Cost of PSP

Sony slashing PSP development

David Mitchell, Aon Risk Solutions Transportation and Logistics Practice

I have met with many trucking companies and discussed how they use and review PSP reports (Pre-Employment Screening Program of the FMCSA). The most frequent response is that each report on new applicants is reviewed individually.

Translation — most companies I meet with have flexible criteria and do not have written standards for an acceptable number of PSP violations. For example, a new applicant with zero PSP violations and an applicant with nine violations may both be acceptable. Some companies do not examine the details of the violations; they just scan the first page of the PSP, where out of service violations are shown.

These same trucking companies do have firm selection standards for MVR traffic violations, amount of experience, and criminal history. They do not treat PSP reports with the same respect as the other selection standards.

This is a recipe for high claim settlement costs, and is not “best practices” to reduce future crashes.
Previous claim settlement verdicts show us that juries have a negative reaction if a serious crash involves a driver with multiple crashes or violations. A high number of violations may be viewed as negligent selection — even if the violations were minor vehicle maintenance issues.

For one client, I had the chance to examine a fleet’s crash costs, along with MVR convictions at date of loss, and PSP violations at date of hire. I expected that drivers with MVR convictions would have high crash costs. That was incorrect — there was actually an inverse relationship. Drivers with one or two convictions had lower crash costs than drivers with a clean MVR.

PSP violations were different. Drivers with 1 or more violations had much greater crash costs than drivers with no violations. There was no question: for this small sample, PSP violations were a better safety performance measurement tool than MVRs.

Larry Ellison (co-founder of Oracle) has said, ”The only way to get ahead is to find errors in conventional wisdom.” That worked in software, and it will also work in your loss prevention plan.

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