005: The Four Pillars of Fleet Success - Risk Management

Welcome to the Fleet Success Show, a podcast dedicated to talking about the fundamentals, standards, and best practices that empower today's fleets to achieve fleet success. Let's get into the show.

Welcome to episode number 5 of the Fleet Success Show. Joined today by my co-host, Jeff Jenkins. Welcome.

Thank you. It's good to be here.

Well, excuse Steve today. He's out on vacation. So, you know, hopefully having a good time with his family. But today we're talking about the fourth pillar of fleet success, risk management.

Right.

And for us, we define risk management as it's the proactive process of identifying, assessing, and controlling threats to the organization and its stakeholders. And we really liked kind of the wording around this. Proactive was a big part of it. Yep. Right. We knew there was more to it than just, you know, safety. And I think that's why we made it a broader category than just being safe, you know, but doing the identifying, assessing, figuring out like how big of an impact is it and then controlling it, right? Making action, deciding if I'm going to do anything or not to address that threat. Right. Is how severe is that threat? What can I do? Can I do anything?

This is a huge topic because you don't know what you don't know, first of all. You can make these changes so you can identify something, you can assess it, you can try and control it. You don't know what that's going to prevent, which is a huge thing. You know, when I was CEO, that's what we talk about. We talk about, okay, we're going to do something like cameras inside the trucks, for example. We're going to put cameras inside our trucks and here's this huge expense we're going to go through. Drivers are not going to like it because they think it's an invasion of privacy, whatever the reasons may end up being. But what are we going to prevent and where are we going to save by doing that and putting that in there? And you just don't know. But what we decided is what we don't know is probably better off than what we do know, which is we want to change driver behavior and we want to eliminate risks by being able to identify whether we're at fault or not when something happens. And so, you know, we added those in there and it ended up being to where we actually reduced our safety costs by about 20% just by putting cameras in those trucks. But if we hadn't done it, we don't know what it would have cost us or wouldn't have cost us. So you have to weigh that out when you talk about risk management because you don't know what could happen. And really, that's what you're working on trying to eliminate.

Right. And, and you know, something could happen and you know, it's only a matter of time, right? Is just sometimes you can't quantify the unquantifiable, right? Like it's a, it's a could or a might or a, you know, like an alternate reality, right? You just don't know, but the possibility exists, right? And that's the whole idea of risk is it's a gamble.

Yes.

You know, you could choose not to do something, but it's a gamble. You're, you know, and that's the whole definition of risk, right? And I like the idea, you know, you have cameras in the trucks. I remember, you know, watching some of the You know, we deal with driver eye cameras here. And so watching some of the training videos they have on that and you see, you know, some of the drivers as they're going through and, you know, and I know we as drivers are sometimes guilty of this even outside of company vehicles, but hands-free driving, right? Distracted driving. You know, we got kids screaming in the back, the cell phone's going off, we're looking at our cell phone and seeing, you know, the inside cab view. Evasion of privacy or not, but what a coaching tool that turns into about, hey, you know, it beeps at you and says, hey, eyes on the road. You know, it's that backseat driver that's just making you a better, safer driver. You know, as a— Joe, what happens, you know, you have your CDL, you get into an accident, what happens?

Well, one, you have to do a drug test right away.

Okay.

Right, so that's the first thing, it's required by law, you have to do a drug test, right? You have to, you know, get a hold of whoever's in charge, your safety person or whatever else, but that driver is also going to be put on leave. For a period of time. And then depending on what the outcome of, I guess, an investigation or whatever, the driver that goes back to work or they're terminated based on what actions were taken. Yeah.

Any chance, like, anything happened to their license at all? They get marks or anything on it?

Well, I mean, yeah, it's just like a regular license. So you get into an accident, you can still end up losing it. Yeah.

Just like your normal driver's license.

Absolutely. And more than likely what ends up happening though is you're just unhireable to companies. So we would always go and we'd look at someone's, you know, their motor vehicle report and you would see, hey, what accidents do they have? What's preventable? What's not preventable? And then you have to weigh that driver's history as to whether it's a risk to your company or not and you're going to hire them. That's the detriment, I think, when it comes to accidents or speeding tickets or whatever it may be to a driver. It's not necessarily what's going to happen right now because you're going to get fired or you're not going to get fired, but it's what happens down the road. Most trucking companies are going to weigh very heavily what you're doing on the road and what you're cited for versus anything else.

Right. And so as a driver, you know, like, I know we don't like the cameras in the cabs, but man, I'd almost be welcoming that. Hey, help me be a safer driver because it's going to help my career, right? It's going to help me, you know, maintain a really good, clean driving record. I'm not going to have to worry about citations. I'm not going to have accidents. I'm not going to have things like that. It might still happen. But boy, wouldn't that be awesome if I get in an accident? And the cameras, you know, exonerate me, right? Or they say, hey, you're totally vindicated. You had your eyes on the road. You did everything you could have. That driver pulled right out in front of you. You had no chance of stopping your truck, right? Like, that seems like a pretty good exchange for me. It is.

