Truck Transportation Safety and the Supply Chain

Stephen DeAngelis

December 23, 2010

Barring some action, 2011 will see some important changes in the truck transportation industry as a result of “a shift in inspection regulations for carriers and drivers.” [“Transplace Outlines the Effect of CSA 2010 on the Transportation Industry,” by Steve Dye and Kecia Gray, Transplace press release, 8 December 2010]. This shift in regulations resulted from changes associated with the Comprehensive Safety Analysis (CSA) 2010 program, which establishes “a new regulatory system designed to measure, track, and report driver and carrier safety.” Dye and Gray explain:

“Created and managed by the Federal Motor Carrier Safety Administration (FMCSA), CSA 2010 will be fully implemented by mid-2011 and will replace the current SafeStat program. … What is CSA 2010? CSA 2010 was developed to shift the focus of safety audits away from those done at carrier facilities in favor of more roadside inspections of drivers and vehicles and a readily accessible database of results. Roadside inspections will focus on seven categories – unsafe driving, fatigued driving (i.e. hours of service), driver fitness, alcohol and controlled substances, vehicle maintenance, cargo related, and crash indicator. These seven areas are called BASIC (Behavior Analysis and Safety Improvement Categories) and add up to the Carrier Safety Measurement System (CSMS) score. While drivers do not have scores, carriers can elect to participate in a fee-based Pre-Employment Screening Program that will give the hiring carrier data on the driver including five years of crash data and three years of inspection data.”

According to the staff at Supply Chain Digest, a number of carriers are not happy with the changes and have initiated a lawsuit to halt its enforcement [“With CSA Looming, Trucking Groups Move to Halt Implementation; Should Shippers Care?” 30 November 2010]. The article reports:

“Just a week before the government’s Compliance, Safety and Accountability 2010 (CSA 2010) program is set to be operational, a coalition of transportation groups largely representing smaller carriers has petitioned a federal appeals court in Washington DC to block implementation of the program, or at minimum prohibit the public release of certain CSA data until the Federal Motor Carrier Safety Administration (FMCSA) reviews some aspects of the new regulations.”

One reason that some carriers don’t want CSA data released is because under the program the government scores each carrier. Dye and Gray explain:

“Each carrier will receive a CSMS for each BASIC, which will be stated as a percentile indicating the percent of carriers of a similar size that are better on each particular measure. Carriers will be labeled as ‘continue to operate’, ‘marginal’ and ‘unfit’ based on their CSMS score. CSMS data will be available beginning in December 2010 and the CSMS for every carrier will be updated monthly.”

The intent of the act is to get unsafe drivers and vehicles off U.S. highways; but, Dye and Gray report that it will have other impacts as well. They write:

“Many industry experts estimate that 5% – 10% of the Truckload (TL) driver force will be removed from the industry when CSA 2010 is fully implemented. With expected TL capacity shortages in 2011, removing carriers and drivers will exacerbate the problem and could result in severe capacity shortages, rising TL prices, challenging TL service levels and increasing the cost of moving freight. TL drivers will be scrutinizing equipment and cargo conditions much more closely as they need to protect their own inspection record history. That means more drivers will refuse to pull a trailer if lights are out, tires are worn or brakes are questionable. Drivers will also reject a load that is improperly secured or loaded. There will also be legal implications from CSA 2010. Today, if a carrier does not have a safety rating or has a conditional rating, shippers and 3PLs will either not use that carrier or will look at the SafeStat score to see if the carrier has a record of safe driving.”

Another concern about the new system is that it exposes companies that hire carriers with “marginal” ratings to legal action. As Dye and Gray write, “There is not a set standard of what combination of CSMS scores is high enough to allow the shipper or 3PL to demonstrate that they have exercised appropriate due diligence in hiring a ‘safe’ carrier.” Supply Chain Digest agrees with this assessment. “Afraid of low scores that could lead shippers to drop poorly-ranked carriers or that could be cited as evidence in lawsuits related to future accidents, many smaller carriers see CSA as a major business threat.” That is the reason, the article states, that it is small carriers pursuing legal action. The article continues:

“In the court filing, the three groups [The National Association of Small Trucking Companies, The Expedite Alliance of North America and the Air & Expedited Motor Carriers Association] said that FMCSA should disclose fully to the industry and public all aspects of its proposed rule, including:

  • “The algorithms and other formulas the agency plans to use in developing carriers’ Behavior Analysis and Safety Improvement Categories (BASICs) grades and classifications
  • “The sample populations used in developing the percentiles and other criteria the agency will utilize in grading carriers as to safety
  • “The procedures the agency will use, if any, to determine that alleged violations are reported accurately.

