt my net, my profit, my EBITDA, whatever the heck you are tracking, when I have to add these extra expenses, and it's not going to have a direct return right away in revenue or profit or anything along those lines. But in the grand scheme of things, if safety, if risk management, none of that stuff is taken seriously, there's not going to be a business to profit from if something does go wrong. Yeah, now you're gonna see it on your P&L because the indirect costs, the the risk that you guys are now absorbing, the missed opportunity costs, anything on those lines is a huge huge impact on that stuff. As insurance agency owner, if we make a mistake, my E&O insurance goes through the roof. I lose clients. Problems are had. It has impact on my team if somebody gets hurt. That has impacted my team, uh, clients are lost. So it will show up on my P&L, even though it's not the thing I'm thinking about every morning. It's how can I bring in more revenue? How can I keep the revenue? What can I do to make sure expenses are looking good and not getting out of hand? That's what every business owner is thinking about. But at the end of the day, the long-term grand scheme of things, safety, risk management, all that stuff's like big key piece. So looking at total cost of risk, If I do not implement this stuff, if I do not do this, what does that bring for indirect costs? What does that do to my insurance premium? What does that do to this culture of my company? Because all that stuff does have a massive impact on it. And so, uh, one thing I do want to make people aware of is that this stuff is worth investing in. When you guys have a claim, let's say you guys are a decent-sized fleet and you guys have a million dollars in claims, Typically the indirect cost is 2 to 20x, and this is a statistic, not something I'm guessing on, uh, of the direct cost. So it's probably going to cost you guys $2 to $20 million in indirect costs, whether that's culture, people not want to work as hard, less productivity, keep people being out, opportunity cost. I've seen trucking companies lose relationships with their brokers because they smoked a retaining wall because they're Cargo got destroyed. Whatever the case is, it does not help anything out. And so how do you guys now correct this? Is it do I go buy a course for my drivers and stick them in front of it and hope for the best? Do I start hanging up stuff on the wall and hope for the best? Really, what it all comes down to is it's all leadership. I believe as a business owner, everything that happens in the business is the business owner's fault. There's stuff where I've made bad hires and I put them in charge of things, and it was a fire. And at the end of the day, I can sit and blame that person, which yeah, they do have an impact on what goes there, but I'm the one who decided to put them in that position. I'm the one who gave them the ropes and the training and everything on those lines. At the end of the day, it is all my fault. So a safety program is not measurable. It's hung on the wall. It's what happens on the worst day of the year. Like I said, when you guys have those indirect costs, it's not going to affect your P&L right away. It's not going to hit your numbers right away, but at some point you guys are going to see it. It's going to have an impact, and it's going to be more, uh, to resolve than just a safety meeting or anything along these lines and prepping everybody. It all comes down to leadership. So when safety is treated as an asset rather than a necessary expense, the impact extends far beyond the compliance metrics. You start seeing claim severity decrease, which is going to lower your insurance premium. Insurance premium decreases. Customer relationships will actually strengthen operations, be more reliable. Drivers stay longer, which is a huge, huge expense because of the consistency in leadership that follows. Even supervisors will gain confidence, have a clear workflow or work frame there. So leaders often underestimate how much confusion their team lives in every day. The reason is not because people are unskilled or careless. But because no one has taken the time to turn assumptions into standards. And so that's another big key piece too. You guys got to have standards with everything. If you are going to have a safety meeting, hey guys, here's what's going to be happening going forward. It needs to become a standard. I see this in my own insurance agency and things in my own business I run. I have these meetings, hey guys, here's what needs to be improved on. We go do it, the hour is up, nothing happens on it because Really, at the end of the day, I wasn't making as much of a priority out of it as I should have. When there is goals and standards and things that have to be met, what it all comes down to is accountability to training. And you guys can train and sit by them and burn all the time you want. That's only going to do an extent of things. I think a lot of it comes down to here are standards and the accountability. It's one big thing I've seen, you know, I've even made mistakes on, is the fear-based enforcement versus progressive accountability. So what that looks like is our day is so busy, like our days are, and obviously truckers are probably even more busy. You guys have got a million fires put out, you got a million things going on, you're always on the phone. And, uh, I mean, from what I've seen In what I know, there's a— you just cannot get enough time of the day to sit down with everybody and do what you'd like. But the thing about it is, is you got to delegate it. You got to figure out a way. It's a quick conversation. It's the progressive accountability. You'd nip it in the bud right when something happens. So if you guys go and have a violation for vehicle maintenance, you'd think, hey, you're supposed to be doing a pre-trip inspection. What the heck is going on? You rip into them, whatever the case is, or nothing happens at all. It's not that big of a deal. It's a one— it's one violation. I don't know about it. It's not being tracked. I don't have the time to deal with it. And then once you guys know— you don't know it's too bad until it's too late and it's so bad, then now you guys are in recovery