And if you have the right attitude and that's the perspective you take, it's great. It's the ones who are doing stuff they shouldn't be doing. They're the ones, right? So when you've got a guy that says, oh, it's an invasion of privacy and I don't want this happening to me or whatever else, It's usually because they're doing what they shouldn't be doing. They're texting. They're making phone calls. They're peeing in their bottles. They're looking back behind the cab, petting the dog, doing whatever it is they're doing in their truck that they shouldn't be doing, that if you have that camera facing you, all of a sudden it's like, OK, I'm a shitty driver.

Maybe I shouldn't be driving trucks. I enjoy this, but I don't have the right attitude for this job. I think what's interesting, you know, we talk about risk in trucking and this applies to government fleets and corporate fleets and things like that. The idea is we're sitting here proactively trying to identify— this is an easy one to pick out because it's a huge piece of the trucking puzzle, right? But I think for our listeners, you know, the big thing is to sit back and imagine, you know, what if, right? When you're trying to identify risk, You can think about all the obvious ones, right? What if our drivers get into an accident? You know, what if somebody has an accident while they're in the work bay, right? You know, we have backing accidents all the time in the parking lot. You can already look and see, you know, where are you having costs that are associated with, you know, accidents that are associated with injury, that are associated with, you know, damaging events. To your fleet, to your operation, to your organization. And then just imagine, okay, well, what if this happens? What if this happens? And play it out, right? Don't do this for everything because you'll spend your entire day just playing out imaginary scenarios and you won't actually get anywhere. But imagine the most impactful or the most common and play it all the way through. What's the worst-case scenario that happens here? What's the end result? What's the impact to the business if we have a fatality while we're out driving? What's the impact to the business if we just have a serious wreck versus a catastrophic wreck? What's the impact to the business if we have 20 back-in accidents in the parking lot? Are there little things we can do to mitigate some of that stuff? And so you kind of play those scenarios through and identify What if we try this? What if we try that? Kind of like you were saying with the cameras.

Yeah, this is why, you know, the analytics and the metrics are so important when it comes to mitigating risk is you've got to identify what your big problem areas are and where your issues are. If you don't have that data collected, you're never going to be able to know what it is and then you're not going to be able to take the steps to then control or try and prevent whatever it is that you've got going on. I went to work for a trucking company that they— their biggest expense on the safety side was rear-end accidents. And they spent over $20 million in a single year on rear-end accidents, whether it was for the repairs, the insurance, getting sued, payoffs, whatever it ends up being. That cost was over $20 million. So realizing, hey, there's a problem with our drivers rear-ending people. What are we going to do to prevent that? Well, the decision was made. Let's go get some collision avoidance software. Put it in our trucks so that when there may be a risk coming up to where we get too close to a vehicle or we're not paying attention, it's going to automatically brake for you, scare you to death as a driver the first time that happens, but it's going to brake for you and help eliminate that risk. Well, that company went from over $20 million in one year to less than $1 million in rear-end collision accidents the next year.

Just by adding this one—

just by adding that one. But now it's expensive. I mean, you're talking like $8,000 a truck.

Right.

So it's not cheap, but you add that and then based on those numbers, they're well ahead because of what they prevented going forward. And they had the metrics, they knew what the problem was, right? We identified it. Then let's assess what it is. What can be our solutions? The solution is, hey, let's try this avoidance collision software in our trucks and then went ahead and implemented it and it turned out good.

Yeah. Well, and I love that this is a case where It wasn't we didn't know, we didn't know. We knew, hey, there's $20 million that we're putting aside for this, and there's a solution that we have to help prevent this, right? And it's, you know, you do the cost analysis, and you're like, yep, that's going to save us some money, right? And even if it didn't, what if, you know, like you play this out again, what's that worst-case scenario? A rear-end collision ends up costing somebody their life, and now all of a sudden that lawsuit jeopardizes the company, right? And so at what point is it worth it? Well, it sounds like, you know, it was easy to justify at $20 million. It's probably even easier if you go higher and higher and then you have the immeasurable loss of life. But those are strategies to mitigate risk. I love the example I've seen with parking lots, right? The number one place for a fleet to have an accident is in their own parking lot, and it's almost always with another fleet vehicle. Because we don't check our, you know, as we're backing out, we hit something. It happens all the time, right? It's not the catastrophic accident that's the most common. It's always in the parking lot. So what do you do? You create a backend strategy. You say, hey guys, we're going to create a policy and it's going to be that everybody backs into their parking spot and we will avoid a ton of collisions that way. It doesn't get rid of them all, but it gets rid of a lot of them. Yeah, it's super simple.

It is simple. It's funny you're talking about that and I'm reflecting back on my early days when I was a much better person apparently, but I was a missionary for my church. The policy is for a Mormon missionary is if you're in a car, one person has to stand behind the car and they have to wave someone back when they're backing out of a parking spot because they had so many issues with accidents. Right? So when you see those crazy— when you see those crazy teenagers, one of them out there in a suit and tie and he's waving someone back out of a parking lot and you think, man, that's stupid. Well, it's because they were mitigating a risk that they had prior to that.

