Safety Technology: The Payback

When Varun Vijay Rao talks to fleets about safety technology for trucks and trailers, he starts with what may seem like an unusual perspective: payback. As product manager for ArvinMeritor's automatic trailer tire inflation system, Rao likes to point out that safety technology can save money as well as lives. He helps fleets determine two things: how long it will take to earn back the original cost

When Varun Vijay Rao talks to fleets about safety technology for trucks and trailers, he starts with what may seem like an unusual perspective: payback. As product manager for ArvinMeritor's automatic trailer tire inflation system, Rao likes to point out that safety technology can save money as well as lives. He helps fleets determine two things: how long it will take to earn back the original cost of the safety technology, and how much it will gain over the life of the truck or trailer equipped with specific safety technology.

When you're talking about tire inflation systems, the payback can be fairly dramatic. Rao says that about 80% of tire problems are caused by improper inflation. The problems range from the relatively mundane, including decreased tire life and lower fuel economy, to the catastrophic, such as a blowout at highway speed that causes a major accident. So when fleets install an automatic tire inflation system on the trailer, they not only cut down the chances of a dangerous on-highway blowout, they also reap myriad cost savings.

Here's how Rao calculates the payback. First, there's the impact of extended tread wear. For example, a fleet with properly inflated trailer tires can expect an additional 10% of tread wear. The savings for a trailer spec'd with eight $225 tires traveling 90,000 miles a year is about $200.

Automatic tire inflation systems also reduce maintenance costs. At $25/hr., paying someone to spend 25 min. a month checking and filling the eight trailer tires costs the fleet about $150 a year per trailer.

Then there's the fuel saving, which can be as high as 2% if tires are inflated properly. Assuming mileage of 6 mpg and a diesel fuel price of $1/gal., this adds up to $300 per trailer annually. Finally, preventing just one blowout saves $350 a year — the cost of one service call and one new replacement tire.

If we add these savings, we can see that a fleet can easily earn back the average $878 it costs to purchase and install ArvinMeritor's automatic tire inflation system on one trailer. And that's even before accident-prevention savings are taken into account.

Rao says ArvinMeritor has seen a surprising demand for automatic tire inflation technology in the intermodal market. “It surprised us because intermodal is the most price-sensitive portion of the industry, and its trailers aren't on the road as much as other segments.” He thinks there was little resistance to the technology because “the payback calculations are crystal clear to them.” According to Rao, “there are a lot of leased trailers in the intermodal business and drivers tend not to check tire pressure as much. We showed them how using an automatic inflation system can prevent asset damage and thus save money.”

Despite a steady reduction in truck-related highway fatalities, accidents remain an Achilles heel for the industry. First, the big picture. The National Safety Council reports the total cost of accidents and workplace injuries in the U.S. is more than $126 billion a year. And the National Highway Traffic Safety Administration (NHTSA) says that 41,821 people died in traffic accidents in 2000, up slightly from 41,717 in 1999. Yet the truck-related portion of those fatalities decreased by 3.1%. Overall, the trucking industry averages 31,000 accidents a year, or about 2.16 accidents per million miles.

What do those numbers mean in terms of costs to fleets? The Dept. of Transportation says the average trucking accident leads to $5,000 in physical damages alone. This means $10,800 per million miles. And if you factor in litigation costs, workers' comp, higher insurance premiums and other expenses, the numbers skyrocket.

The Pacific Institute for Research and Evaluation looked at the total cost of the 31,000 truck accidents and 723 truck driver fatalities that occurred in 1997. They came up with a figure of $24 billion, including $8.7 billion in productivity losses, $2.5 billion in resource costs, and quality of life losses valued at $13.1 billion.

