TORONTO, Ont. - You've heard the horror stories. You may even have one of your own. Driver flips his rig during rush hour. Police call a tow company on your behalf. Tow company sends an astronomical b...
PLAN AHEAD: The best way to keep recovery costs in check is to negotiate rates and services ahead of time.
TORONTO, Ont. – You’ve heard the horror stories. You may even have one of your own. Driver flips his rig during rush hour. Police call a tow company on your behalf. Tow company sends an astronomical bill for services rendered.
As a result of these experiences, the trucking industry and towing/recovery providers have developed an adversarial relationship. Doug Nelson, executive director of the Ontario Recovery Group, is aiming to fix that relationship by educating carriers on how the towing industry operates and how trucking companies can contain their recovery costs.
One of the biggest reasons tow and clean-up bills may have appeared inflated in the past, was the simple fact that many invoices simply did not get paid, Nelson pointed out. He said about 10% of truck towing invoices and 30% of all tow calls went unpaid before a new legislation was introduced in Ontario which guaranteed payment. Nonpayment of invoices cost the industry millions of dollars each year and towing and recovery companies had to compensate for the losses by increasing their rates.
As of Sept. 1, the Ontario government guarantees payment of all towing and recovery bills. In the event of a truck accident, the carrier is responsible for payment under the new law, namely the Provincial Highway Incident Management Limited Financial Protection Program. If the carrier refuses to pay, the province will shell out the money and then come after the carrier, backed by its pack of lawyers. It will also slap a 15% late payment fee and a 5% administration fee onto the bill, pointed out Nelson.
However, he said that carriers that do pay their bills should welcome the new law.
“Eliminating the non-payment issue will help relieve pricing issues,” he said.
Nelson said there are also other factors that have helped drive up the costs of towing and recoveries. For one, those trucks that are used to tow a heavy-duty tractor run about $300,000-$700,000.
“The investments we’ve been forced into are enormous,” Nelson explained. And labour rates are also increasing due to a shortage of heavy-duty tow operators.
Nelson also said the total bill can quickly skyrocket due to more stringent environmental clean-up requirements. And there are also more parties with their hands out at an accident scene than in the past. As a case in point, he highlighted a bill that included: $1,500 for traffic control; $3,500 for the fire department; $5,500 for environmental clean-up; and finally $500 for towing.
“That chokes us up when we have to hand you a bill like that,” he admitted.
Recovery costs in the US are also on the rise, thanks in part to a Rapid Incident Scene Clearance (RISC) policy now in place in several states. States with RISC policies reward recovery companies for a quick response and require them to clear all traffic lanes within 90 minutes of the call. Doing so earns towing companies a $3,500 bonus, but if the wreck is still not cleared within three hours the tow company is fined $10 per minute.
“They will drag a tractor-trailer off the highway on its side” to earn that bonus, Nelson said. RISC is driven by the economic impact of road congestion.
Sgt. Cam Woolley of the OPP admitted that even here in Canada, there is growing pressure to get the accident scene cleared up as quickly as possible. He pointed out 18% of fatal accidents are “secondary accidents” that occur as a result of the initial accident and the back-ups it creates.
And “We can’t forget there’s an economic effect,” he added.
Ontario used to operate on a rotation system for heavy-duty tow companies whereby each towing company in the region would take its turn responding to calls.
“Depending on whose turn it was, clean-up would take two to three hours or 13-15 hours,” he recalled. Today, the OPP works with a handful of approved recovery companies and it will be happy to call one on your behalf if you don’t have an adequate recovery plan of your own in place, Woolley warned.
“We normally try to check with the carrier first to see if they have a plan,” he explained. “But if the driver is in the hospital and we don’t have a phone number, we may start to implement the clean-up.”
This can create friction because once the police call a towing and recovery company on your behalf, you are at the liberty of their pricing structure and under the new legislation have no choice but to pay the bill, whatever it should amount to.
Therefore, it’s more important than ever to develop a recovery plan and communicate it to drivers and dispatch, Woolley advised.
“A lot of drivers have half a million dollars worth of your equipment, but you haven’t told them what to do if they crash,” said Woolley. “Your representatives don’t always do a good job (at communicating) so we call dispatch and they don’t know either. Other companies do this very well – provided the crash happens between nine and five.”
Nelson said carriers should ask themselves the following question: Who responds to what, when, where and how?
“You must take control of your incident management plan,” he urged.
For starters, he suggested spec’ing trucks with the expectation they may eventually require a tow. He pointed out it could cost up to $400 to remove a bumper if there are no tow hooks available.
“Square receivers for tow hooks can save hundreds of dollars,” he said. Nelson also said it would be helpful to have an air connection available near the front bumper. He said the removal of the drive shaft and axle shaft should not be required and this is possible by discussing it with your component suppliers while spec’ing your trucks.
Wind fairings should be as durable as possible to withstand a tow and fuel tank bladders should be installed to reduce fuel losses during a wreck, suggested Nelson.
His biggest beef, however, has to do with the construction of today’s trailers.
“Semi-trailers are spilling their loads more than ever,” he said, and he complained that insurers don’t want recovery companies further damaging the freight. As a result, “We have to handle these loads,” Nelson said. His advice: “Purchase stronger trailers.”
Nelson said recovery companies want Transport Canada to develop more stringent crash worthiness standards for trailers.
Nelson said trucking companies should view their towing and recovery contractors as business partners and develop relationships with them before their services are required. This ensures fleets get prearranged rates.
“Ask for a copy of their rate sheet (in advance),” he suggested. “If they’re ashamed of their rate sheet, maybe there’s a problem there.”
All drivers should be provided with a road service contact list so they know who to call no matter where the accident takes place. A list of recommended towing and recovery companies throughout Ontario is available at www.ontariorecoverygroup.com. Similarly, the towing and recovery company should be provided with a contact list notifying them who to call within the trucking company when responding to an accident scene.
“Make them an extension of your company,” urged Nelson. “They can be your eyes and ears at an accident scene long before you arrive.”
Carriers should also pre-arrange credit so they’re not stuck scrambling to arrange financing after an accident has taken place, he suggested. And try to avoid “price-perpound” rates, which Nelson admitted are “predatory.”
“We want to end this adversarial relationship,” Nelson told fleet managers.