Yeah, maybe all they needed to do was just say, "Hey, you just back into all your parking spots," right?

They probably could have done, but they probably would have still hit somebody. You know, it's teenagers.

They're teenagers. I think I've seen pictures of cars flying through the air over railroad tracks, you know, so I mean, it's— how do we mitigate some of those risks?

We had fun in those cars, but here's a little tip for everybody: do not buy a used car that used to be for missionaries, right?

So one of the things I like to think about, right, and this is an idea that comes from Jim Collins, right? And this is actually one of my favorite things is we're applying lessons that we learned in business and bringing it to the world of fleet, right? It's kind of the whole point of this podcast. And Jim Collins, great business author, great leadership author, wrote Good to Great, which is probably one of his most well-known books. But he has a whole series in this line, right? Good to Great has 2 or 3 sequels and a prequel. And they're all fantastic books, but one of them is called Great by Choice, right? And it talks about all the things that great companies have done, and it always compares them. Collins has a method, right? If you've never read his books, his method is always to compare what he calls matched pairs, right? And these matched pairs, one company versus another company who were born about the same time or were competing in similar industries, who were about the same size and they grew to become— one of them grew to become a 10x company, you know, 10 times the size of the other company, right? And they analyze what are the decisions they made, what strategies did they take, what were the key differentiators that made, you know, Microsoft so successful in the '90s versus Apple, or made Southwest Airlines so successful compared to Pacific Southwest Airlines. People like Pacific Southwest, right? You got to be old to remember that one, but The idea is, how do you compare some of these companies to one another and what decisions do they make? One of the things that he brought out as he's comparing these companies in Great by Choice was this idea of productive paranoia. This idea that, you know what, I can't control for everything, but I'm gonna at least act as if something bad's always gonna happen. I don't know how good that is for your health, but the idea is that these leaders are constantly thinking about What's around the corner? What do I need to prepare for? What's the worst-case scenario? Right? And they noticed things like, hey, on average, 10x companies had 3 to 10 times more cash reserves than their counterparts, you know, than their 1x counterparts. And it wasn't that the 1x companies were bad, they just weren't great, right? You know, the difference between owning Apple stock in the '90s versus Microsoft stock, you know, Apple became what it is today not because of what happened in the '90s. They almost went bankrupt, right? But you look at their cash reserves and they had, they socked away cash. They squirreled away. He gives this example. I don't know how many people are familiar with the story of the Everest climbers. I don't remember when it was, but there's a movie that came out about this a little while ago. But it talked about this expedition. They had two expeditions that went up on Everest and they lost 8 people. There was a freak storm that came out of nowhere. Weather didn't turn good. There was a huge backlog of climbers that day, so it was taking everybody a long time to summit the mountain. And there was a huge disaster on the mountain where we lost 8 climbers, right? And the story, if you haven't had a chance to watch it, go watch the movie. It's a great movie, tragic movie, but a great movie. It has like Josh Brolin and a couple other name actors in it. What a lot of people don't know is that there was an IMAX crew that was going to summit the mountain earlier that day. They were going to go and go summit the mountain. They had all this equipment and huge amounts of— they were taking IMAX cameras to the top of the world. It's a hard enough climb to climb Everest on your own, but now we're going to lug around 50 to 100 pounds of equipment up the mountain. So the leader of that expedition had been planning meticulously for months what could go wrong when we're above the death line. What could go wrong when we are basically on death's edge? We're way above and we're out of reach of being able to resupply or anything. So what do we need to do to mitigate that risk? Well, the number one risk up there is you run out of oxygen. So this expedition leader, the first thing he did is he said, "Well, you know what? We don't know how much oxygen we're going to need. We don't know what we don't know. But we do know we're going to need a lot more than what we have." We normally would carry enough up for one summit. We're going to go ahead and make trips up the mountain just for the sake of putting oxygen canisters up on the mountain on the trail. So they actually end up climbing Everest like several times without summiting just to store oxygen containers along the way. So they could resupply as they're going up the mountain because they couldn't carry it all with them, right? And so they're socking away oxygen containers, you know, and then the morning of, they're supposed to summit the mountain, they look down and they see like 50 to 100 people coming up the mountain, right? And the expedition leader immediately knows this is gonna be a nightmare, right? Like, they know that it's one person at a time on the Hillary Step. It's one person at a time when you get to some of those ropes, right? And like, there's a bottleneck up there before you hit the summit. And there's only a few hours, like there's only a good window, and the climbing season's only so long, right? So when people get a window, they all go and they all rush the mountain, right? Well, this expedition leader sees this happening and immediately is like, you know what, this is like the one time we could make this happen. He's got to make a go/no-go decision. He walks through productive paranoia. What's the worst-case scenario, right? What's the death line risk? And the death line for Everest is if I go up, you know, from— I'm at Base Camp 3, I go up to the next base camp, like, we're above the death line. We can't stay there, right? We only have a certain window to stay up there. Seeing that huge backlog, knowing what they were going to be facing, he says the worst-case scenario is that I lose my team. Right? It's not worth the risk to get the shot. Right? It's not worth the risk to get the camera shot of having an IMAX camera on top of Everest. And so he decides to pull the plug. Right? They've spent millions of dollars on this expedition. Millions. And he aborts. That's a big-time decision. But in his mind, he says, "You know what? The millions of dollars, it's not worth the risk of losing life." Right? The shot's not worth it. Ironically enough, you know, the expeditions that did go up ended up getting stuck. There was a huge freak storm that came. They had made decisions ahead of time. They always make decisions ahead of time about, hey, our turnaround window is here, right? If we haven't summited by 4 PM, we don't summit. We go back down the mountain, right? Well, a couple of them decided that, hey, we're so close, we're right here, Let's go ahead and go past our window, right? And this is one of the famous parts about why two of them lost their lives that day. It's because they went up late. You know, poor Doug Hansen, he'd been waiting for this moment for the rest of his life and he couldn't do it again. This is it. His last chance. And so his guide, you know, took pity on him, took him up the mountain, and it ended up costing him his life because he did it. There was people that went up the mountain to try to rescue them. Ended up costing their lives, right? The storm came out of nowhere. You know, it wasn't like they knew it was gonna happen, but they do know on Everest that storms come out of nowhere, right? So it's not like they didn't know that a storm could come out of nowhere. It's just we didn't know it was gonna happen today. And the idea is that you analyze that risk and you figure out what is the worst thing that could happen and how likely is it to happen, right? And when you see a huge bottleneck of people The IMAX expedition leader says, "Nope. This is the worst thing that can happen is we get stuck and we get killed because there's storms that could come out of nowhere this time of year." The other leaders say, "Hey, this is our only shot. We're going to go for it." And they end up losing everything. How do you manage the death line risk? How do you manage the risk that could kill the company? And those are the ones you have to take most seriously. I mean, you have to do whatever you can to figure out how to keep a company from going under, how to keep your city from going bankrupt, you know, how do you keep those death line risks out of the picture?

