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National Freight suffers a cargo loss or damage rate of four-tenths of 1% in an industry where "anything under one-half of 1% is considered excellent," says John J. Carney, the vp-risk management of Vineland, N.J.-based National Freight Industries Inc., the holding company for National Freight and several sister companies.
Mr. Carney credits the company's emphasis on safety, with a boost from an innovative satellite communications system, for its enviable cargo record.
Mr. Carney noted a similarity between National Freight's cargo record with its improvement in workers compensation results.
Just like workers comp claims, the cargo claims are stemming from a different cause at National Freight now than they were when the company launched its risk management program. Most workers comp claims reflected accidents, as did most cargo claims, said Mr. Carney. If a truck carrying a load of cookies had an accident, "you end up with crumbs," he said.
"By reducing the accidents, we reduced that," noted Mr. Carney. Workers comp claims are now far more likely to stem from slips and falls as drivers climb in and out of their rigs than they are from accidents, he said.
But for cargo claims, the cause is more ominous.
"It's out and out theft. Billions of dollars of cargo freight are stolen each year. It's become a target of a number of organized groups," he said.
Some of the stolen cargo disappears into the domestic market and some goes overseas, noted Mr. Carney. And theft is proving quite profitable for the thieves.
"We've seen prices range almost up to full value," he said. "Before it was pennies on the dollar. It's not unusual now to see 50, 60, 75 cents on the dollar."
In addition to stealing the cargo, the thieves are stealing trucks now, too. Mr. Carney said that not too long ago, investigators almost always recovered a stolen truck within days, and certainly within a few weeks.
"Now, they're gone," sometimes literally, he said.
The "truth of the matter is, parts of trucks are worth more than the whole truck is."
National Freight has fought back with a variety of weapons, including very aggressive security. It has installed video camera surveillance in some facilities, and security personnel in others, said Mr. Carney. On some occasions, hand-picked drivers will be designated to carry specific loads for security reasons.
The company also has promulgated a standard operating procedure for high value loads. That SOP tells a driver exactly what he has to do, he said.
In addition, National Freight is an online member of a trucking industry-supported central repository providing information about stolen cargo both domestically and internationally, he said.
To make it harder for thieves and hijackers to make off with National Freight property, the company has made arrangements with its truck manufacturer to give National Freight the ability to electronically disable every truck.
National Freight's newest weapon is a state-of-the-art satellite communications system known as QUALCOMM that allows National Freight to be in contact with its truck at all times. The two-way communications system operates 24 hours a day, seven days a week, Mr. Carney said.
"I'll tell you how serious we are about this. In order to maximize the use of the satellite communications, you have to have it in all of your trucks. If you're only buying satellite communications to know where your trucks are, it's a very large investment, and you'd probably be better served not doing it. We invested over $3 million-and that's without the communications cost, that's the hardware cost," said Mr. Carney.
When a driver receives a message over QUALCOMM, he or she is expected to pull over to the side of the road and respond by using the keyboard and screen installed in the truck.
"We want to know when it's moving, when it's stopped, where the load is," he said, noting that customers need to know where their freight is at all times.
"For us, it's a godsend. When you see a truck that says satellite communications equipment, you're talking about state of the art. It instills confidence with our customers, and provides direct two-way communications with screen and keyboard to all 1,300 trucks out there."
The system is so finely tuned that it can locate equipment to within 35 feet.
It also continues to work even if the truck has been electronically disabled, Mr. Carney pointed out. QUALCOMM also gives a history of a truck's movements. so it's a great investigative aid, Mr. Carney said.
QUALCOMM also provides more prosaic yet critical help to drivers. For example, by using distance algorithms, QUALCOMM automatically supplies drivers' requests for directions, said Mr. Carney.
Simply by eliminating the necessity for drivers to find public phones to get directions, the system has saved time and enhanced security, said Mr. Carney. Before the installation of QUALCOMM, if a driver had to find a customer, that driver had to find a phone, he said.
"There would be parking problems, there would be accidents looking for the phone, it caused late deliveries and made drivers expose themselves to robberies," said Mr. Carney.
The system also "eliminates abrupt movements, unplanned movements," and thus additionally enhances safety.
In addition, the QUALCOMM system allows National Freight to reinforce drivers' awareness of safe driving practices through the "Safety Lotto" program.
To play Safety Lotto, all drivers get a form, which looks like a calendar with a safety message in each block, said Mr. Carney. The safety messages include such reminders as "Signal before changing lanes," and "Don't follow so closely," said Mr. Carney.
Each driver selects 10 of the safety slogans and sends it back to the safety department. Two or three days a week, National Freight sends a safety message out to the QUALCOMM. If the driver sees that message, he marks his calendar form, and when he covers the 10, he reads it back to the safety department. Once his 10 message squares are filled, the driver can select items free from the company store, said Mr. Carney.
"It makes every driver anticipate what the safety message is going to be. It reinforces our program when the safety message comes over the QUALCOMM screen," said Mr. Carney, adding that the program is geared so that eventually everyone wins a prize.
QUALCOMM also allows the company to contact drivers with news of family emergencies and weather outlook. Because it increases efficiency, it also increases driver pay and increases company revenues, said Mr. Carney. In fact, use of QUALCOMM has increased National Freight's on-time delivery rate by 5 points, though Mr. Carney declined to reveal what either the current or previous rate is.
"We've trained all of drivers on how to use it. They're no longer afraid of it."
As one more precaution, National Freight added an extra "panic button" hidden in the dashboard. If the driver's in a panic situation, he can hit the button, alerting National Freight to his problem. National Freight then can notify authorities, said Mr. Carney.
Although a lot of drivers initially hit the buttons by accident, the system works and works well, he said.
Mr. Carney noted a situation where a driver was parked in bad area of Chicago. Some people he did not know began approaching the truck. The driver hit the panic button, which alerted National Freight, which in turn alerted Chicago police.
"Fortunately, nothing happened. But it could have been a horror story. Or it could have been nothing. Again, it shows not only concern for the customer's cargo, but for the driver," said Mr. Carney.
"It demonstrates care for the driver."