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Growing Pains: The Risk for Transportation Companies in an Upswing

FRANK BLAU
Account Executive at HNI

With economic conditions improving in many sectors and geographies, businesses and consumers are purchasing and consuming more goods and services. Manufacturers and distributors of products - from building materials, to consumer goods, and everything in between - are ramping up production of goods and materials that need to be delivered.

This growth trend is placing more demand on the transportation industry to move the freight. This is great news for trucking companies.

Increased demand for transportation services means more revenue, profits, and jobs for truckers. TheyNo_Pain_No_Gain can hire more employees and grow their companies. They can acquire other companies. 

With more growth comes economies of scale, higher rates, higher wages, higher net worth and bigger bank accounts. Which fuels more growth. Lots of momentum. Upward spiral.

Everybody is happy! Everybody wins! Right? …Not so fast.

Where the growth starts pinching

Much of the trucking industry today is suffering with a shortage in the number of qualified drivers needed to meet current demand (much less growing demand).

For some, operations is under pressure to meet shipper demand.  The infrastructure and resources required to support the operations team (such as hiring, maintenance, training and safety) are being strained.

This lean state is often the case even before a growth in customer demand. Overlaying the growth environment just exacerbates the situation for some.

Unfortunately, this condition can (and for many has) resulted in a different kind of spiral…a death spiral.

What’s sacrificed when resources are tight

We see in many growing companies a situation when the infrastructure can’t always keep up with the growth.

In some cases, it is a conscious effort to hold the line on costs and present overstaffing.

In others, operations and management may not even be aware of the gap until it’s too late. The excitement and success of the growth masks the need for even more focus and attention on executing risk management fundamentals consistently.

Intentionally or unintentionally, corners are cut. The PM is put off. That one extra load is hauled. Drivers’ hours are extended. The near misses are ignored or rationalized. The safety culture is compromised. The risk management edge is lost.

And that’s when deadly crashes occur.

How those that make it manage growth

The good news is trucking companies can counteract and even prevent this scenario entirely.  We see the most successful companies consistently displaying these 5 characteristics:

1. Top Down Values

Company leadership is outspoken about safety being the core value around which everything revolves and everyone operates. Decision-making and actions reflect the value of safety all the time, 24/7/365.

2. Bottom Up Ownership 

The company sends the message that everyone owns risk, and that everyone is a risk manager. Everyone is not only expected to act safely, but also to call out any unsafe action by any other team member or any unsafe condition they observe. 

3. Zero Tolerance Culture 

Policies and procedures clearly spell out and reinforce the core safety value. Adherence by all is required, and exceptions are not tolerated.

4. Programed Risk Awareness 

Year-round risk management messaging and processes are in place to keep safety at the forefront. Timing of content is based on analytics around when and what kind of unsafe behavior has historically occurred.

5. Prevention Over Profit 

When in doubt, the load does not move. No amount of profit can make up for the potential financial, physical and emotional loss of a life. 

Scaling a safe and profitable organization

Trucking involves inherent risks that cannot be totally avoided. That alone makes it that much more important to make decisions and follow behavior as if a life depends on it – because it does. 

Priorities change, but values don’t.  If safety is truly a value, keeping it at the forefront while in a growth environment cannot be subject to compromise.

 

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Topics: Transportation Safety / Compliance