And this industry is just so unique that way. There's not a lot of industries where you have that death line, right, when it comes to actual loss of life. When you talk about that now, obviously there's loss of company and money and everything else, but it's very, very rare that you've got industries that you actually will talk about loss of life and how do you mitigate that? Because that's the most important thing. And it's— I think it's a thing a lot of people struggle with.

Yeah. You know, and a lot of people are— they might minimize it a little bit. Well, nobody's going to die, right?

Yep.

You know, some fleet managers, you might look at that and say, well, you know, we're working on trucks, we want to be somewhat safe, but we've never had, you know, a serious accident in our shop. And they might dismiss it. They might say, oh, it'll never happen to us, right? I remember there was a county around here, you know, that ended up having a huge tire accident, right? They were mounting a tire and it flew off the, uh, you know, the tire mounting machine went like this thing went 2 or 3, you know, probably 2 or 3 stories, just 20, 30 feet in the air, ricocheted off of 2 things, hit the garage door, embedded itself into the ground, um, knocked the guy's teeth out. It was serious, like they had some serious damage done to both technicians and to the shop. And you could have said before that, man, I would never thought that could have happened, right? But if you've been around tire machines, you know how crazy dangerous those things can be, especially if you miss mount a tire, you know, or— and that's sometimes you got those covers you put on, you keep them from blowing off, right? You know, having a tire explosion. There's things that you know could happen You got to figure out how serious are they when they do happen.

Have you ever toured a paper plant?

Uh, yeah.

So what I find just amazing about a paper plant, one, is those machines. First of all, I mean, that's like death waiting to happen all around.

You just fall into one and—

yeah, you got paper machines and you've got the logs that are getting lifted up on cranes and then they're getting chipped and then it's getting, you know, made into pulp. And anyway, there's a lot of machinery, but when you go to a paper plant, they've got very defined areas that you can walk in. They've got yellow lines and you have to stay between the yellow lines. You can't wear a wedding ring that's metallic. If you're gonna wear a wedding ring, it has to be silicone. And I think that's because of electric shock. Or also, if your hand gets caught, your ring will get caught and it'll stay on, whereas silicone it won't, right? So it could pull you into the machine if it gets cut. So they just have all these rules.

No neckties.

Yeah, no neckties, loose clothing, right? You got to have everything tucked in. It's got to be just because of Obviously things have happened in the past where loose clothing has been tied in the machine and you're getting sucked in, or the ring on your finger, someone gets too close, or whatever it is. They focus very heavily on that risk management and saying, hey, we're going to tell you everything that you can and can't do, and don't deviate, because the moment you deviate, it's a loss of life.

Right. The other type of risk that he talks about, right, we have death line risk, you know, where there's literal loss of life. We have death line risk where it's, you know, the company loses its life, right, where the company ceases to exist and ceases operations. Another type of risk is asymmetrical, right, where the, the amount of risk that you have to take on to get the reward way outweighs the amount of reward, right? We hear things like high risk, high reward. Asymmetrical risk is high risk, low reward, right, where the payoff just isn't worth anything you're doing, right? I thought it was actually really funny, we were about to talk about this, right, Monica Lewinsky a couple days ago. There's a post that goes out on Twitter and it says, "Hey, what's the most high-risk, low-reward thing you've ever done?" Right? And she just posts a couple pair of eyeballs. Right?

