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The payback on driver training

KING CITY, Ont. -- It's a constant source of frustration for Rick Geller, director of safety and signature services with Markel Insurance. Carrier executives often tell him they're reluctant to invest in driver training programs for fear the...

KING CITY, Ont. — It’s a constant source of frustration for Rick Geller, director of safety and signature services with Markel Insurance. Carrier executives often tell him they’re reluctant to invest in driver training programs for fear the driver will move on to another company only to have them benefit from the initial training investment. Geller’s response is always the same: “Ask yourself what happens if you don’t put that training into them and they stay? That’s when they’re going to hurt you.”

Geller was presenting at the recent Private Motor Truck Council of Canada’s annual convention on the value of driver training. Too often, he said, training programs are perceived as an expense when they should really be measured by how much value they bring to the company in the form of reduced accidents, lower insurance premiums and improved bottom line.

“Let’s look at training as a capital investment rather than an expense,” he implored delegates before providing some pretty convincing evidence on the value of driver training.

Calculating the potential return on investment for a driver training program begins with fully understanding how much accidents are truly costing your business, Geller said.

“I can’t urge you strongly enough to make sure you are capturing all the costs associated with crashes,” he said. “It’s very important to collect that data and make sure that the cost doesn’t get hidden in a maintenance budget.”

Even the costs of repairing small dings and scratches should be included in the calculations, Geller pointed out.

In addition to the obvious direct costs – such as towing, equipment and cargo damage, medical bills and payment to injured workers – there’s also an assortment of indirect costs, which often get overlooked. Indirect costs can include loss of productivity, the cost of training replacement workers, reputational costs and rising insurance premiums.

Geller suggested one way to get a bean-counter’s attention is to highlight the true costs of accidents and other mishaps that could be prevented through proper training. With the trucking industry’s notoriously low profit margins, an accident that incurs $10,000 in hard costs along with $11,000 in indirect costs would ultimately cost a carrier $21,000. While that may seem manageable, Geller point out with profit margins of 3%, a trucking company would have to bring in about $700,000 in revenue to pay for that one accident.

Put another way, Geller draws comparisons to the well-publicized Tax-Free Day, after which a typical Canadian has paid his or her share of taxes to the government and can begin earning money for themselves, usually occurring in late spring.

“I asked the executive of a large carrier in Atlantic Canada, ‘If you think of the revenue you have to generate to pay for the crashes that are going to happen in the next 12 months based on your historical performance, when do you think your Tax-Free Day is?’ I suggested to him that he circle May 26 on his calendar, because up to and including May 25 they didn’t have a prayer of making a penny, it was all going to covering crashes.”

If that doesn’t get a CEO’s attention, nothing will. But Geller warned it’s not a good idea to start rolling out a training initiative without first knowing what problem areas to address. He recalled working with a carrier that was eager to launch a training program to address rollovers.

“When we ran the numbers, about 60% of their losses were actually sideswipe and a few rear-end collisions,” Geller said. “When we really dug deep into the numbers, almost 50% of their sideswipe and rear-end collisions happened within two miles of their Mississauga terminal because they had a first-in, first-out dispatch system. The first one in got the best load and they had road races going into their terminal.”

In that instance, simply changing dispatch methods was enough to significantly lower crash costs.

Before starting a training program, Geller suggested researching historical crash data to determine what is driving crash-related losses. He also warned that not all drivers learn the same way, so a mix of in-class, simulator, online and on-road training should be offered.

When a training program is developed or purchased off-the-shelf, the cost of the program should be compared to the actual or projected savings. Almost always, there will be a tangible return on investment, Geller said.

“Training is an investment, it’s not a cost,” he stressed. “Most companies today claim that their people are their greatest assets but when you look at the effort they put into developing this human capital, you can see it continues to be seen as an expense by most companies and not as a capital investment. It’s up to you to turn this around.”

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3 Comments » for The payback on driver training
  1. David Robson says:

    I agree with everything said in this article. As a driver myself training in safety and compliance I believe many companies are too busy trying to increase revenue through load quantity to review their safety records, find a common cause and take the effort to correct it.

    Not one company I have driven for has had a driver review policy. If I had questions it was responded with,” Ask a senior driver ” When I bring up safety or regulation issues they seem to go unheard because I’ve experienced no change in the issue.

    I personally feel their is not enough on-going practical training. How many drivers can without hesitation complete proficiently Part 1 of the Schedule 1? Yet air brake violations are in the top 10 chronic violations.

    I believe every driver knows the H.O.S., I think many of them don’t know how to apply it to be compliant. Drivers require practical interpretations of the regulations to implement them properly. The same goes for pre-trip.
    This type of training is not given by many companies. I believe the implementation of driver trainers separate from safety personnel would benefit companies ten fold.

