Safety-first mindset makes good business sense

Safety is unconditional at McColl's Transport, where a new safety-first mindset has dramatically reduced time lost to injuries from vehicle accidents, WorkCover claims and insurance premiums, demonstrating that investing in safety makes good business sense, as this 2013 case study shows.

McColl’s Transport is a major Australian independent milk, chemical and dangerous goods transport carrier. The company’s fleet comprises 185 prime movers and 500 tankers of various configurations.

In 2005, McColl’s was sold to a private equity firm, causing a tumultuous period which included significant management turnover. There was a subsequent decline in safety and financial performance in the two years post-sale.

Paperwork and monitoring was disorganised and governance non-existent. No-one really understood how poor the company’s safety practices had become until new management examined the history. They discovered over the previous 12 months a lacklustre performance and an unenviable safety record: 140 traffic accidents and two serious incidents, meaning that the company needed a culture change. Significant issues existed around fatigue management, integrity of drug and alcohol testing, lack of driver diary audits and that crashes and rollovers were occurring at an alarming rate. Additionally, issues were not being reported up the line, resulting in a lack of transparency.

Changing the mindset

In 2009, the new management team, including the CEO and national safety and compliance manager, decided that serious action needed to be taken. Incoming Chain of Responsibility (CoR) legislation was a significant enabler for change.

Several initiatives were implemented under the program:

• Drug testing: a zero tolerance approach was taken on drug and alcohol use. The random testing drug regime was significantly enhanced, acting on a ‘tip-off’ basis (in that suspicions can be anonymously reported). Under the previous program, small numbers of tests were conducted and those who tested positive were sent home to ‘cool off’, then able to return to their next shift. The company transitioned to monthly testing, changed the Enterprise Bargaining Agreement (EBA) and gained the full support of the Transport Workers Union (TWU).
• Risk management reporting: A regular reporting procedure was introduced, with a ‘preventative’ risk management focus. A daily seven-minute call was incorporated to monitor the regime for the day and safety numbers became the first agenda item for the weekly management meetings. Compliance documentation was monitored, including shifts not driven. Compliance breaches are now extensively examined and checks carried out on log books, tollways, GPS records, pick-ups and drop-offs to ensure that figures correlate.
• Work diaries: Stringent guidelines were put in place and enforced, encompassing work diaries for all drivers, not just line-haul drivers.
• Fatigue: A program of implementation and enforcement around fatigue management and shift scheduling was introduced.
• Simulator training: A vehicle simulator was purchased as a driver training tool, allowing drivers to practise manoeuvring through different ‘real-world’ environments without being on the road. The simulator replicates difficult situations, including a steering tyre blowout or brake failure. Drivers must spend at least eight hours per year training on the truck-mounted simulator, which regularly moves from city to city. An investment in safety infrastructure, the simulator translates to a better outcome on the road.
• Rollover awareness: McColl’s collaborated with VicRoads on a vehicle rollover awareness video, which is a central part of training and induction for new drivers.
• McColl’s Co-Pilot: The company invested in an integrated GPS-based solution that manages vehicles around Australia in real time to improve fleet safety and productivity.
• Delivery times: There is no pressure on drivers to meet delivery windows. Support mechanisms have been implemented that allow management of fatigue, while still delivering on customers’ requirements and expectations.
• Record keeping: Records are kept around employee training completion.
• Targeted training: Relevant training is delivered for specific skill sets. For instance, milk tankers are more prone to instability and rollover, whereas chemical tankers require specialised knowledge of Dangerous Goods Codes for safe transport and handling. A training program that addresses these varying issues has been introduced, ensuring drivers are informed.
• Competitive wages: Drivers are paid in the top 25% in the industry to attract/retain the best people and reward their professionalism. McColl’s is then able to charge customers a premium because they know the company will comply with CoR.
• Targeted compliance: Stopline is a targeted compliance system allowing anyone, including members of the public, to raise concerns or provide tip-offs to a third party. This party then works with McColl’s’ management to investigate and determine breaches via targeted drug testing and other investigative methods.
• Coordinated approach: Business and operational processes are interlinked.

Chain of responsibility

In addition to internal measures such as fatigue management, work diaries and shift scheduling for drivers, McColl’s also has an external focus on CoR that includes providing education to existing and potential clients regarding their responsibilities under the legislation. Principles are adopted in such a way that the needs of shareholders, clients and employees are balanced.

Management and financial leadership

The safety mindset has been driven from the top down and underpinned by mutual respect for all staff. This is based on an environment of sharing information, which enables issue identification and resolution. On the surface, McColl’s’ overheads appear higher because it has safety infrastructure in place that enables compliance with the law and the safe and efficient delivery of goods. However, savings made in other areas contribute significantly to the company’s overall financial outcomes.

Reaping the rewards

The McColl’s example illustrates that safety is worth investing in. Spending money on safety pays off in the long run, as demonstrated by the cost savings in areas such as reduced time lost to accidents, fewer WorkCover claims and lower insurance premiums. These outcomes are persuasive in demonstrating to company CFOs that investing in safety just makes good business sense.

Anecdotal evidence also suggests that drivers are attracted to working for companies that put safety first and where they are not pushed to achieve unrealistic deadlines or work under hazardous conditions. This suggests that by adopting a safety mindset, an employer can also become an ‘employer of choice’ and attract the best people.

With the advent of CoR legislation, especially in the heavy vehicle industry, McColl’s has led the way, aiming for consistency, safety and compliance rather than simply focusing on being the ‘fastest’ or ‘cheapest’.

Image credit: ©iStockphoto.com/Ken Tannenbaum