Hilarious.

Hilarious. She won Twitter for the day.

Yeah, hilarious.

It was just, it was, you know, it was perfect timing. I'm like, that's exactly it. Right? That's asymmetrical risk. You know, like there's no benefit that comes out of that. And yet, you know, like that's all you're ever going to be known for now, right? Like the amount of risk with that decision, you know, and she recognizes that and everything is— and she can have fun with it. But think about that in your own life, right? Like what are the things that you're doing where the amount of risk you're taking, is it way worth the reward, right? Like what kind of reward are you getting for the amount of risk you're taking to get it? Or if you're ignoring something completely just to save a little bit of money, What does that look like? Because I've seen that before. We ignore a problem and we're like, "I don't think that's ever going to happen." Well, great. Why are you ignoring the problem? "Well, because it's going to cost us $10,000 to fix it." Okay, but what's the— so the low reward is you save $10,000. What's the risk? "Well, the risk is we could shut down operations." Right? Whoops. No-brainer. That's asymmetrical risk. You know, but sometimes we take such a short-term viewpoint on things that we don't think about the, you know, the long-term results of a decision. Right. You know, we talk about hiring drivers, you know, and we talk about like these drivers that are, you know, "I don't really like the camera in there because what it's going to do is going to show me as a bad driver." Right. And you might say to that fleet manager, well, you've got some bad drivers, you know, Because I've heard this before, "Well, we can't get rid of people because, you know, there's a technician shortage out there or there's a driver shortage. You know, we can't afford to get rid of people." And you take it back to our Intentional Culture episode, you take it back, you know, to stakeholder satisfaction. But the idea is, okay, so you're willing to pay this driver who's willingly putting your company at risk, right? And you take that scenario where we can't let go of drivers that are causing us— that could cause us potential harm. That's low reward, right? We're keeping drivers instead of going out and getting the drivers we need or paying more for drivers that are, that are really good drivers. And instead we're taking on this huge amount of risk that that driver, you know, is going to go out and get on drugs or they're going to go out and you know, they're going to rear-end somebody, right? Because they're paying attention to their phone or petting their dog in the back, like you said, right?

So on average, that driver that you're talking about is going to make the company maybe $200,000 annually. That one bad accident? Millions.

Yeah. So what's the cost? What's the, what's the risk versus reward, right? And that's asymmetrical risk and reward. And you have to figure out, like, is that driver really worth it, you know? Is keeping that driver worth it? You know, yeah, there's a driver shortage. Well, if you let go of that driver, you cost yourself $200,000. But if you keep that driver, you might have just cost yourself $20 million. Asymmetrical risk, right? You got anything else on that one?

Well, I mean, I do, but I want to get into just our next topic about talking about mitigating risk before we start getting into some heaviness.

So we've talked about all this crazy risk and you're like, oh my gosh, I don't even know why I run a fleet because there's just too much risk. I'm gonna kill somebody, right? And I don't want to do that. There's too much responsibility. Look, it's okay, right? This is where we come in and we're like, proactively identify. Productive paranoia is not just paranoia, it's productive paranoia, right? It's about taking action. Figure out what you can control, figure out what needs to be controlled. Don't worry about the rest, right? Like, you figure out what you can control, do what you can, You know, I always love the flowchart. It says, what are you worried about, right? Can you do anything about it, yes or no? If you can't do anything about it, stop worrying about it. Like, there's nothing you can do, so stop. If you can do something about it, then do it. Don't worry about it anymore, right? Like, there's, you know, it's one of those two options. So as far as things you could do to help mitigate some of the risks you identify, Obviously, insurance is a form of risk mitigation, right? You're actually sharing the risk with the insurance company. That's their whole model, right? They charge you a premium with the idea that, you know, if something ever catastrophic happens, they're gonna cover you, right? That means going out and getting general business liability insurance, maybe getting some umbrella insurance, right? You know, we've got for your personal drivers, obviously you're doing, you know, auto insurance and You know, but you need to be insuring your buildings. You need to be insuring all your assets. You know, make sure you've got good workers' comp insurance. Nothing will get you in trouble faster than having a workplace injury and then not having workers' comp plan. Right? So make sure you have all those things that you need to. What are some things that you guys have done? Right? Probably like driver training.

Yeah. I mean, there's a, there's a lot of driver training. So typically you'll do, just depending on time of year, do quarterly driver training. We would do safety videos. That they would have to do once a month, which is usually tied to a bonus or something like that. When a driver comes on, you do driver orientation. But I've never been a really big fan of driver orientation because most everything that a driver— you're— so, or driver orientation, some companies is a day, sometimes it's 3 days, sometimes it's a week, but you're shoving all this information down someone's throat that they're never going to remember anyway.

