Episode 054: Weighing Liability in a Fleet Operation

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.

All right. Welcome back for another episode of the Fleet Success Show. I'm your host, Josh Turley, joined today by Jeff Jenkins.

What's up, guys?

So we're going to excuse Steve today. He's off dealing with family matters and wish him and his family the best. But we have a fun— this is a reader-suggested topic today.

This one's exciting.

I am excited about this one.

It's a good one.

I think one of the things that we take for granted in fleet is that everybody has a fleet in the fleet management industry. And you go to NAPA, you go to GFX, and you just kind of like, it's an assumption that we have a fleet and nobody ever really thinks about, well, what if we didn't have a fleet? And what are we introducing by bringing fleet on as an operation in our business? You know, maybe we're a, you know, a hauling company or not a hauling company because that's all you would do is transport. Yeah, maybe we're a construction company, you know, but now we've got a fleet of vehicles instead of having owner-operator vehicles or just renting trucks. Now we actually own our own vehicles. And what are we doing by putting our drivers and our employees out on the road? What kind of liability do we open ourselves up to by owning the vehicles versus renting or leasing the vehicles? You know, and it's really kind of eye-opening to think about it from that perspective of somebody who maybe, maybe just starting up a brand new company. We talked to somebody at NTEA who was starting up a new garbage company.

Yep.

And you know how you go from all of a sudden, you know, we're not just talking about an F-150 that you have to go buy for your electric company and it's just you and the road. You know, for like a solopreneur type operation. But no, you're doing a garbage company, which means routes and customer service and garbage trucks, which are not cheap. And how do you, how do you manage the liability of that? And we thought it was really nice because it dovetailed nicely to the fourth pillar of fleet success, which is all about risk management. And if you don't remember what that pillar is, I'm going to just real quick, it's proactive process. Of identifying, assessing, and controlling threats to the organization and its stakeholders. And we always emphasize the word proactive. And so I really like that this listener, they're being proactive. They're thinking about what are the liabilities that come with owning and operating a fleet. And so, like, my first thought, the number one liability whenever you own a vehicle, it's not the vehicle, it's the nut behind the wheel. Right? Like, that's the loosest nut that you got to tighten down. Um, and so as you're doing this, it's, you know, it's not a machine problem, it's not that. It really does come back to hiring the right types of drivers. And we know that there's a huge— it's not a driver shortage, it's a specific type of driver shortage depending on the industry.

Maybe a competency.

Yeah, competency shortage for sure. I know school districts are dealing with a major driver shortage in A lot of that's just because of the CDL requirements for school bus drivers.

Yep.

But it really does come down to what's your policy and how are you using your hiring practices to mitigate the risk of the number one biggest liability with a vehicle, which is the operator. So you've been on, you've gone through this and you know, like in trucking, I think the driver is probably the most important part of the the equation.

Correct.

I don't know that it affects government employees as much because most of the government employees, like, they have a different job than just being a driver and an operator. You know, like, police officers obviously have a lot more training they have to go through. They get defensive training and things like that. Maybe a little bit different than a Pub Works driver. But trucking, for me, like, there's just something totally different about training and teaching and hiring truck drivers. —because of the liability involved in that.

Yeah, so typically throughout a week you're going to get X number of applications that come across for drivers, and of that number you're probably only going to consider 20%, which is crazy, right? You automatically eliminate 80%, but that's based off of their previous driver history, right? You pull up their MVR, you look at their work history. Is it someone that's hopping from job to job, or is it someone that's sticking around for a while?

And when you're looking at their MVR, like, what are you looking at there? Yeah, and the MVR motor vehicle record?

So you're looking at basically their safety history more than anything else.

So you want to see— Have they been in accidents?

Accidents, was it preventable, non-preventable, um, are they habitual speeders, right? Are they speeding a lot or are they having, you know, just different citations or violations? Because you can look at that and predict how safe someone's going to be based on what their previous violations are. Yeah. So for example, like, if anybody that's speeding or has a ticket for over 15 miles an hour, we would automatically disqualify, say, okay, well, we don't want them because they have a lead foot. Anybody that had a preventable accident in the past year, you'd look at it and then you'd see, well, what was the cause of the accident? You'd get more details. A lot of times we'd actually reach out to drivers and say, hey, you know, we don't have the police report. Do you have it? Can we look at it to see what, what was the cause and what was the effect?

