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COMPARING CARROTS

Since trucks hit our roads slightly more than a century ago, governments have had to choose between two philosophically opposite methods of ensuring they were being operated safely - to entice truck o...


Since trucks hit our roads slightly more than a century ago, governments have had to choose between two philosophically opposite methods of ensuring they were being operated safely – to entice truck owners with a carrot or threaten them with a stick. Until recently governments have proved much fonder of threats than enticements.

But over the past decade premier carrier programs have slowly squeezed their way into acceptance in motor carrier compliance offices across the country as alternatives to our predominantly penalty-driven system of enforcement. Premier carrier programs, such as Partners in Action (PIC) run by Alberta and Oregon’s Green Light and Trusted Partner, distinguish carriers that obey safety regulations and have above-average on-road safety performance. In addition to being recognized with a distinctive label, participating carriers are supposed to receive benefits that make the effort and money spent on achieving the nation’s best safety records a worthwhile investment.

Although Alberta and Oregon are the only two jurisdictions to get real programs off the ground, the support for this alternative is growing. British Columbia hired a person in May to develop its own program, Quebec is in discussions with its carriers, the Northwest Territories plans to join PIC some day and Ontario has gone part way with an “excellent” category in its rating system. There is also a push to create a nationally harmonious incentives system. South of the border, in addition to Oregon’s programs, there are two scale bypass systems – NorPass with seven participating states and PrePass with 16 participating states – that, because there is a screening of carriers for eligibility, have minor characteristics of a premier-carrier program.

The thinking behind premier-carrier programs is straightforward: if safety ratings work by targeting unsafe carriers and forcing them to shape up, then the opposite – recognizing and compensating the safest carriers with appropriate “carrots” should also provide an incentive for the industry to raise its safety standards.

That’s the theory; the reality, unfortunately, can be much different. Fundamental philosophical differences about what kind of rewards government should be offering combined with apparent private sector indifference about the value of safety may be leaving our country’s safest carriers starving on a decidedly meagre diet of “carrots”.

Alberta’s much-publicized PIC program is a case in point. Launched as a pilot project in 1995 when the Alberta Trucking Association and Alberta Transportation and Utilities (now Alberta Infrastructure) signed an agreement, it’s now looking to grow by adding 100 carriers over the next three years. Yet questions are surfacing about the real benefit of being a PIC carrier.

The program, run by a board of directors made up of equal representation from government and industry, employs a complex system involving elaborate screening procedures to join, including a government audit. There is a written contract between the carrier and the enforcement agency, as well as a series of benchmarks to be met and onerous reporting requirements. The 26 carriers currently enrolled in PIC have to fill in monthly reports showing how they did in comparison to those benchmarks.

There’s no question about what the program has been able to achieve on the safety side. (See the 1999 PIC Carrier Performance chart on page 37.)

“A lot of operators have told me ‘my fleet could be in PIC’ but when they actually get down to the measuring and verifying they find they’re not at that level (of safety performance). It’s a stretch and they have to work to get there,” says Alberta Infrastructure’s Roger Clarke, who chaired the development of PIC and sits on its board of directors. “Is PIC raising the bar on safety? Absolutely.”

What is being questioned, however, is what PIC members are actually getting in return for their exemplary safety performance.

Trucks with PIC plates do get expedited treatment at inspection stations. And PIC carriers have fewer audits (no IRP or IFTA) than non-PIC carriers and fewer insurance or inspection forms to file. Also, the Canadian Chemical Producers Association recently granted the PIC program equivalency status with its own Motor Carrier Evaluation Program. This saves participating PIC carriers the burden of another audit. But considering the administrative effort required to join and stay in the program – Calgary-based Canadian Freightways found that its employees were spending a total of 25 hours a week administering PIC when the company first joined – many participating carriers believe these rewards are hardly enough.

“PIC is valuable as a management tool to assist carriers in complying with the National Safety Code at a very high level. Its reporting requirements and its benchmarks serve carriers very well and the participating carriers strongly support it…But if it wasn’t for the fact it is an excellent management tool, the wheels would have come off this wagon long ago,” acknowledges Al Smythe, head of the Alberta Trucking Association. “The participating carriers are very adamant that the program is not providing the anticipated benefits that were envisioned at the start of the program. There is no question that there has been a significant failure on the part of the province to buy into the benefits side of things.”

Smythe adds that the lack of tangible benefits has become a deterrent to attracting more carriers to join PIC. He says carriers would like to see benefits such as reduced vehicle registration fees included in the program.

But that’s a path the Alberta government is distinctly reluctant to tread.

“It’s a show stopper,” acknowledges Clarke, Alberta Infrastructure’s executive director of vehicle safety and carrier services. “Every time it’s raised it’s immediately shot down. Government will not be giving out money for being a safe operator. If it did we would have a lineup around the legislative building of other groups that want exactly the same thing. It’s a slippery slope and you just don’t go there. But that doesn’t mean other types of benefits can’t be offered.”

He adds that government and industry haven’t been as creative as they could be in coming up with “meaningful” benefits that don’t involve the government handing money over, pointing to online plate registration as a good example. The government will in fact be working with the Alberta Trucking Association over the summer to come up with such ideas.

While the issue over the Alberta government’s handling of PIC is centred on a fundamental philosophical difference, the reaction of shippers and the insurance industry to the program appears to be rooted in apathy. Smythe says that’s partly because the program’s organizers haven’t done an aggressive enough job of communicating to the private sector the benefits of dealing with carriers sustaining such high safety standards. But in the end, the reality is price, not safety, is the major determining factor when shippers are selecting a trucking company.