Oh, it's like drinking from a fire hose.

It is. It's— driver orientation is the stupidest thing out there. Because you're trying to inundate these guys with, hey, these are our policies, our procedures, here's what you do safety-wise. Well, they're already drivers, they already know that stuff, or they should know that stuff, but you're trying to shove everything in a week and it's never going to happen. So it's not good effective training. I think that training over time is usually what helps the best. Yeah, but then just talking to them, because if you have like little red flags, so if a driver keeps getting flagged for speeding or they're going over their hours or whatever else, usually just a heartfelt conversation is going to help change that behavior because they know that you, you recognize that something's wrong and you're addressing that. And then if it continues, obviously, you know, you take preventative action, most likely going to get rid of them at some point. But training is all over the place. Schneider does winter training. When winter hits, every driver has to go through winter training. Not every company does that. In fact, that's the only company I know that actually does winter training.

It's actually a really good idea. Yeah.

So for driving in snow, chaining up or whatever, they actually physically make drivers go through it. With their safety people. Yeah, here's winter training.

Funniest thing I ever saw was, you know, I'm a big TV guy, right? So we're watching this, I think it's called Highway Through Hell, right? It's all about going up the Coquihalla in, you know, what is that? That's up in Canada, right? Over towards the West Coast.

Yep.

And it is just this nasty highway and storms roll in there and you get all this snow and, you know, there are so many times where drivers get up there and the truck drivers don't know how to put their chains on, right? Because they were never trained. You're like, you're in Canada in the winter, like, how do you not know how to put chains on? You've got to know this. This is survival stuff, right? You know, if you haven't ever watched Patrick McNamara, Basic Dude Stuff, right? Go look him up on LinkedIn, it's hilarious. But I could totally think about basic driver stuff, right? Putting chains on tires in winter, basic driver stuff.

Yeah, you know, in the US, Donner Pass, the exact same thing. Yeah, going from Reno over to California, going Donner Pass, you would be— you would— it would shock you how many drivers, they'll just sit there and wait until chains lifted because they don't know how to do it or they don't want to do it.

They don't want to get out of their truck. And look, I get it, it's cold.

Oh, it sucks, right? Yeah, throwing chains sucks.

Throwing chains is— it's difficult, right? Like, your hands hurt. It's not fun. But if the difference is, hey, you get over the mountain or you don't, right? Or you get stuck and off the side of the road, now you've got to get heavy rescue involved. Man, that's expensive, right?

Oh yeah. Do you know they actually have self-mounting chains for tires?

Do they really?

The weirdest thing I've ever heard. They actually do.

Huh. Yeah, you just throw them on, they like snap on.

I don't know how it works, but I know we had them at my last company because we were up in Colorado going to Mines Hall and stuff. But yeah, you actually have— there's self-mounting chains for tires.

Apparently you needed some training on self-mounting chains, right?

Yeah.

How do these work?

Exactly.

But that's a great idea though, and it's a refresher too because hey, we've had all those nice summer months, you know. I wish we would do that here in Arizona anytime it rains, you know, like just teaching people, this is how you drive in the rain. I know it's weird, we only get it 10 days out of the year, but when it happens, it happens in droves, right? And all the oil comes up and you got to understand like your stopping distance changes.

But that doesn't mean drive like a jackass, go 30 miles under the speed limit, right?

You don't do that.

Have your flashers on, right?

It's not fog weather, you know, come on now. But yeah, just some driver training, like anytime the season changes. That's a wonderful idea. You mentioned collision avoidance. You know, that's a terrific thing. A lot of the new cars are all coming with this huge safety feature. Yeah, I do remember the first time that kicked on in one of the rental cars I was driving. It did. It totally scared the crap out of me. You know, all of a sudden it's beeping at you and it's, you know, like your car is jolting and you don't know what's happening other than your first reaction is, I got to get my foot on the brake. And you realize I'm already braking before my foot ever got there. Yeah, um, there's a couple times I'll tell you, you know, driving in my Jeep, and the brakes in that Jeep Cherokee were terrible, especially after I put the lift and the 33-inch tires on it. Absolutely atrocious, right? Things that 19-year-old kids don't know are things like physics and what happens to the stopping power of a Jeep Cherokee when you have, you know, bigger tires, more weight, more more rotational momentum, right? What do you do? Well, you got to give— you got to increase your stopping distance, right? Because it takes longer to stop that vehicle now, or you got to replace your brakes every once in a while. Something else that 19-year-old kid with no budget didn't know, right? And so there was a couple times, you know, getting into a rear-end accident with a Jeep. I'm like, man, if I had done what I needed to and replaced, you know, kept up on my maintenance with the brakes, would have been a lot better too. But B, you know, having some collision avoidance, that would have saved me a couple Jeeps, you know?

Right.

I put a couple through salvage because of some of the wrecks I got in with those. You know, I'm not proud to admit that, but, you know, well, it fits, right? Yeah. They say confession is great for the soul, but terrible for the reputation. I think we just maxed— it just hit that.

So just don't ride in a car with him or a Jeep. Maybe a car, just not a Jeep.

