Feasibility Study Concerning Safety Management Systems For the Motor Carrier Industry in Canada

Executive Summary

• Introduction
• What is an SMS?
• Major Findings
• Recommendations
• Disclaimer

Introduction

The objective of this study was to analyze the applicability of Safety Management Systems (SMS) for the Motor Carrier Industry in Canada and to discuss its relevance and potential benefits to government, industry and the public at large.

During the study, the consulting team:

• Outlined the major features of an SMS, and investigated SMS developments in other transportation modes in Canada and for the motor carrier industry in other countries.
• Segmented the Motor Carrier Industry and discussed to what extent industry segments might be using SMS or SMS-like systems or components.
• Assessed the potential feasibility of applying SMS to the industry.
• Analyzed in qualitative terms the costs and benefits that could be incurred by the industry, Transport Canada, Provincial Governments and the general public in applying SMS.
• Recommended how SMS could be applied to the industry.

What is an SMS?

There is no one clear definition of SMS. We defined SMS as a management system within an organization to manage safety risks.

The major components of an SMS typically include the following:

1. Commitment by the organization’s senior management to safety as evidenced by the endorsement, of:
   1. Safety policies;
   2. Measurable safety objectives; and
   3. Clear organizational responsibilities and accountabilities for safety including appointment of a senior manager (or officer) responsible for safety as well as a safety committee.
   4. Procedures for monitoring safety performance and reporting safety hazards, incidents and accidents.
   5. A safety assessment process to identify hazards, evaluate the safety risks of these hazards, and to take corrective action.
   6. A plan for communicating the SMS to all employees.
   7. Safety training of employees.
   8. Periodic audits.
   9. Documentation of the organization’s SMS.

Major Findings

To date, SMS has been applied to relatively (compared with trucking) large carriers in other transportation modes with sophisticated management structures and strong financial capabilities. The costs of implementing SMS were not a major factor since most components were already in place.

Canadian and international SMS guidance documentation generally define or focus on SMS as a management system within an organization to control safety risks. This implies that there is an organization that can benefit from a management system to ensure that safety information is shared and analyzed within the organization and that corrective action is taken when appropriate. An SMS aims to break down barriers to communication between different parts of an organization in recognition that the decisions or actions of any one part may have an impact on the safety of another part. An SMS also attempts to create a safety culture in an organization that includes senior management commitment and involvement in safety such as setting and monitoring safety polices and measurable goals.

There is virtually no experience in applying SMS to small operators. Transport Canada is studying the issue in depth in the aviation sector.

We conclude that small operators in the truck and bus industries require different guidelines and tools, possibly different regulations, and perhaps different implementation phasing. More study is required on how SMS might apply to this segment. We also conclude that the minimum threshold for defining small fleets should be 20 power units or less.

On further study it may be found that it is not practicable to apply SMS to owner-operators where there is no organization to speak of. Many of these owner-operators work for for-hire fleets. These operators should be expected to have safety programs in place that at least demonstrate compliance with safety codes. Fleets subject to SMS should have the right to audit or inspect third parties. SMS fleets should also include incidents and accidents incurred by owner-operators in their reporting systems.

The implementation of SMS is in its very early stages in other modes in Canada. Based on the very limited survey of this study, SMS users, and those familiar with SMS, believe very strongly that SMS can reduce accidents and save transportation carriers money. The few Canadian trucking firms that have implemented SMS strongly support this view. SMS can also maintain or enhance a fleet’s reputation and competitive position. Morally speaking, there is a belief that SMS saves lives and reduces injuries.

Unfortunately, there does not appear to be any quantitative information on SMS benefits in Canada or overseas. Based on this limited information, the Department faces a challenge in convincing Provincial/Territorial partners and industry stakeholders that SMS should be adopted; for example, as a new standard under the National Safety Code.

Other transportation modes in Canada with fewer accidents and fatalities have been, or are being regulated by the federal government to establish SMS. It is not likely that motor carriers will establish and implement SMS without a regulatory requirement or a very strong inducement.

Recommendations

We recommend that the Road Safety Directorate of Transport Canada should play a leadership role in establishing SMS in the Motor Carrier Industry.

As a first step, we recommend that the Road Safety Directorate develop a convincing business case for establishing SMS in the Motor Carrier Industry through research that would:

• Provide a better understanding of possible reductions in accidents, cost savings, underlying safety factors and the cost of SMS through case studies of fleets that are using SMS in comparison with similar fleets not using SMS;
• Determine through surveys what safety programs and components of SMS are already in place and what the costs might be for adopting all of SMS for various sizes and types of fleets;
• Compare and contrast safety and fatalities between the Motor Carrier Industry and other modes to further develop the business case for SMS;
• Monitor SMS developments in the other transport modes in Canada, especially SMS for small operators; and
• Collect more information on benefits of SMS in the other modes as they gain experience with SMS. For example, detailed case studies of several airlines and railway companies now appear feasible.

The Road Safety Directorate will also need to:

1. Seek clarification regarding legal issues surrounding 3rd parties, voluntary reporting and fleet reporting of safety incidents. This reporting should include reporting of owner-operators working for for-hire and private fleets.
2. Develop SMS standards and guidelines that are sufficiently flexible to accommodate the range in size and complexity of trucking and bus fleets. SMS standards and guidelines are outlined for large and small fleets in the report.