“One shipper told me straight out if we limit ourselves to using only PIC carriers we may not get the lowest rate. (Price) is all they care about,” Smythe said.

Nor have insurance companies been quick to offer PIC carriers rate discounts even though it can easily be argued that the country’s safest carriers pose much lower liability risks.

David Bradley, head of the Ontario Trucking Association and CEO of the Canadian Trucking Alliance, says private sector apathy towards premier carrier programs is hardly surprising.

“It’s naive to suggest that insurance companies are going to use this type of thing in setting their rates. Indeed, the insurance companies were not involved in the development of such safety rating systems from the get go. The insurance sector operates in a market place like anyone else and as the insurance market becomes tighter, premiums go up and when there is significant capacity prices go down, regardless of what a carrier’s (safety rating) might be,” Bradley says. “Equally naive is the view that shippers w
ould voluntarily come to the table and pay for safety. What I’m hoping is that if we do one day get a national safety rating system the liability a shipper faces in using a carrier with a less-than-satisfactory safety rating might be enough to be able to create an environment where there actually is a bottom line return on safety.”

Oregon has shown that there is clearly a different way of building a premier-carrier program. Its Green Light and Trusted Partner programs are much simpler in comparison to PIC’s elaborate screening procedures and onerous reporting requirements. Any carrier can apply to join Green Light and have transponders mounted in its trucks. These identify the truck to an inspection station down the highway, triggering an immediate snapshot of the carrier on the computer screen along with the axle weights of the truck as measured by a weigh-in-motion scale embedded in the pavement of the highway. If everything looks good, the truck is sent a signal – green light on the transponder – and the driver keeps on trucking, right past the inspection station.

To join Green Light, a carrier has to have no overdue tax bills, no unsatisfactory safety fitness rating from the U.S. Department of Transportation, and no SafeStat score of 150 or higher. SafeStat is a number that measures how safe a motor carrier is. The calculation takes into account continuously changing information on roadside inspections (out-of-service defects), collisions, driver convictions and management safety procedures. A score of 150 or higher puts a motor carrier into the area where it may be subject to a special monitoring program.

The second part of Oregon’s premier-carrier program, which started two years ago, provides the best carriers with “Trusted Partner Carrier” plates. The first requirement to be a Trusted Partner is that the carrier is already in Green Light. If so, and if its history of paying taxes on time and staying out of trouble look good, it is given the special plates identifying its trucks as Trusted Partners. Among other things, staying out of trouble means having an out-of-service rate for both drivers and vehicles lower than the U.S. national average.

The benefits of being a Trusted Partner (currently 454 carriers hold that status, three of them Canadian) include the bypass privileges of the Green Light program plus being exempt from random roadside inspections. There are over 12,000 trucks in the two programs and, in the first two months of this year there were 63,085 instances where trucks bypassed the 15 Oregon inspection stations that have Green Light equipment installed.

Yet Oregon ran up against the same brick wall when it tried to offer its members financial rewards on top of the usual operational incentives. An attempt to introduce legislation that would have given Trusted Partners tax breaks failed.

Meanwhile, Ontario has experimented with premier carrier programs and has recently introduced one major element – screening criteria to identify good carriers. When Ontario introduced AVION, an inspection-station bypass technology, in 1995, only carriers with a good record were eligible for the necessary transponders. But AVION never got past the demonstration stage (officially, a decision on the final fate of AVION has yet to be made, although the Ontario Trucking Association believes the program is dead). In 1999 Ontario launched its new safety-rating program with an extra rating category of “Excellent.” This was a recommendation of Target 97, a joint government-industry report on how to reform Ontario’s safety regulations. But, while Target 97 recommended a premier carrier designation, it also recommended carriers meeting the criteria be rewarded with privileges or incentives such as the right to bypass inspection stations or the right to obtain permits to operate long trucks (LCVs). That hasn’t happened yet. Ontario is waiting for the development of a national agenda before proceeding.

Which brings us to the next knock on the current premier carrier programs – they are stand-alone efforts. PIC carriers, for example, are not necessarily recognized as excellent carriers by other provinces, although the Alberta Trucking Association’s Smythe is hopeful that a reciprocity agreement can be struck with British Columbia when that province gets its premier carrier program underway.

“Do we want that kind of (stand-alone) program to predominate across the country or, since we’re going through all the effort to put a national safety ratings system in place, do we want it to be tied to that?” asks Graham Cooper, who was making a presentation on carrier incentive programs to the Canadian Conference of Motor Transport Administrators (CCMTA) just as Motortruck was going to press. “I think the answer is clear that we would like a national incentives program in place that is an extension of a national safety ratings program. What it would mean is one additional rating above satisfactory, an excellent rating. That to us would make a lot of sense rather than trying to run these things on a stand-alone basis.”

Cooper adds that if carrier incentives were not uniform across the country, it would create a situation where carriers had the incentive to attain an excellent safety rating in one province and no incentive to do it in another. He says creating such a nationally uniform incentives system is not unrealistic. If the provinces can get to the stage where they can agree on a nationally harmonized safety ratings system it shouldn’t take much more effort to devise a nationally consistent incentives program to go with it. But he acknowledges the toughest part will be getting governments to agree to spend the money to make such an incentives program meaningful.

“There is a lot discussion still, a lot of work that needs to be done. But our view is that it doesn’t look particularly promising at this point that governments are really prepared to offer meaningful incentives to carriers to get their ratings to the level governments would like them to be at,” Cooper says. “That’s the bottom line and that’s the message I’m carrying to the CCMTA.”

Which means Canada’s safest carriers will likely continue to starve on a meagre diet of “carrots” served up by governments staunchly opposed to making a financial commitment to premier carrier programs and a private sector that puts price ahead of safety.


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