Well, you know, that's 10 years ago. I think it was the last one. So it's, it's been good. We may not think about it this way, but PMs, right? PMs are a total risk management strategy. You do PMs proactively, right? You do your routine maintenance, you do proactive maintenance to find things that are breaking or find things that need replacing so that you don't have to replace them on the road, right? You're mitigating the risk of a road call or a breakdown on the road.

Well, you're saving yourself money, but more importantly, you're saving yourself from having those faulty brakes.

Yep.

Or your airlines that stop working, or your flashers or blinkers, or whatever the case may be, you're reducing that risk of something going wrong because you didn't check. And it's so easy. The fact that people don't do PMs, to me, it just blows my mind. It's 15 minutes. 15 minutes, you walk around real quick, and you make sure everything's okay. That's preventing you from possibly being down for hours with something else.

Well, or even just getting stopped and hitting, you know, dealing with a CSA violation.

Oh yeah, the DOT, they'll, they'll, yeah, they'll fine-tooth comb that thing.

And yeah, and anything they find, right?

And it's on the driver. That's the thing, is it goes to the driver, not the company, right? So that driver didn't take that 15 minutes, and now the CSA stays with them. It doesn't go with the company, right?

I mean, technically goes with both, but hey, we can go look up and see, you know, if you ever want to know like what your CSA score is, you can go look that up. You can You can go see what your compliance scores look like. But, and if you're ever wondering, boy, what should I add to my inspection to make it more effective? Go look at your CSA audit reports, right? Like, go pull them up online. It'll tell you everything it found and analyze it for you and tell you where your problem spots are. Add those items to your inspections, right? If you know you have a problem with airlines, you better be inspecting your airlines.

Yeah. The stupidest thing we ever got hit for, right? One is seatbelts. That's just dumb, right? Because a lot of drivers too, when you get pulled over, the seatbelt comes off. And if you get an officer that's just not being very nice that day, they're going to give you a ticket even though you just took it off. But the stupidest thing, fire extinguishers. Not having a fire extinguisher in your truck and getting dinged for that. Yeah, how dumb.

Well, and how simple to just fix it. Yeah, right? Just put a fire extinguisher in there.

Easy.

Make sure it's charged, right?

Very, very easy. That's absolutely right.

Boy, and I tell you, like, that's a— and you think about, again, low risk, high reward, right? Actually, that's exactly it. You put a fire extinguisher in your car, that's low risk. The high reward is your car doesn't catch on fire, right? I can't tell you, I think I've seen 3 car fires here in Phoenix in the last probably 2 weeks. I don't think I've seen this many in a long time, and all of a sudden there's barbecues everywhere, you know?

Delicious, right?

So again, mitigate the risk, identify what's the worst case scenario, you know? Well, we get broke down on the side of the road, car overheats, catches on fire, something sparks somewhere. We didn't have a fire extinguisher in the car, the driver couldn't put that out before it became a catastrophic loss.

Yeah.

Now you've lost not just the truck and the tractor, now you've lost an entire customer's load, right? Good luck with that.

Yeah, that claim went from $120,000 on a truck to, you know, $300,000, $500,000 depending on what the cargo is.

Yeah. Drug screens, another thing that you can help with your drivers, right? Just helping them Make sure that they understand, hey, drugs are bad, right? Especially when you're behind the wheel of a huge 18-wheeler. It's not a good combination. If they're driving, you know, city equipment and they get in an accident, the amount of— the amount that insurance claim goes up, right? If there's a logo on the side of the vehicle, you can pretty much 10x that claim amount.

Oh yeah.

Right? You know, if you get in a personal accident, that's one thing. You go into an accident with a company vehicle, it's like a target on the side of your vehicle, right? Some people aim for it. You know, well, if I get an accident with a county vehicle, well, now the county is going to have to pay out, right? And they usually will.

Well, they will because you, you pay out so that you don't increase your legal fees with your lawyers. That's what we would do if it was something that was usually less than $100,000. We would just pay it out because whatever we were going to spend to fight it would be more with those legal fees.

Yep.

So you're always a target when you have that logo. You're absolutely right. It's absolutely ridiculous.

So the idea is that, you know, you're gonna put drivers behind the wheel, they need to be responsible, right? And so doing drug screening, and not just at the time of hiring, you need to do drug screening throughout, right? And there's— you got to have policies around that to make sure it's not discriminatory or anything, but you need to make sure that you have policies in place for for drug use, right? A lot of places now marijuana is legal, but that doesn't mean that you can still drive under the influence, right? Alcohol is legal, but you can't drive with it. Same thing. DUI applies to both. You got to make sure those policies are written, that it's established, hey, you can't do this while on the job or while driving, and you make drug screening a part of your, your safety culture, right?

You do. And the DOT, they require trucking companies, if you have a CDL, you have to do, you know, random drug tests. So you have to randomly drug test, oh, 10% of your fleet, 15% of your fleet. I think they just raised it, but you have to do a random on certain— on a certain percentage of your fleet. That doesn't always work, though.

