Safety Management in Small Motor Carriers (2012)

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3“It is all about having/hiring the right people who have the right attitude. Then monitoring their progress helps keep them on track.” “Don’t get so big that the owner does not know every person on payroll and make it their business to personally check out every driver every day! Big companies are a big problem when they look only for income and not their relationship with those who provided it.” “Vehicle safety equipment is more often than not too costly for small carriers to obtain in today’s economy.” “The problem I see is for small carriers trying to keep up with all the changes and regulations that are taking place.” “Most owner operators and small fleet operators do a good job of maintenance and safety but are lacking in the back-up aspects such as paper work.” “The problem I see is for small carriers trying to keep up with all the changes and regulations . . .” The “stupid things [other motorists] do . . . create a hazard and put myself and other motorists in danger . . . anything can happen out there.” “In many companies, the owner wears many hats. Safety is only one and deciding where to expend your time and resources is a struggle every small company has.” These statements were made by small motor carrier owners/ managers in the survey and in interviews conducted for this synthesis study. This study explores the safety management problems faced by small companies and the safety manage- ment approaches they consider most useful. In addition to con- ducting the survey and interviews, the project team performed a research literature review of small company management, with emphasis on motor carrier safety management. The goals of the study are to (1) identify useful practices for safety man- agement in small companies, and (2) outline a logical and practical progression to more active and comprehensive safety management for small companies as they grow. BACKGROUND This study addresses Commercial Motor Vehicle (CMV) trans- port companies with a relatively small number of vehicles and drivers. Unified Carrier Registration (UCR) data (FMCSA 2010) yielded the following breakdown of U.S. motor carriers by fleet size: • One (1) vehicle: 44.8%. • 2–5 vehicles: 32.5%. • 6–20 vehicles: 15.0%. • 21–100 vehicles: 4.0%. • 101–1,000 vehicles: 0.6%. • 1,001+ vehicles: 0.1%. The total number of small U.S. truck and bus companies is difficult to discern because both the UCR and the Motor Carrier Management Information System (MCMIS) contain numerous inactive carriers. In addition, many registered car- riers are not primarily in the transport business, but instead are private companies that operate one or more trucks or buses secondarily in support of their core business (manufacturing, retail, services, etc.). Regardless of these caveats, it is safe to say that the vast majority of U.S. carriers are small, run- ning 20 vehicles or less. The same UCR data revealed that there are approximately 200,000 motor carriers in the 2 to 20 vehicle range, although the number of active carriers may be just half of that. Regardless, there are tens of thousands of small motor carriers in the United States that must operate their vehicles safely and in compliance with federal and state regulations, while staying financially viable. Several different definitions of “small carrier” are possi- ble. According to Small Business Administration criteria, a “small entity” is a company with annual revenues of less than $25.5 million. This translates to an average of 128 power units based on current economic analysis (FMCSA 2010). How- ever, this number of vehicles is far greater than that of the typical small carrier. Rather than choosing an arbitrary num- ber of power units to define “small carrier,” this project has been based on a functional definition relating to company management structure. Small carriers are defined here as those with more than one driver and vehicle (thus excluding owner– operators), but with too few drivers and trucks to afford to des- ignate a manager with the primary title and function of Safety Manager. These are companies where a single owner/manager performs most or all management tasks, including those relat- ing to safety. Further, he or she is not primarily a driver (i.e., drives less than 50% of the time), but is primarily a manager. E-mail solicitations to participate in the project survey were sent to broader groups of carrier owners/managers; however, the results presented in this report are limited to those meet- ing this definition. In the survey, the average carrier meeting this criterion had 10 vehicles. CHAPTER ONE INTRODUCTION