What were the extenuating factors? Right. Because it might have been the police said it was preventable.

But yes, it's a gray area. Yeah. And you always want to give the guy an opportunity to defend himself, right? It's not a black and white statement. Typically, if there's a fatality involved with it, it's a no-go. You don't proceed with that. And a lot of this isn't necessarily just because that driver is 100% unsafe. It's because you're guarding your own liability, right? You hire someone that just had an accident where they were at fault, there was a fatality, and then they get in one with you, you're more likely to be sued and judged at hiring at-risk drivers. Right. So that opens you up for—

that's a whole nother set of liability I wasn't even thinking about.

Absolutely. Um, you know, so, but typically, like, if a guy has more than 2 preventable accidents in a 3-year span, right, you wouldn't hire him. So you go through and you look at these things. So you're disqualifying 80% of all these drivers based off of MVR, based off of their work history, based off of their drug and alcohol history. Um, so now you get that 20%. Okay, well, that 20% that comes in they're not necessarily trained the right way in driving. Or, you know, you do road tests in trucking and you bring a guy in and it's shocking how many people fail a road test when they come in. So you're going to knock another 5 to 8% off just on failing a road test.

And what are some things that they'll fail during a road test? Right.

Like following too closely is probably one of the, the, the most common. But, you know, a lot of trucking companies have gone from standards to automatics. But when we were standards, you'd actually disqualify them because they couldn't shift, because a lot of the schools, they switched to automatics. Companies didn't have automatics. They were using manuals, so they didn't know how to shift. Backing is probably the next most frequent one.

And that's a big part of getting your CDL is backing. Huge part of your CDL. So if you can't back, like, did you get your CDL 20 years ago? You just have never had to do this before? Like, Yep.

And if you're— and it also depends on this road test what type of freight you're hauling. So true. You know, if you're a flatbed driver, securement. How is your load securement? Right. Right. Do you pass or fail someone based on what their load securement is? Because that's a whole nother set of rules and regulations that you actually have to follow. But in that orientation, right, you take the time and you go through and you talk about just different company policies, but then you also take that time to go over some safety tips and some trainings. And a lot of companies, because it's an added expense, they try and shore up that, that orientation period to like 1 day or 2 days.

As quick as we can get it in because we need that driver on the road producing money for the company.

100%. Now, some companies, if a guy comes in and they don't pass their road test or that you feel they're not fully qualified, they actually have trainers and they'll send them out with a trainer. And you spend a week, 2 weeks, 3 weeks, depending on how much help that driver needs. To get them up to speed and to be safe. But I was at one company where we had orientation, it was 3 days. And it was like your first day you go and you do your drug and alcohol test, you do the paperwork. And so like day 1 was just a complete waste of time, pretty much, right? And then day 2, you got into some of the safety training, your road test, and then day 3 would be nothing but like learning payroll and benefits and just like the HR type stuff.

Kind of a repeat of day 1. Yeah.

You had one day of actually getting to know if that driver was safe enough to be out on the road in your equipment. Right. So think about that, right? I'm going to put this guy on a piece of equipment. When you talk about truck and trailer, you know, you're close to $200,000. Yep. Depending on the truck, make and model.

Don't even talk about the cargo. No. Right. And the worth of the haul. No.

And then you've got 80,000 pounds behind them after one day of checking them out. Now you have their MVR, so you have their work history, so you can see But maybe they just got lucky. You don't know, right? But a lot of companies rush through that training because they want to get that body in the truck. The truck is sitting, it's not making any revenue, you still have payments on it, right? You have customers that need their loads hauled, so you're going to just hurry up and get that guy on the road so that he can start generating that revenue. But is he really qualified? Have you really thought through what those liabilities of rushing someone through and getting them on the road actually is?

