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A Business Case for Midsize Truck Inspections

Dec 08, 2014
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SMITH BRAIN TRUST -- Despite calls from some quarters to reduce inspections of medium-sized trucks — those larger than standard pickups but smaller than big freight haulers — award-winning research from the University of Maryland’s Robert H. Smith School of Business shows that such oversight is highly cost effective. For every dollar spent on safety programs, including inspections, nearly $9 is saved in prevented property damage, injuries and fatalities.

That estimate appears in the newly awarded best paper of 2013-14 for Transportation Journal, as determined by the journal’s editors and The American Society of Transportation and Logistics. The authors were Smith Professors Thomas Corsi and Curtis Grimm, along with 2006 Smith PhD graduate David Cantor, a professor at Iowa State University, and Donald Wright of the Volpe National Transportation Systems Center.

The trucks in question range from 10,000 to 25,000 pounds, a class that includes popular models such as the Ford F-350 through F-650. Some legislators, including now-retired U.S. Rep. Dan Boren (D-Oklahoma), have argued that inspection of such trucks is overly onerous for the businesses that use them. Boren and others introduced legislation in 2007 to limit inspections to trucks weighing more than 25,000 pounds.

In 2007 states monitoring the class of trucks in question conducted about 505,000 inspections, which ranged from thorough vetting of vehicles and drivers to briefer visual inspections. At an average cost per inspection of $65, the total cost to state taxpayers was $32 million, the authors estimate.

Costs to the industry are somewhat harder to measure, but the authors make use of U.S Census Bureau surveys of some 2,500 transportation companies. Trucks weighing 10,000 to 25,000 pounds generated between $2.20 and $2.30 in revenue per mile, the data showed. With the average inspection stop lasting 45 minutes, the authors estimate that the total cost to the industry of 2007 inspections was about $51 million. Total costs to the states and companies was therefore on the order of $83 million.

The authors then devised an estimate for how many crashes the inspections prevented. The methodology involved comparing the frequency of certain infractions — from alcohol-impaired drivers to faulty brakes — to how often such problems are linked to crashes in post-collision investigations.

In the end the authors estimate that inspections, in 2007, prevented 80 fatal crashes, 1,197 injury crashes and 2,605 crashes involving only property damage. Using estimates for the values of property damage as well as actuarially accepted figures for injury, pain and suffering, and even death, they valued the losses associated with these collisions at $742.5 million.

Given the high ratio of benefits to costs, the paper suggested that discontinuing inspections would be bad public policy. What’s more, there were safety effects the study did not capture — for instance, maintenance undertaken by truck companies because they know they might be inspected.

In general, the authors conclude that truck inspections have been a major public health success story. In 1979, 5.6 midsize and larger trucks were involved in fatal crashes per 100 million vehicle miles traveled. The figure fell to 1.1 fatal crashes per 100 million vehicle miles in 2009.

The article, “Should Smaller Commercial Trucks Be Subject to Safety Regulations?” appeared in the spring 2014 issue of Transportation Journal, and the research was partly funded by the Federal Motor Carrier Safety Administration.

About the University of Maryland's Robert H. Smith School of Business 

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty masters, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.