How to curb the top causes of loss at wholesalers, distributors
Motor vehicle accidents account for nearly half of insured losses for midsize wholesalers and distributors.
Wholesale distribution market trends are pointing upwards in 2023, as inflation rates tick down, unemployment stays steady, consumer spending remains strong and U.S. inventories-to-sales ratios revive. Throughout the country, scores of the 24-foot box trucks typically driven by employees of midsize wholesalers and distributors offer evidence of the upbeat conditions, as consumers rediscover the joy of retail shopping.
Every business upside has a downside, however. A significant dearth in the number of experienced truck drivers has generated the need across industries to hire less-experienced drivers. Lack of truck driving experience is a greater predictor of being involved in a crash than a driver’s age, according to a study funded by the National Surface Transportation Safety Center for Excellence.
For midsize wholesalers and distributors insured by QBE North America, motor vehicle accidents represent 48.7% of all incurred losses between accident years 2019-2022 (as of November 2022). Other causes of loss besides accidents include strain injuries (10.4% of incurred losses) and slip, trip and fall accidents (6.5%).
Fortunately, there are many ways to reduce the frequency and severity of truck accidents and related injuries, as well as other injuries that emerge primarily from the type of work involved in the industry, which often calls for lifting, bending and twisting movements. In taking these prescriptive actions, it is important to understand the factors driving the incurred losses, beginning with the largest of the three.
Motor vehicle accidents
Although midsized delivery trucks like 24-foot box trucks may seem easier to drive than a large semi, in some ways they can be more dangerous. Box trucks generally are loaded with tens of thousands of pounds of cargo, making them top-heavy and susceptible to a rollover. Driver experience is crucial to reducing the risk of errors that result in a crash.
Given the current dearth in the number of experienced truck drivers to fill industry needs, training is essential to avoid even simple mistakes, like driving under a bridge that is too low for the truck’s height. The problem is that many midsized wholesalers and distributors may lack the scale to have a formal driver safety program in place. The shortage of truck drivers could mean that drivers also may be working more hours, resulting in fatigue.
To address these risks, an insurance broker and carrier can help wholesalers and distributors design and implement a written comprehensive fleet safety program, beginning with hiring protocols. While driver age is less of a factor in truck accidents than a person’s truck-driving experience, young people in their late-teens and early 20s often make riskier decisions than older people, without thinking through the consequences.
A comprehensive fleet safety program addresses driver selection and initial training to ensure drivers have the knowledge and skill needed to safely perform the job according to the company’s accident prevention policies. Additional training modules and workshops can provide refresher and remedial instruction to help keep drivers up to date on the frequent changes in government regulations, truck equipment, types of cargo and driving routes. Trainers must have familiarity with fleet equipment, knowledge of the company’s operations related to routes and deliveries, and superior personal driving safety records.
Other elements of a well-designed fleet safety program include regular reviews of drivers’ personal driving records; the development of clear and binding rules holding drivers accountable, including for the most minor safety infractions; and easy access to on-demand training videos in both English and other languages, especially when in-person training isn’t available. QBE North America’s fleet safety program comprises more than 500 safety videos.
The use of onboard driver monitoring solutions is an emerging fleet safety consideration, as the technologies can reduce the risk of distracted driving by blocking phone calls or texts when vehicles are in motion. Onboard cameras embedded with artificial intelligence that detect driver drowsiness and other unsafe driving situations is another safety enhancement, as is the use of telematics combining a GPS system with onboard vehicle diagnostics to record and transmit vehicle data like speed, braking and turning, incentivizing safer driving awareness. Some insurers will decrease their premium rates for trucks equipped with telematics.
Strain injuries
Back strains are a common injury in the wholesale and distribution sector and have long been a major contributor to injury-related insurance claims. An analysis by the National Safety Council in conjunction with insurance carriers and regulators suggests that about one-third of all occupational injuries are back-related, accounting for approximately 40% of workers’ compensation payouts and lost workdays.
Material-handling tasks involved in the wholesale and distribution industry often require motions like reaching, twisting, bending, lifting, pushing, pulling and carrying. The complexities of these moves, individually and collectively, require dynamic and static muscle effort that can exceed the elastic capacity of a worker’s ligaments, tendons, bones and discs in the back, resulting in cumulative musculoskeletal stress, strain and damage. As some employees remain in the workforce longer, their age is another factor putting them at greater risk of back strain injuries.
The most effective way to prevent back injuries is to redesign the work environment and work tasks, according to the National Institute for Occupational Safety and Health (NIOSH). Improvements in the design of warehouses and distribution centers that minimize body movements like bending, carrying and reaching correspondingly reduce the risk of back injuries. Examples include adjustments in shelving height and depth to accommodate more comfortable body positions and redesigning a warehouse to move items logically through the aisles based on customer outflows.
Other tactics reducing back strain include minimizing container size and weight to permit easier lifting, providing handles on boxes and containers, decreasing the distance traveled by workers, and providing carts, lift tables, manual and powered hand trucks and counterbalance mechanisms that decrease the forces needed to move a load.
Technology also can help decrease back strain injuries. Work task evaluation tools using AI, such as Humantech from Velocity EHS, can analyze warehouse work patterns by task, location, and worker demographics like age to identify high-risk movements that can be revised for improved safety and even worker productivity.
Slips, trips and falls
Warehouses and distribution centers are a minefield of potential slip, trip and fall (STF) accidents and injuries. Uneven or wet floor surfaces can cause slipping, while clutter left in the aisles like hand trucks, ladders, forklifts and pallets can easily trip workers. Both sets of hazards can result in falls that result in injuries like sprains, strains, broken bones, torn ligaments and tendons, and traumatic brain and spinal damage.
Best practices to reduce the potential for STFs include proactive measures that keep aisles free of clutter. Spills should be cleaned up immediately with floor cleaning chemicals that reduce surface slipperiness. Insurance company loss control staff can help assess slipperiness with a special tool called a tribometer. Other tips include proper lighting and signage, especially in areas known to create tripping hazards or where a spill has just occurred, and written inspection, repair and maintenance procedures.
Loading docks are another area known to generate STF injuries. Safety measures include keeping the dock area free of debris, installing dock-mounted lights for split-shift purposes, and the use of paint or tape to designating staging areas, aisles and loading lanes.
By collaborating with their insurance broker and carrier to address these top three causes of loss, midsize wholesalers and distributors not only can substantially reduce the risk of serious injury to their employees, they may be able to maximize the value of their insurance program.
Bobby Steinsdoerfer is Senior Vice President, Middle Market P&C, and Mark McCormick is Vice President, Risk Solutions at QBE North America.
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