mode. And so you guys have to be tracking data. You have to be tracking data, and you have to get the accountability taken care of right away. Hey, do you understand how to do this pre-trip inspection? Most people do, right? But you never know. Do you understand how to do this pre-trip inspection? Here's what was going on. Why did this happen? Okay, what are we going to do to make sure this never happens again? If it hap— you guys can give a warning, you can give a write-up, you can do whatever. It needs to be documented and needs to be taken care of right away. Versus I'm too busy, I don't know the data, 3, 4, 5 violations pop up. My ISS is just up through the roof. I can't find insurance. I can't get some loads. Now I'm starting to deal with these issues and it's on there for 2 years. It's too late. And so now I'm going to use fear-based enforcement. Anybody who screws up again is fired. You rip into them, you belittle them. That's how the blue-collar world is. When I poured concrete, you made a mistake, you just got belittled. You get cussed out in your face. Whatever the case was, when I showed up on day 1, there was no training. Hey, go do this and this and this. Best of luck. You should be able to figure it out. And a little bit, you think that's how the world operates. That's how people should be able to figure it out. That's exactly what I thought. But the thing I've realized is these safety managers and business owners have got years of experience. We're in that position because we're able to figure it out, because we have the problem-solving skills and we have some skin in the game. But it's a lot different for the drivers, for the, for the employees, for everybody else. And so sometimes that you have to go through and just make sure they have the training, make sure they have a full understanding. And if they do, then you write them up and you say, next time, here's the, here's the problem. You give a pay decrease, you threaten their job after a certain point, you take away a bonus, you do whatever needs to be done. If it gets to be a problem, if it's just blatant negligence, I make sure my employees have skin in the game. My team members have skin in the game. And I do not want to use fear-based enforcement. Nobody likes their job. A huge key piece is driver retention. And so those are some things that really it comes down to. I think that's one of the biggest things I've gotten out of this book so far is just how leadership does it and just focusing on how leadership is being handled. A strong, a strong driver becomes a trainer because they're good with people. A sole mechanic becomes a shop foreman. Because they know the equipment better than the rest. A dispatcher becomes— I'm sorry, gets promoted to operation supervisor because they can move freight when things are chaotic. However, none of these skills automatically translate to coaching or managing conflict, yet the company expects the new leaders to make sound judgment calls and enforce policies to make— or who were their equals just yesterday. So you got to remember, that's another big key piece. The people who are in charge and have the downstream effect of this stuff is going to be a huge key piece on this. And so what you guys do is there's 4 habits that impact frontline leaders. A first habit is modeling the behavior of what they expect. You do it, people follow. There's no better example than leading, or there's no better method of teaching than leading by example. The second habit is giving clear and timely feedback. The accountability piece, it's taken care of right away. It's not Oh, it's not that big of a deal. I don't have time for it. The third habit is using data, not emotions, to drive conversations. You remove the person from the problem. Hey, here's your ELD data, and you guys should be using some tech. I mean, but tech is not gonna be always the answer, but having the technology available. Here's your ELD data. Here's everybody else's. I am not blaming, or I'm not chewing out you, but this is the problem. Based off of the data. So I'm removing you from it, but this needs to be improved. Here's how we're gonna do it. If it doesn't, we're gonna have another conversation, and you might not be working here if it's bad enough, right? And the fourth follow— first, fourth habit, excuse me, is actually following through on it. And so I want to give this example here real quick too. Uh, Sam talks about, I worked with a flatbed carrier that Cut preventable crashes nearly in half. They did it by new technology or overhaul their safety program. And so other thing too is just saying I'm going to do new employee contract or just not even having an employee handbook and guide and all that stuff in effect in the first place. That's a problem. But redoing it and just handing it out is not going to be a fix to it either. Dispatchers simply stop celebrating drivers who got the job done no matter what. They change their language and drivers change their behavior. And so the culture, the leadership, the how things are done is what gets this stuff across the finish line. You got to start with the basics. Make sure you have some of the technology. Make sure you got the procedures, the standard operating procedures, the handbooks, the whatever. And then it becomes a standard. Make sure it's implemented. Look at my current stuff. You got to have the data. If you guys have a good insurance agent, they have cab. You guys can look at that. We have we have alerts set up for our clients so we can see when a new violation pops up. Good insurance agents and companies are going to have the resources there for you guys. So if you guys have any questions on this stuff, please do not hesitate to reach out. I love helping trucking companies, and safety is a huge key piece. I see insurance rates through the roof on it because of it, and I see a lot of companies going out of business. Obviously, expenses are through the roof. It's very tough to invest more in. safety. But having good leadership and having follow-through and accountability is free. So that is a huge key piece and something I recommend. Please like, subscribe so I keep making content for the— about this and helping you guys out. I appreciate you watching.