Transcript Document

THE DRIVER HIRING GAMBLE
 Are
You
Addicted?
There is a job-seeking CDL
holder in front of you
 Can
you just
say “NO”?
Are You Hiring Your Problems?
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Why would you want
to change, if you are?
Who cares what I do?
Why do they care?
Every decision a trucking
executive makes – from who is
sitting behind the wheel to the
kind of equipment purchased can
have an impact on safety.
While most executives view
safety through insurance and
related costs, there are more
complicated cost factors that can
affect a carrier’s financial
performance.
Can create an unacceptable
financial burden for any company
An applicant
who lacks experience or has
a poor safety record may
cause thousands of dollars in
accident claims and
jeopardize the safety
reputation of your company
Cutting corners in the hiring
process can have serious
consequences.
“The best a person is ever going
to be is at the time they put in an
application.”
The cost of idle trucks—
measured in higher equipment
costs, lost revenue, etc. is offset
by…….
…the risk of having a major
accident that could result in
higher insurance premiums and
legal expenses.
Analysis of safety award winners
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Average operating ratio (expenses divided
by revenue was 0.63% better. 95.48% vs
96.11%
Insurance costs were 0.12 cent less per
mile. 7.5 cents vs. 7.62 cents.
( this was a 1999 survey by Transport
Topics)
Operating Ratio

Expenses vs.Revenue
 97%,
for example
$.97 cents of every $1.00

Goes to run company as it currently
operates
$.03 of every $1.00 covers
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Improved driver wages
New equipment
Unexpected expenses, such as accidents
Fuel price increases
Costs of new regulations
At our example 97% operating
ratio
 How
much additional revenue
must be created to cover a $1000
accident (or any other
unexpected $1000 expense)?
Answer……
$33,333.00 in
additional revenue
Intangibles
Competitive Advantage
Intangibles
Company’s reputation and
employee moral
Driver Retention
Poor hiring decisions

Can further aggravate driver turnover
Poor Hiring Decisions result in
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Poor quality attracting more poor quality
Fewer referrals from present drivers
More time to do verifications
More drivers leave in less than 30 days
More time spent to do past employment
verifications for their next employer
Employee morale
work quality can be affected
Tracking down every reference
can be difficult and timeconsuming.
When you’re tracking the
information for a poor quality
driver, it’s hard to be proud of
your work—or of your boss who
made the decision to hire.
If you dump a driver, he’s
someone else’s driver tomorrow.
A driver with an unstable work
history may soon add your
company to a long list of previous
employers
Public Perception
Recent news article
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Overturned semi shut down I-65 for 3 hrs.
23 yr old driver
5 passengers were in the vehicle
3 passengers thrown from vehicle
2 two-month old babies and a 2-yr old
No seat belts were worn
Shipper Confidence
Drivers who have a history of
customer service complaints or
performance related problems
may jeopardize valuable
customer relationships.
Shippers enjoy safe and
dependable delivery of the goods
entrusted to us.
Workplace Violence

