3. THE EFFECTS OF TRUCKING FIRM FINANCIAL PERFORMANCE ON DRIVER SAFETY

What is it about?

Changes in the economic conditions facing the trucking industry have raised concerns about driver safety (Belzer, 2000). Recent studies have examined the relationship between firm characteristics, operational characteristics, and human capital factors and crash involvement (Corsi et al., 1984; Chow et al., 1987; Bruning, 1989; Moses and Savage, 1992; Hunter and Magnum, 1995; Corsi et al., 2002). These studies, however, have tended to examine a limited set of variables and their correlation with safety outcomes, without accounting for the complexity of relationships that influence trucking firm, driver, and crash involvement. Specific attention should be devoted to motor carrier compensation strategies and motor carrier financial performance, and the impact of these factors on operations, driver selection and training, and carrier safety outcomes, in an age of unregulated competition.

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Why is it important?

This chapter uses trucking firm-level information to address the paucity of multivariate analysis accounting for the safety effect of various types of truck driver compensation and firm financial performance. Using negative binomial regression models, we find that small firms with high liquidity have better safety performance. Likewise, small firms that devote a higher share of their revenues to labor expenses tend to have better safety outcomes. Although the dataset is limited in many ways, these associations suggest that small firms may be particularly sensitive to the competitive nature of the truckload sector, relying on the human capital of drivers to overcome safety challenges due to their size.