And I think if you looked at it from A lot of us, maybe somebody comes to us and says, "Hey, can I go borrow your personal car?" We don't treat vehicles in our fleet with the same care and compassion we would for our own personal vehicle. Now, I wouldn't honestly go run somebody's MVR if they're going to borrow my car, but if I knew what kind of driver they were, I'd say, "Hey, I don't think I want to put you in the wheel of my only vehicle." And my insurance is going to have to pay for that and all that. It's just different. When you've got a fleet vehicle, I think we almost need to take more of that proactive mindset of, well, what if this was my vehicle and this is my daily driver and we're pulling the MVR, we're doing that. We would probably make more of an investment in safety as a strategy and, you know, doing more training, doing more road tests. I think a lot of people too, like after you did your 1-day orientation, how often would you put drivers back through that?

Never. Never, right? Yeah, because you're cutting that out because it's a cost, right? We've talked in previous episodes about continuous training, yeah, right, to make sure that happens. But those companies, if they're going to do those continuous trainings, what is it? Hey, watch this video, right? And then you've got some type of a service where it shows that you watched a video, but there's no— yeah, right, no interaction to make it so, hey, I understood this.

Yeah, that's why I like the— we've got a tool called Trainual. And a lot of other companies out there use this kind of thing too, where they've got like an e— we call it an LMS, a learning management system where they can do the videos and then they can test you for comprehension. They can even make you like check boxes and things like that in the video. So like you have to be paying attention. Shoot, GPS Insight did this and they had us as you're sitting there learning how to use GPS Insight and they would sneak something in like you would have to be listening to the audio because it would be very quick. Like just a 2 or 3 second statement, you know, one sentence, and then they'd ask you a question about that specific sentence. And so you had to— I actually had to watch the video like 4 or 5 times to get that one sentence. Like, that's a brilliant training retention strategy. You know, it's like, well, it's not enough just to do it once. We've got to do it 7 times. Yep. You know, so if you're looking at, well, how do I make sure that my policies are good enough? And I think if you were to ever get sued, maybe there was a fatality and you were to come in and say, well, look, this is how we handle driver training. We only do one day up front and then we never do it again versus a company that says, nope, every quarter the driver's off the road for a day and they're doing driver training with a driver trainer. Right? Like we have cohorts of drivers and they go through this training once a quarter. Yep. I would say that you'd be much less likely to have a— oh, what's the word? Punitive? Case, you know, where you have punitive damages assessed against you, where it's, you know, where you can be found criminally negligent for, you know, putting a bad driver on the road. You'd be a lot less likely if you were taking proactive steps like that and making it a part of an ongoing effort instead of just a one-and-done.

Yeah, so if someone's never been a part of that process to where they're getting sued or there's something happening where there was an accident, that process is— they dive deep. Yep. They look at what, hey, what are your company policies when it comes to hiring and firing? What are your company policies when it comes to ongoing training? What are your company policies when it comes to, you know, your orientation? I mean, they'll go through the whole gamut. And if you've got a policy in place and you don't follow it, you're screwed. Yep. Right. If you don't have a policy in place, you're screwed. I mean, there's like, there's no easy way out of that, right? You're totally going to be screwed over if you don't get this in line and people that have not had a catastrophic event are never really going to recognize what can happen until it happens to them.

Well, and that's exactly the thought, right? Is, well, that'll never happen to me. It's like everybody when they get in the car, you know, are they, are they clicking their seatbelt? Are they speeding? Are they— well, I'm never going to be the one to get in a car accident. And yet, like we just heard from Pam O'Donnell last, you know, at Fleet Success Summit talking about, you know, there's 29,000 preventable accidents, fatalities from accidents in the U.S. every year from car accidents. That's crazy to me. Yeah, it'll never happen to me until it does.

Well, and most people don't put in company policies until something happens. And I give you the perfect example. You would think that having a semi would mean you don't do a U-turn on a highway, right? I mean, that just— like, you think about that and that's common sense. But we hired someone—

common sense isn't common. No, it's not.

Unfortunately, we hired a driver. He comes out of orientation, okay, passed his He passed his test, like everything was good, right? So he comes out of our property and he's gotta go left and it's only a right turn, but up on the, in the middle of the highway, it's two lanes on each side, right? There's a place where you can turn left. Okay? It's not big enough for a semi-truck by any means. This genius decides he's gonna go and he's gonna do a U-turn. Well, he does a U-turn right in front of a brand new Dodge Ram. Uh, huddles it. The guy gets injured. Well, obviously we're screwed just in general, right? I mean, we got sued by him. We had to settle. It was a very expensive case. But because of that one thing, we had to then state what was the obvious: no U-turns allowed in your truck. But we didn't think— like, we didn't think we had to have that as part of our company policy prior to that accident.