Indiana Mills & Manufacturing Inc. (IMMI), which makes commercial vehicle safety restraint systems, used that study to extrapolate what an accident really means in terms of costs to a fleet: on average, $183,000 in an accident where the truck driver is injured, and $2.7 million per accident when a driver is killed. This includes medical expenses, emergency services, and lost productivity. According to Bruce Dufour, business unit manager-commercial vehicles for IMMI, even one accident can result in enormous losses to a fleet.


Dufour says that IMMI provides what he calls “the last line of defense” for truck occupants — safety restraint systems that will prevent injuries and fatalities once an accident occurs. “Our safety equipment can't save a cargo load or a truck, but we can save the truck's driver and occupant,” he explains. “Aside from the moral value of saving lives, there are major cost savings associated with preventing injuries and fatalities to drivers should they be involved in an accident.”

Harry Templin, manager of the Center for Advanced Product Evaluation, IMMI's testing facility, says that even just wearing seat belts that are a step beyond what is required by government regulations pays off big in both saving lives and reducing accident costs. “For example, even though the government requires only two-point seat belts in trucks, most manufacturers install three-point seat belts as standard equipment,” he says. “Moving from two-point to three-point belts has reduced truck-driver fatalities by 45% over the last two decades.”

Seat belts can't provide complete protection, however. According to Templin, 60% of all truck crashes result in rollovers, 55% of Class 8 fatalities occur in rollover situations. One factor that may increase the chances of a fatality in a rollover is the air ride seat favored by so many drivers. While providing excellent comfort, they are susceptible to the gravity forces of a rollover, which means they extend to their highest position as the truck rolls.

“Gravity and the centrifugal force of a rollover can propel the seat upward towards the roof, the greatest point of danger to the driver,” says Templin. “That's why we've worked on a system that pulls the seat down to its lowest point, locks it in and then deploys airbags for extra protection when it senses a roll.”

Will such safety systems help lower insurance rates? Dufour can't say for sure, but it seems like a logical conclusion. “There's got to be some value to insurance providers if injuries and deaths go down by using this device,” he says.


Penske Logistics is using truck radar to reduce accidents and all of their associated costs. Last year, Penske conducted a pilot program for Whirlpool Corp., installing Eaton Corp.'s EVT-300 collision warning system on half of the trucks it operates for the appliance maker.

EVT-300 uses a high frequency radar system to transmit signals from the front end and side of the truck, monitoring up to 20 vehicles ahead and in the blind spot on the right. When a potentially hazardous situation is detected, a display unit on the dashboard emits a series of visual and auditory alerts, giving the driver time to react before an accident occurs, Eaton explains.

According to Penske, the locations in the pilot program demonstrated an 81% decrease in costs related to accidents that could be prevented by truck radar, and a 44% reduction in costs for all auto liability accidents overall. The latter include losses due to legal liability for damage to other vehicles and accident-related injuries.

Paul Penatzer, vp-safety for Penske Logistics, says reducing accidents lowered overall operational costs, and cut indirect accident costs, including delivery delays and cargo damage.

The results of the program convinced Penske that truck radar more than pays for itself. “We feel so strongly about the benefits that we now include the EVT-300 as standard equipment on all new tractor orders,” says Penatzer. “We also plan to retrofit the EVT-300 on many of the tractors in our existing fleet.”

Chris Royan, general manager for Eaton's VORAD product line, says that by reducing accidents just 15% with truck radar not only pays for the cost of the technology but “makes” money for the fleet as well. Royan points out that beyond insurance and maintenance, there are very few avenues left where fleets can cut operational costs. The way to cut insurance costs is to eliminate accidents, which will also reduce repair and replacement costs.

Resource Box
Allied Signal
(electronic braking system)
Indiana Mills & Manufacturing Inc.
(driver seat belt and rollover protection devices)
(automatic tire inflation system)
MGM Brakes
(electronic brake monitoring system)
Bendix Commercial Vehicle Systems
(infrared night vision system)
Transportation Safety Technologies
(vehicle detection system)
Eaton Corp.
(collision warning systems)
VDO North America
(data recorder system)

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