Insurance costs lead trucking firms to focus more on safety
Hit by a sharp increase in accident claims, Roadrunner Transportation Systems Inc. is stepping up its safety and risk-management efforts.
The rapidly growing Cudahy trucking and logistics firm has hired an industry veteran to fill a newly created position — vice president of safety, with authority over the company's various safety directors.
And Roadrunner soon will add another new executive to oversee risk management and help the firm reduce the amounts it pays after accidents.
The actions come as Roadrunner's costs for insurance and claims jumped by $8.1 million last year, to more than $20 million.
That's a small slice of the company's 2013 revenue — at $1.36 billion, Roadrunner has become one of the country's 25 largest trucking firms.
But the added costs came right off the bottom line, knocking 13 cents off the company's earnings per share, a decrease of about 9%.
With 3,500 trucks on the road, accidents are inevitable, President and CEO Mark DiBlasi said. But Roadrunner's crash rate of 0.43 accidents per million miles driven is well under the industry average of 0.76, he told analysts on a conference call Feb. 5.
Still, he said, the entire trucking industry has seen damage awards and settlement amounts rise — an observation confirmed by Thomas Bray, a motor carrier safety specialist with J.J. Keller & Associates Inc., a Neenah company that helps clients comply with federal regulations.