Well, it makes you wonder if maybe he was doing different types of trucks before he came to you, right? And like, you're looking at his driver history. Well, maybe he was used to using, you know, little street trucks or the, like the 40TUs, you know, like just a short truck instead of a long 53-footer, you know, like it because it changes, you know, how you're operating and where you're operating. And, you know, maybe he's only ever been over the road. Yeah, it's one of those things that you just constantly have to— it's like whack-a-mole, you know, you just find one thing and then every time a thing pops up, you create a new policy and you whack the mole, right? And you do the next one and next one. And you just keep shoring up that training. But then it's got to be the continuous iterative process. And that's why I think it's even more important that you do continuous training, because let's say that I came into your company 10 years ago and 10 years ago it wasn't a policy that we didn't do U-turns and it wasn't a policy that, you know, like there's 10 new policies that we've implemented since then. How is the old driver who's been with you forever staying up to date on all the new things coming around?

Besides an email that shows up in their inbox? Well, it's funny because what typically happens when you add a new policy in, it'll be sent to their electronic device on their truck. Yeah, right. So most everybody's driving. So let's say we say send it at 10 AM today. Well, most of them are driving, they're on the road, and they can't read those messages until they stop, right? Well, when they stop, they've got so much other things they're trying to do. They're trying to either unload their load or load their load.

I mean, dismiss, dismiss.

Yep. No one, no one reads it and talks about it.

Yeah, so it definitely takes being proactive with driver training, with explaining what you're trying to do, why you're trying to do it, and teaching them, like, you know, this is how we do safety, this is how we treat safety. And I guarantee you, you do that quarterly, you're going to send a message to the drivers, we take safety seriously here. And you're going to send a message to the regulators and anybody who comes in to investigate you, like, nope, we're taking drivers off for a week a year just to do training.

Yes, and it, and it does look good in litigation.

Yeah, because we know and we take our responsibility. Like, you want to talk about stewardship and fiduciary duty and like it's an obligation or a duty you have to society. You're taking that responsibility seriously. You know, we're not just throwing people behind 80,000 pounds and saying, good luck.

Yeah, well, and every company has someone in charge of safety, right, that has a fleet. There's someone in charge. What I would say is don't make exceptions either. So what usually happens is that, you know, you've got your recruiting department, you've got your safety department. So this recruiting department, they've been working on this driver for weeks and they finally get him to put in an application and start going through the process. Safety reviews it and they say, nope. Right? Well, what happens is there's a lot of operations people that they look at that and they say, oh my gosh, I've got, you know, 8% of my fleet sitting on the side of the yard and it's not filled. I need trucks. I need drivers. How bad is it? So they look at that and they're like, eh, we're going to hire this guy anyway.

How desperate am I? Yes.

And just disregard what safety has. And something I had to learn, right, running a trucking company was safety's got the final say. Like, there were several times I would go and I would question safety on, okay, well, what about this or what about this? Right. And, you know, sometimes they'd be like, oh yeah, you know, you're right. Or— but if safety guy was like, no, I do not want this guy here, I would always stand by that decision. Yeah. Right. Because they are ultimately responsible for the safety on the road.

Right. Well, they're trying to prevent —something happening to the organization. Correct.

Right.

They've got the organization's best interest at heart. And it's not that the operations guys don't. It's just that they're being short-sighted instead of thinking of the long term.

They have a different goal. Yep. They have a different goal. Their goal is money and revenue on the truck. Right. The goal of safety is to keep everything safe and keep the company existing.