Are you asking the
right questions to
uncover possible
dangerous situations?
SafeStat
If you’re a small company one
out of control driver can haunt
you for at least 30 months
Indiana company with 4 drivers
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8-19-99, one driver received
Use or possession of alcohol
OOS No or invalid driver’s license
OOS Tire depth less than 2/32
Audits
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More time allotted to complete
Higher fines
Unsatisfactory = Unsafe
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Late 2000 ruling
60 days to improve
Insurance
Insurability and cost of premium
Insurance and claims costs
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2% to 3% of revenue is considered very
good by industry analysts
“normal” is 4% to 6% according to 1999
information from Great West Casualty
(including out of pocket expenses and
reserves)
Factors that influence insurability
and/or cost of insurance
Failure to establish written
qualification standards for
selection of mature and
experienced drivers.
Failure to follow driver
qualification standards, policies
and procedures, including
FMCSR Part 391.
Permitting unqualified drivers to
drive.
The motor carrier as well as the
examining physician can be held
liable for damages that occur if a
driver is erroneously found
qualified to drive and has an
accident.
True story:
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File completed in TX faxed to IN for review
File completed on Friday
Driver assigned truck on Friday
Accident on Saturday, left turn over the top
of an occupied Lincoln
Driver left the scene
Driver tested positive for alcohol after
accident
True story (continued)
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TX MVR didn’t divulge prior drug/alcohol
related problems during teenage years.
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IN review of long form physical indicated
driver should not have even been hired.
Vision in one eye was 20/50.
Permitting falsification of logs
Failure to review drivers daily logs
and verify for accuracy
Failure to establish and follow a
policy of progressive disciplinary
action
Requiring a driver to transport a
shipment when time or distance
would make it unlawful under the
“Hours of Service” regulations.
Permitting or requiring
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Drivers to operate in
excess of posted
speed limits
Just saying “no” extends beyond
driver hiring………..
Loss of Assets
Accident Costs
Monetary costs of Accidents
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Injuries to drivers
Injuries to other
parties
Damage to
tractor/trailer
Damage to other
vehicles or objects
Damage to cargo
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Wrecker fees
Environmental clean
up
Insurance deductibles
Administration time
Attorney fees
Punitive damages
Costs in addition to monetary
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Quality of life for
driver
Quality of life for other
drivers involved
Relationships with
shippers
Increased DOT audits
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Perception of the
public
Insurance is harder to
get
Your self-confidence
Your driver has been involved in a
serious accident…..
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This is usually when a trucking company
realizes they simply didn’t do enough to
implement important safety policies and
procedures
Once an accident has occurred,
 You
are out of
time and luck.
Legal Expenses
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Negligent Hiring
Negligent Entrustment
Negligent Retention
Punitive Damages
Cost of Defense
Negligent Hiring
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There is an accident…what if your driver
should never have been hired to drive
commercially in the first place?
What if they uncover a history of serious
traffic violations?
Negligent Hiring
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Hard to defend a driver with a history of
recklessness even if he wasn’t at fault in a
particular accident.
Negligent Entrustment
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Places the responsibility for driver error,
recklessness, and incompetence on the
motor carrier employer and fleet manager
Negligent Entrustment
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Hiring a driver without conducting past
employment inquiries
Using a driver whose license or physical
has expired
Using a driver with a poor motor vehicle
abstract
Forcing a driver to drive without available
hours
Punitive Damages
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A business can’t be sentenced to death
A hard hit in the pocketbook can make
reprehensible decisions that seemed at
first glance profitable, ultimately very
costly.
When you have to face the judge
and jury will you be able to show
you are serious about your safety
responsibilities or will you appear
irresponsible and negligent in
your duty to protect public safety?
Trucking industry is highly
regulated
 Determining
negligence is a
simple task.
If a newly hired driver with a
history of moving violations is
involved in a speed-related crash,
can you justify your hiring
decision?
If one of your drivers is involved in
a fatal accident, will the plaintiff’s
attorney uncover information
about your driver that you should
have known?
Once an accident happens, it will
be too late to correct deficiencies
or to talk about what you “planned
to do”.
The jury’s perception of your
company will be based on what
you failed to do before the
accident.
A recent study by “Jury Verdict
Inc.

Plaintiffs are awarded
damages about 53%
of the time…….
….when a trucking company is
involved,
 The
plaintiffs
win at the rate
of 80%
Saying “no” carries it’s own set of
liability issues
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Your decision cannot be discriminatory
Your decision cannot be influenced by
prior work related injuries.
Equal Employment Opportunity Act
Fair Credit Reporting Act
Americans with Disabilities Act
Consult your attorney for
further advice.
Put your policies and procedures
in writing and then follow them.
ROAD TO RECOVERY
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Commit to safety
Do the Right Thing
Select the Right
People
Train and retrain
Let them know what
is expected
Communicate safety
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Recognize and
reward safety
Get drivers involved
Get families involved
Evaluate
Measure
Set higher goals for
continued
improvement