The safety of small companies can be problematic. Al- though there are many exceptions, small companies gener- ally have higher regulatory violation rates in roadside inspec- tions. In chapter four, Small Carrier Violation and Crash Rates, current and past roadside inspection statistics are reviewed and caveats regarding them discussed. The issue of whether or not these higher violation rates are associated with higher crash rates is less clear. The safety and compliance challenges faced by small companies will be examined in this report, with a focus on management activities. As was stated in one of the manager quotations, small company safety management functions are likely to be performed by a single individual who must also undertake other competing and more-pressing functions such as operational management, sales, adminis- tration, and financial management. A shortage of manage- ment time is often accompanied by a shortage of money. Small company vehicles are likely to be older and less well equipped for safety. Small carriers are less likely to employ sophisti- cated information systems or have elaborate driver training programs. On the other hand, small companies have some enviable characteristics from a safety perspective. Their owner/ managers have a strong foundation of knowledge and skill; the average survey respondent in this study has had 25 years of industry experience. Their managers often have direct, everyday contact with every driver, vehicle, and customer. Interpersonal relations are stronger in small organizations than in larger ones. Group cohesion contributes to better employee retention, which in turn fosters safe operations. Some small companies find a comfortable market niche and are happy to maintain a steady and relatively low-pressure operation. This report explores small carrier strengths and weak- nesses and identifies potentially effective safety practices for small motor carriers. Few of the issues discussed and prac- tices identified are unique to small carriers, however. By and large, the same practices will be effective regardless of car- rier size. Each company’s safety outcomes are more reflec- tive of its own safety practices and operating environment than whether it is large or small. METHODOLOGY AND MAJOR SOURCES Project methods included a carrier owner/manager survey (described in chapter two), case study interviews with ten company owners/managers (described in chapter three), and a literature review (methodology described here). Chapter four, Evidence Review, consists primarily of the literature review but also cites pertinent findings from the survey and interviews. Literature Review Methodology Literature review searches were performed using websites, academic databases, books, trade press publications, and 4 articles. The following databases were used to conduct the reviews: • Transportation Research Information Database (TRID), the largest online bibliographic database of transportation research. • Business Source Premier, featuring the full text for more than 2,200 journals. • EconLit, from the American Economic Association’s electronic database. • Emerald Group Publishing, featuring journals and books in business, management, social sciences, and engineering. • JSTOR, providing access to articles from more than 1,000 journals across the humanities, social sciences, and sciences. • SciVerse ScienceDirect, from Elsevier publishing, offer- ing access to articles from more than 2,500 peer-reviewed journals, and chapters from more than 11,000 scientific books. These databases were searched using a variety of topic-related key words and phrases, often in combinations to improve focus. Key words included trucking, safety, small business, small trucking firms, safety management, human resource management, risk management, operations management, occu- pational safety and health, safety culture, safety climate, crash reduction, driver turnover, driver retention, driver training, and driver supervision. As a supplement to the academic literature review, a request for information and commentary was sent to members and friends of the TRB Committee on Truck and Bus Safety (ANB70) and the Committee on Trucking Industry Research (AT060). In addition, the FMCSA Analysis Division and the U.S.DOT Volpe National Transportation Systems Center provided statistics on carrier violations and crash rates. Major Literature Sources This report cites scores of studies. Two past studies deserve special mention, as they each collected extensive survey data on motor carrier safety practices, with survey findings dis- aggregated by carrier size. I-95 Corridor Coalition Field Operational Test: Coor- dinated Safety Management. Volume I of the report (Best Practices in Motor Carrier Safety Management, Stock 2001) addressed best practices by conducting a survey of state motor carrier association members in several northeastern states. The nearly 600 respondents to the survey were said to represent a sample of the best safety performers. The survey addressed hiring criteria, retention, in-house and outside training, top management commitment, safety meetings and awareness programs, safety incentive programs, driver mon-

5itoring, and accident review. Trucking company statistics were disaggregated by number of carrier power units (1–9, 10–24, 25–50, 51–100, and >100). Bus company statistics were pro- vided separately, but not disaggregated by company size. The current study definition of small carriers spans several of Stock’s smaller carrier size categories. To avoid the presenta- tion of an excessive number of statistics, Stock’s statistics for just one category (typically 10 to 24 trucks) are typically cited in this report. Exceptions are made when there are large dif- ferences across Stock’s smaller categories. Stock also ana- lyzed roadside inspection data from the U.S.DOT MCMIS and compared driver and vehicle violation rates by carrier size. Best Highway Safety Practices: A Survey of the Survey of the Safest Motor Carriers About Safety Management Practices. Under the sponsorship of the FMCSA, the Univer- sity of Maryland (UM) Supply Chain Management Center surveyed “best safety performers” to identify and define their safety management programs and policies (Corsi and Barnard 2003). The study identified best safety performers through a two-step process, which included review of SafeStat perfor- mance data and recommendations from FMCSA state safety directors. A survey completed by 148 safe trucking compa- nies formed the basis for their report. Survey areas included general company information, driver hiring practices, driver training practices, encouraging and reinforcing safe driving behavior, managing and monitoring driver abilities, and man- aging vehicle maintenance. Many of the questions asked for respondent opinions of the importance of various practices, rather than simply asking if the practice was done. Statistics for three carrier size categories were presented: 1–24, 25–94, and >95 power units. Statistics were also disaggregated by cargo commodity types. No bus companies were included in the study. Key caveats regarding both the I-95 Corridor and UM reports are similar to those for the current report. Most notably, the respondent samples in each should not be construed as representative samples of the motor carrier industry. Rather, they represented “best performers” who were willing to take the time to complete project surveys and share information on their practices. Further, in the UM study there was a con- certed effort to limit the survey to best safety performers based on compliance data. Past CTBSSP Synthesis Reports This report extensively cites past CTBSSP reports, especially those addressing core carrier safety management functions. None of these past reports focused primarily on small carrier issues; however, many of them addressed issues of impor- tance to small carriers. More information on the CTBSSP, including free downloads of all past reports can be found at: http://www.trb.org/SynthesisPrograms/Public/Commercial TruckandBusSafetySynthesisProgram.aspx. DISCLAIMERS Five disclaimers are necessary regarding the study method- ology and the information presented in this report: 1. Several commercial products and services are mentioned in the course of the interviews and evidence review. No product or service was formally evaluated for this report. Company and brand names provided are illustrative of available products and services. Neither TRB nor this report endorses any company, product, or service. 2. There are regulatory and government policy issues and activities underway regarding various topics in this report, especially those relating to motor carrier enforce- ment. This report did not systematically address these issues and makes no policy recommendations. 3. Project survey data are based on convenience samples of responding motor carrier managers. Survey data represent the opinions and practices of the respondent samples, not of larger populations such as “all carrier managers.” As explained in chapter two, survey sam- ples in projects of this nature contain inherent biases toward respondents who are more active and interested in the topic at hand. 4. Statements reported in the project case studies are those of the interviewees. The opinions expressed in the case study summaries do not necessarily reflect those of the report authors or TRB. 5. Chapter five suggests 27 safety management practices believed by the authors to be generally effective based on all project information sources. Not all of these methods would be useful or applicable to every motor carrier. They are presented as ideas for consideration, not as industry standards.