Exactly. And so, well, and I think this goes to the other part of it, right? Which is other things that you have when you have a driver in the seat. Which is, are they able to even operate that machine, right? And so we've got the CDL and all that, but are they coherent? Are they awake and alert? You know, we talk about hours of service and doing, you know, like time on the road, drugs and alcohol, right? Are they under the influence right now? And instituting drug testing policies is an absolute must. Like, I don't know that you can get away with not doing that anymore. Like, like that If I found out a company wasn't doing that, I would absolutely say you're negligent. But then it's not enough just to do the tests, right? Which is a story you've told on this podcast several times, you know, is that you have to have somebody look people in the eye sometimes. You've got to have personal contact with these people before they get into the seat. Yep. You know, and, and that's another thing that you can look at and say, you know, I looked at this person, looked them in the eye, they looked like they were on. Short of us doing a breathalyzer before they get into the vehicle, which I know is common, that's actually happened, like legislation is being introduced around that topic. But short of getting to that point, like having another check and safety check in place to keep somebody who's high on cocaine getting in the driver's seat of a vehicle, what are other things that you'd recommend as people protect against a liability like that?

You know, I think once— well, one, you know, there are a lot of resources online. Yeah. So if you're not sure that you have all the right policies and procedures in place when it comes to making sure a driver is adequately prepared and in a good enough state of mind to be able to get on the road, go look at those. Right. Because there's a lot of things. I mean, you talk about, you know, there's companies out there that fire drivers if they don't wear a seatbelt, they get caught without one. You know, there's companies out there, we talked about the U-turn, but, you know, making sure you stop on train tracks, that's in every policy or it should be, you know, I mean, there's just like various things that you've got to go out there and you've got to make sure are in those policies and then you've got to follow them. But you've got to make sure you've got the buy-in at the top. And it would baffle me if someone that is a CEO or the head of a department, you know, just like, oh, screw it, you know, we don't need to follow those procedures. Right.

That's just legal being legal. Right. That's just— that won't happen to me. Yeah.

And if that happens, you're at the wrong place. You need to go find a new job. Amen. Right. Because here's the thing is, you as the fleet manager are responsible when something goes wrong. Like, you can be held criminally liable, especially if you know that someone's in violation or they're not, you know, able to be out on the road, whatever the reason. If that comes back onto you, you can go to prison. Like, that's a life-altering thing. Yep. Right. Don't let someone being stubborn, thinking that it'll never happen to me mentality, get you in hot water. Yeah.

And, and for a record too, as you know, as we've seen from several trucking fleets, I mean, we heard two cases at the summit, yours and then, you know, talking to Mark Rogers. He's had this happen as well. Fatalities happen on the road and they, they can happen to anybody at any time. Mark had been at a company for less than 30 days and one happened to him. You'd been at a company for a few years and did a random test and it still happened. Yes. The, the stick your head in the sand and hope it doesn't happen mentality is absolutely dangerous. And like you said, if you're at a company where they're not taking it seriously, one, that company is not going to be around very long because something will happen and they'll get shut down. Two is you don't want to be in the crosshairs when that does happen. It's not a matter of if, but when. And when it does, you don't want to be around it. Correct. I would go find a new place to work, but that's just me. Otherwise, you know, hopefully you can have upper management listen to the podcast and encourage them to take safety super seriously because you can't— you can't underestimate the impact that this can have on the longevity of an organization.

Well, you can't. And I would just say, for those of you out here who may question it, reach out to me. Honestly, I've got some stuff that'll like, you know, it'll take the hair off your chest because you can definitely be in a lot of trouble by not having an adequate set of policies in place to help mitigate that liability.

Yep. Well, that's going to do it for us for this episode. As a reminder, we got our first copies of the Fleet Success Playbook. What? What?

Yeah, that's super awesome. And by the way, the Fleet Success Playbook is a book. We wrote on the pillars of fleet security.

I don't know if we've talked about it. I don't think we have. So Jeff, Steve, and I all sat down and wrote a book about these pillars, and then we put plays in, like specific tactical exercises you could go do and implement in your own fleet. So we give you lots of stories, examples, and then we teach you how to go do it. Email us if you want a copy of that book. We can send you out info on how you can go pick it up. And if you email us, you might just get a free copy. Just, you know, dangle that carrot out there for you. Email address is podcast@rtafleet.com. And then, you know, just a little throw out there for anybody going to GFX, we're going to be doing a bolt-on day after the event event, you know, so you'll see an event there from RTA for a little Fleet Success Summit with Jeff, Steve, and I, and then doing a little RTA training after that. But if you're at GFX, please come stop by the booth and hopefully we'll see you at the day after on May 26th.

Absolutely. It's going to be great, guys.

Yeah. Until next time. Sayonara.

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 @fleet_success. See you next time.