Not all the time. Right.

So a trucking company that I was running went under because of the fact that we had a driver who had a random drug test the week before he got into an accident. He rear-ended someone. Killed a lady, permanently disabled her son so that, you know, he's not a vegetable, but he's just not all there mentally anymore. And it's funny because, like, I think anybody could have gotten in that accident. He crested the hill, the sun is in his eyes, that car is sitting in the highway waiting to turn just over this hill.

Oh yeah.

So he probably wouldn't have been able to avoid it regardless, but he was on cocaine. He was on cocaine even though he just had a random drug test, which he passed with flying colors the week before. Maybe he got that drug test, he's like, I'm good, let's go. Yeah, let's go on a bender, right? And there's probably a lot of fault we could take on ourselves for different things, but, but we did what we were supposed to do, at least what was legally required by law. Well, what ended up happening is get sued, insurance company drops us because of that lawsuit, right? Um, don't get one other bid as far as insurance carriers, and it was quadruple the previous premium. The owners decided, you know what, we're just going to go out of business instead.

Yeah.

From one driver's actions.

Yeah. And you look at that and say, okay, what's the risk mitigation, right? How could you have known? Well, you know that drivers, you know, occasionally they're going to be driving impaired, right? So you do things like random drug screening. Now you look at like the legal side of that. Yeah, we did the legal minimum. Sometimes, you know, for the listeners, like legal minimum might not be enough. You might have to go above and beyond, uh, you know. So it might not be— maybe it's not random anymore. Now we do weekly drug tests right now. Sometimes it gets expensive if you do them.

Yeah, if you do them yourself, if you're qualified to do them yourself, it's less expensive. But in hindsight on that guy, and really on any driver, right, the reason he was on cocaine is because he was tired. Just having a conversation with someone saying, hey, how are you feeling today?

Yeah.

Did you get enough sleep? Are you good to drive? Right. You can ask questions and they may lie to you. You don't know. So in my mind, the only thing we probably could have done is assess that driver a little bit more as far as having a conversation with him. And if we realized he was really tired and he was, he actually been up for 30 hours.

Oh, wow.

Not driving, but he'd been up for 30 hours.

Right.

We found out afterwards. So he took cocaine because he was tired. He needed a pick-me-up because he had to work.

Right, and no doze wasn't going to do it.

No, no, no, absolutely not. So if we had known that he'd been up for 30 hours, guess what we have done? We're not going to give you a load.

Yeah, why don't you take it easy?

Yeah, go sleep.

Yeah, that's just crazy. It's all another thing you should be doing, right? And it'll help too, you know, because you don't want somebody like this who's had this kind of history. Obviously you see that in their CDL, but their background checks, right? Right? Like you do background checks before you hire somebody. A lot of companies do this anyways, but you know, you go out and you do a background check. Make sure— think about it, you're hiring a financial person, you want to make sure that there's no white-collar crime in their history, right? They're gonna be trusted with the money. Well, it's the same thing. You're putting somebody behind the wheel of a vehicle, you want to make sure there's no driver issues. You know, if you've got a technician that's coming in, you want to make sure that they're stable, that they've got that they're good, right? Now, having said that, I do have several good programs where they actually try to rehabilitate ex-cons, right? They get out of prison, they've been released on good behavior, they were nonviolent offenders. And so some of these you take into consideration, and again, you look at the risk and you look at the reward. So the background check is a good practice, but what you're looking for is specific behavior, not necessarily Oh, well, you got arrested for this thing back when and you did some, you served some time in jail. You know, I want to emphasize like that doesn't automatically disqualify anybody, right? But there's things that you do like this to help mitigate the risk of owning and operating a fleet, right? You identify it and the key here is to be proactive, right? Don't wait for something to happen and then you react to it. Yep. Because then it's too late.

You know, most companies' biggest flaw is reacting. They don't do the proactive things, right? That company I talked about earlier that was like, that had the all the rear-end accidents. Well, that was reactive. They're reacting to something that already happened, right? If they proactively have thought, you know what, how can we be more safe? Let's do this. A lot of companies, they'll go get cameras because they're trying to be proactive about settling insurance claims or coaching and training drivers. But that's, that's, that's not common. Most people, they have an issue. And so then, hey, let's, let's address it at that point.

Right.

And usually it's too late.

Yep. Well, that's going to wrap it up for us today. You know, thanks for hanging with us as we talk about risk management. Again, this is the fourth pillar of fleet success. It's been kind of a fun series as we define the category, talk about everything that we're talking about, you know, stakeholder satisfaction, intentional culture, resource efficiency and risk management. We will see you next week. Make sure you tell all your friends and coworkers about the Fleet Success Show. Tag us on social media @fleet_success and subscribe to Fleet Success Show wherever you're listening to podcasts. Until next time, we'll see ya. See ya.

Thanks for joining us on this episode of the Fleet Success Show. If you liked our show, we'd appreciate your 5-star review. Be sure to subscribe anywhere you listen to podcasts and come hang out with us anywhere on social media at Fleet Success. See you next time.