    Oh well! All we can do is hope and pray things will turn around to make this industry comparable to the skilled trades industry. Without drivers can a trucking company continue to operate?

  2. Ron Delorme says:

    My name is Ron Delorme and I presently live in Arnprior Ontario.The reason I’m writing you today is of great importance to the future of the trucking industrustry.I have been driving trucks since 1974.In the bad old days as I call them,log books were pretty well non existent,some large companies ran tach cards,while others did what they could to get the load there on time.I’m still driving today,in the summer I drive for a large construction company and my winter months are driving the lower forty eight for a company from south mountain.Anyways back to the reason I’m sending you this correspondence.My son has recently graduated from a local truck driving school.He has completed all the in class and out of class requirements to get his AZ drivers license.He did get placement from the school and started work after graduating.Unfortunately thing did not go so well his first day on the job.The independent that hired him did not sigh him up but wanted to try him as a driver to see if he would work out to hire on full time.There was his first setback.Next although he did complete his training and pass with flying colors he should of had some on the job training before being sent out blind and not knowing what to expect in the business.I understand independents cannot always bear the cost of having to send someone out with a new driver,but here lies the problem.These new drivers are expected to adhere to all the rules and regulations that now govern the trucking industry.They have spent several thousands of dollars and up to six weeks of time and training to start new carriers.They deserve better than being sent out to the wolves with no on the job training.I’m talking about four to six weeks of having a trainer in the seat next to you showing you the ropes.i.e.,driving under different road conditions,delivering at different loading docks.(one thing in passing,this particular school did no backing in to docks or backing into tight spaces),proper use of log books on the job and not in the classroom setting.Dealing with scales and Dot inspections etc.We would be better served by these training schools if they were more interested in there students than the all mighty dollar figure at the end.My son did not go back to that independent but is now driving locally doing city work.He has the support of his company and works with other delivery people during the day.His job included warehouse work such as lining up deliveries and doing those deliveries to different destinations.He gets his driving experience,invoicing,dealing with everyday traffic situations,and backing into new unloading areas.His situation could have been avoided if more thought would have been placed on what happens to these new drivers after they leave the school.With the shortage of drivers we have been facing and the complaints I hear at most truck stops about the influxes of foreign drivers on our road.Would it not be worth while putting more effort in producing better training,on the road as well as making these instructors accountable for producing qualified drivers,instead of filling there heads with tale of past trucking experiences.No names other than my own are mentioned because that is not the issue.I believe we should support these new drivers and put ourselves in there place and remember what it was like to get our first driving job.That’s all for now ,only thought I would give an opinion.Ron.

  3. Barry Woodbeck says:

    Re Letter by Ron Delorme

    I am a Driver Trainer for a transport driver training facilty in the far west of Ontario. I have been certified by Ontario Safety League (OSL) for all aspects of truck driver training including Air Brake endorsement and adjustment, Defensive Driving etc. Incidently, no training/certification is required to be a trainer, you only need an A license with the air indorsement. Anyone who holds a valid AZ can be an instructor, and for that matter can be a driver examiner with Drive Test, but that’s another story.
    To qualify as a private career college you need to pass some very stringent rules and pay a pile of money. Rules you must follow do not necessarily make you better at putting on a “good” course, they simply make sure all the t’s are crossed etc. which is pretty much par for government regulations. But, again, that’s another story. However, the cost for being in business for the small school is pretty much the same as for a larger school making it much more difficult to stay in business as a small business. As we all know, bigger is not always better and this is certainly true where driving schools are concerned.
    So now you have a driving school that must pay a goodly sum to be in business trying to make a competent, safe, knowledgable driver in a limited amount of time and still make enough money to stay in business. But there is an alternative. You can drop the private college stuff and save a lot of money and still teach students how to pass a road test. The way to do that is to simply teach what the student will need to know to pass on test day. Believe me when I say that it doesn’t take too long with some students. You don’t need to know how to do a very thorough pre-trip inspection, for example, you don’t even need to shut off the engine or open the hood. You need to know how to hook and unhook and how to back up, usually only a few feet and in a straight line. You need to know how to drive the truck on a 20 minute (Maximum) road test, usually the same route all the time so you can practice that ahead of time. Do you see what can happen here? If I want to make money and skip most of the rules, I can advertise that I can teach you how to get your A license (spelled pass your road test) for say 3 or 4 thousand instead of the 10 or more thousand that a private college charges.
    I understand that you can’t check everything on a road test and you can’t teach everything in a few weeks of driver training but there needs to be some checks and balances here. As long as we have a publicly owned company, whose business is to make money for their shareholders, doing road tests, things are not going to get better. At least that’s my opinion.


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