Using technology to transform safety from a cost center to a cost saver
Netradyne customer SDS Recycling offers a $25 gift card each week for the driver with the highest GreenZone score – a system on the Driveri platform that captures and analyzes driver behavior like speed and following distance, among other things.
It’s an incentive that has driven better safety for its fleet.
Netradyne’s scoring system is based on “science of change,” and one of the its principles is positive reinforcement. A study at a New York State hospital where the goal was to increase the frequency at which medical staff washed their hands before entering patient rooms found that staff knowing they were being recorded by cameras was not enough to change behavior. With the addition of an electronic board in the hallway of the unit that gave employees a positive message and displayed the shift’s current hand hygiene score, compliance rates reached 90% within four weeks.
Austin Schmidt, director of performance marketing at Netradyne, said that’s operant conditioning where people are wired to adjust their behavior, often even subconsciously, to obtain the outcomes we want.
That’s one key factor in transforming safety from a cost center to a cost saver, Schmidt said during a recent Truckload Carriers Association webinar.
“I really love this quote from Charlie Munger, a Warren Buffett business partner, that explains operant conditioning: ‘Show me the incentives, and I'll show you the outcome,’” Schmidt said. “Cameras or most other technologies on their own will not automatically reduce your operational costs. But the good news is that leveraging two key principles of the science of change within your organization will.”
The other principle is instant feedback. A study called Timing Matters: The Impact of Immediate and Delayed Feedback on Artificial Language Learning assessed the impact of immediate versus delayed feedback on learning a second language and found that even a two- to three-second delay reduced a student's ability to learn from their mistakes by 21%.
Those studies illustrate that simply adding a driver-facing camera won’t change behavior; drivers need to be incentivized. They also show the importance of instant feedback because delaying feedback by waiting until a monthly or quarterly safety meeting reduces a driver’s ability to correct their mistakes.
But there are cost-saving opportunities and solutions, Schmidt said, which are becoming increasingly important with the rise of operational costs and the fall of freight rates, creating an unsustainable economic environment for fleets.
“Our environment is requiring all of our businesses to rethink parts of it at this point. There's a quote from Charles Darwin, who's best known for his work in the theory of evolution, that says ‘It is not the strongest of the species that survives nor the most intelligent; it is the one most adaptable to change,’” he said. “So in this environment, what if you could coach more drivers more often without needing additional hires or get your drivers obsessed with saving fuel, driving safely and preventing violations or keep your best drivers longer to reduce those recruiting costs and control your insurance costs to have lower increases than your competitors?”
The first cost saving opportunity is fuel
Aggressive driving behavior, characterized by speeding, rapid acceleration and braking, can lower fuel economy by 15% to 30%, according to the U.S. Department of Energy. And according to the North American Council for Freight Efficiency, fuel economy is reduced by one-tenth of a mile per gallon for every mile per hour over 60.
Schmidt said real-time coaching can help improve fuel economy. It is crucial, he said, to provide live alerts so drivers can understand the issue and correct it before burning more fuel or receiving a ticket. To follow up, he said provide live feedback with positive reinforcement when the behavior is corrected in the future and give drivers insight into how they’re performing against their own aggressive driving reduction goals to incentivize that mindset shift.
CSA scores and accidents are next
Cost savings opportunity No. 2 is moving violations, which impact CSA scores.
CSA scores, while difficult to calculate profitability impact, can be meaningful, Schmidt said. For example, poor CSA scores can reduce access to the best-paying loads in competitive freight markets, increase insurance premiums and increase audit risk.
The third area of cost savings is accidents and litigation.
According to the American Transportation Research Institute, the average verdict or settlement costs a fleet $367,757. And since 2009, injury accidents per mile have been on the rise. Schmidt said that correlates with the use of smartphone adoption.
“I'm suggesting that perhaps it's the drivers in passenger vehicles like all of us that are texting and driving or maybe TikTok and driving out there and making the road a more dangerous place. So despite the fact that you guys are doing the right things – investing in technology – the environment that your drivers are operating in is getting more dangerous, and unfortunately, some of that is outside of your control,” he said. “This is an example where the environment that we operate in has changed so our businesses must change as well.”
The solution, Schmidt said, is complete visibility with 360-degree camera vision around the vehicle that records and analyzes 100% of drive time in very high resolution.
“I can't tell you how many customers we've talked to over the years that did the right thing; they invested in technology; they got cameras in their trucks; they did everything they were supposed to do, but when a serious accident occurred, the camera missed the event because there wasn't a triggering event that captured the video,” Schmidt said. “So when they needed the camera, it did not come through for them … Your businesses don't stop; your risk doesn't stop; so why should your camera stop?”
He said fleets also need a proven culture of safety because attorneys will often go after the fleet safety record rather than the event itself, meaning quarterly safety meetings are no longer enough. He said the new standard is a proactive, weekly approach.
Keep the back office lean
To be able to invest in safety technology, Schmidt said fleets need to look at cost savings opportunity No. 4: running a lean back office.
A single additional safety hire can cost $90,000 to $130,000 annually, limiting the ability to invest in technology and even canceling out the operational cost decreases afforded by the technology. He said the answer is smarter coaching – both driver-led and manager-led.
Again, give drivers instant feedback on risky behavior and reinforce good behavior with incentives. But that’s not always enough, he said.
Schmidt said fleets should look for solutions that offer virtual coaching with a weekly video review of what a driver did right and wrong. And for the drivers that need additional help beyond driver-led coaching, he said managers can step in with in-person coaching, but remember to include positive feedback as well to reduce driver turnover.
Talent retention is cost savings opportunity No. 5.
A study conducted by the Upper Great Plains Transportation Institute estimates that the average cost to replace a driver is $8,234, and the cost of losing a great driver is incalculable, Schmidt said.
He said the positive reinforcement piece and monetary incentives are incredibly powerful, but drivers also need “smart incentives,” meaning an easy-to-understand method of tracking toward their goals. He said fleets should offer an app that gives drivers the ability to see and understand what they need to do to meet their goals and ultimately improve their paychecks and retention, which is how customers use Netradyne’s GreenZone scoring system that can gauge the risk and cost savings of a single driver, a whole fleet or an entire terminal team.
Schmidt said looking holistically at the entire terminal team is an important factor in retention.
“Let's say you are (having) drivers (focus) on speeding reductions, but your dispatch team on time deliveries, but your safety coaches on the pure volume of safety meetings they can have in a week. These different priorities can conflict in unexpected ways that sometimes can create a lot of friction and turnover,” he said. “In balancing safety and cost reduction opportunities, that retention piece needs to be there.”
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