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322683 - Transport Capital Partners, LLC. Campaign


TCA Newsroom

inGauge™ Analyzing Relationship Between Profitability and Safety
6/21/2016

Alexandria, Virginia: 

To test a theory about safer fleets being more profitable, inGauge™ (TCA's online benchmarking service) began analyzing the data from all Dryvan and Refrigerated motor carriers within its current population of motor carriers. After segmenting the population into quartiles based on Operating Ratio, a secondary query was produced to retrieve results for the following CSA Basic Scores:

Unsafe Driving
Hours of Service Compliance
Vehicle Maintenance

As a result, on a preliminary basis, inGauge™ was able to report that the average of each CSA Basic score listed above improved as overall quartile profitability grew. 

With the assistance of TCA's Director of Safety & Policy, David Heller, inGauge™ recently introduced the "Safe OR". This new EPI (Essential Performance Indicator) is a combination of a company's Operating Ratio as well as the sum of the three CSA Basic scores mentioned above. For example, if your Operating Ratio is 94.5%, and the sum of your three selected CSA Basic Scores is "3", your new "Safe OR" is calculated as 97.5%. Similarly, if your Operating Ratio is 94.5%, and the sum of your three selected CSA Basic Scores is "7", your new "Safe OR" is calculated as 101.50%. In other words, this measure rewards BOTH profitability and safety.

As an alternative, it was also suggested that the BASIC scores in the above metric are replaced with Insurance expense. Using this alternative, for example, if a company has a Operating Ratio of 93.00% and Insurance Expense (% of Revenue) of 3.5%, this alternate "Safe OR" would be 96.5%. 

In both examples, you are rewarded for both profitability and strong performance, however the argument for the alternative method is that Insurance expense is largely determined by a third party based on actual claims experience, as opposed to results which can be contaminated due to geography and subjectivity. 

If you have feedback or are interested in learning more about the product, contact inGauge™ Program Manager, Chris Henry at 888-504-6428.


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