Our next company is Mullen Group Ltd. (TSX:MTL), one of North America’s largest logistics providers, housing a network of independently operated businesses.
We spoke with Randy Mercer, Director of Risk Management, who detailed the company’s risk profile across its complex business operations.
TMH: Can you kind of explain what are some of the risks that you see within daily operations of Mullen Group?
RM: Mullen Group is a very large transportation logistics company. We operate 40 businesses and just to give you a little bit of background on how big of a scope we operate, that the risk is immense. We have about 7,500 employees and we travel between 250 million and 300 million kilometers a year.
These are consolidated numbers amongst the 40 companies in our group. We run about 4,300 power units on the road and we deliver 5 million loads a year.
Now, 99.6% of the time those loads are delivered, claim free and man hours worked are north of 15 million man hours. So it’s quite extensive. We have dock workers, forklift people, drivers, mechanics, and the gamut is endless with the risk factors within our company.
TMH: What is your largest risk and what is done to mitigate the risk?
Mercer: Well, I would say certainly that the risk that tops is an auto collision. So with the extent of power units and drivers we have on the road and pushing 300 million kilometers a year, auto crashes is certainly a big risk within our group, so I would say that. We push education and training very strongly within our organization.
We have a goal of 20 training hours per year per person within our company and we focus on defensive driving a great deal with our group and our drivers. So this is a bit of an in-classroom teaching and on the road as well. So we cover the full aspect of driver training.
TMH: And are there any safety standards that your business units are challenged to meet?
Mercer: We sure do. We challenge them to be above industry. So government regulation is generally a baseline, we want to exceed that baseline and be a top of our peer group. So carrier profiles, we look at things like that. We look at WCB accounts and make sure that we’re in a good position for rebates. We also set targets for things like lost time claims.
Now that’s when someone’s injured at work and they can’t return to their next shift. So the target there would be under one.
We have a total recordable injury, people getting hurt at work but they can still continue their daily functions. So the target there is to be under four and gross claims to revenue. Now, gross claims to revenue is when an incident happens, whether that be a cargo, auto, environmental, that is everything that we pay for and our insurance company pays for combined and the target is to be under 1%.
Now of a $2 billion company like Mullen Group is, that rounds out to be under $20 million in claims a year. So that’s our target. Now, where did we finish off? We are happy to say we met all three of these targets.
So lost time claims came in 2023 at 0.79% under the target of one. TRI (Total recordable injuries) at 3.53% under 4% and our claims came in at 0.51%. So very happy with our results.
We could always do better but continuous improvement is our model be better than the year prior.
TMH: I’m also interested in knowing what is the internal due diligence process for the company for its business units.
Mercer: We get very involved in auditing our companies. We audit them amongst the industry itself but we also benchmark them internally amongst the peers here within the Mullen Group. So we have what’s called a Grand Prize Safety Award audit that we do or GPSA for short now. We started this audit process in 1997. We’ve been doing it for 26 years and it’s ever evolving.
So when things like dash cams come in, we implement that electronic logging or hours of service. It’s ever evolving and ever changing and we update it as time goes by but we do this with a process of having to have good results.
The playbook has to be intact but you also have to perform, right. We look at things at a carrier profile and WCB as I mentioned earlier and you have to meet our corporate targets that I talked about.
This audit, the Grand Prize Safety Award audit is a 10 step audit and the first section of that audit is leadership. If leadership or the people at the top of the organization do not believe in protecting their people, property, our customers, cargo and the general public at large, this doesn’t work. We have to have leadership.
Section two is about employee selection. Don’t hire your problems. You can vet most of your issues at the door and we’re very heavily into logistics. So we’d rather sell a piece of freight to a logistics provider rather than put an unqualified person on the road, very top of mind. Risk management, make sure you’re doing it properly, make sure our facilities and equipment are in tip top shape for our employees. Carrier profile is what allows our companies to operate on the road right across Canada, depending on whatever province they operate in. Environmental code of practice is a part of the audit.
So ESG hits the airwaves quite a bit today. We focus on that and a program called SmartWay, which goes into better fuel economy, better mileage, that type of thing. Emergency preparedness with emergency evacuations and things like that. What do we do? We’ve put cyber hacking into focus and what do we do if we have no computers and we’re shut down, can we still operate and function?
So that’s a current change within our system and you have to perform, as I mentioned earlier, you have to do what you say you do.
TMH: And to go back for a second, you mentioned the Grand Prize Safety Award for 2023. So who is the winner for 2023?
Mercer: I’m glad you asked that, and it makes me very proud and happy to say that one of our 40 business units who won this year is Caneda Transport. Caneda does a lot of US miles. They have three terminals, one in Alberta, California and the GTA and running that triangle comes with a great deal of risk. Of course, operating in the United States is certainly a top of mind for risk environment and I’m very happy to say it’s Caneda Transport. They run a great ship over there. They’re certainly dedicated and laser focused upon doing it right the first time.
You can find Mullen Group Ltd. on the TSX under the symbol MTL or head to its website at mullen-group.com for more information.
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