“However, the industry’s largest group, the American Trucking Associations (ATA), said that while it continues to have some concerns with the CSA 2010 methodology, it has decided not to join the other groups in challenging the program in court.”

One reason that the ATA didn’t join the lawsuit is its counsel believes the legal points being argued “have a very limited chance of being successful.” Nevertheless, the ATA agrees that “in those categories where the accuracy of scores is questionable (the Crash Indicator and Cargo-Related BASIC) scores should appropriately be kept from public view.” According to the Supply Chain Digest article, industry concerns have already caused the FMCSA to make some changes to the program. “Those included changing the term ‘Deficient’ to ‘Alert’ when a motor carrier’s score in one or more BASICs is above the FMCSA threshold for intervention, changing the highlight color from red to orange, and making some changes in the algorithms used to compute the scores.” These modifications have not satisfied the groups pursuing legal action. The article explains:

“The trucking groups filing the motion charge that FMCSA has not adequately responded to substantial concerns over CSA methodology, including:

  • Due Process Concerns: CSA 2010 will assign safety ratings based on citations and warnings that motor carriers have no effective way to challenge, the organizations said.
  • Peer Grouping: Carriers required to maintain paper logs of drivers’ on-duty and driving time are peer grouped with carriers that do not need to do so, resulting in unfair comparisons that prejudice carriers using paper logs, the groups said. A large proportion of logging violations typically involve recordkeeping errors rather than excessive driving hours.
  • Data Inequity: Enforcement officials in some states need ‘probable cause’ for charging a moving violation in order to stop a truck for a safety inspection, escalating the number of warnings received by carriers in those states. Although this is the case under SafeStat as well, the inequity will be compounded when they can influence an actual safety rating under CSA, the associations said. In addition to geographical inequity, under-reporting of satisfactory inspections skews several of the BASIC scores, resulting in faulty statistical data.
  • Unexplained Methodology Changes: In August of 2010, after two years of test trials, the agency announced it made 800 technical changes in its methodology, none of which have been released or reviewed by the public, the groups said. ‘Because neither the science nor the math behind the methodology appears to have been subject to Data Quality Act review by the agency, the data has no proven reliability and is not fit to be published given the substantial adverse consequences.'”

For companies that rely on truckload transportation to move their products, there are concerns over capacity shortfalls and rising prices. According to Supply Chain Digest, “assessments on the impact or SCA 2010 to shippers range from modest to dire.” According to the magazine some companies are already screening drivers more closely and rejecting a larger number of candidates. Estimates of how much shipping costs will increase range from 10% to 20% over the coming months. The article concludes:

“While other don’t think the cost increase will be that high, it’s clear CSA will have a larger impact on shippers than many realize, especially those using a lot of smaller carriers whose survival could be in jeopardy from the new rules if they are implemented.”

Dye and Gray indicate that “there are a few simple steps that carriers and shippers can take to help prepare for the changes to safety regulations and the impact it will have on the transportation industry when CSA 2010 goes into effect.” They include:

“1. Make sure you are getting good legal advice on the carriers you should and should not do business with, as well as on your carrier contracting and record-keeping.

“2. Read about the topic and talk to knowledgeable people.

“3. Examine your trailer loading processes and your trailer inspection processes if you operate in a shipper-load environment.”

The official website for FMCSA’s Compliance, Safety, Accountability (CSA ) program can be accessed by clicking this link. Industry analyst Thomas Jackson agrees that CSA 2010 “will reduce the active driver pool (tighten capacity) and raise driver costs,” he believes that the best-run truckload companies will see “better longer term rate gains.” [“CSA Will Lead to Tighter Capacity, Higher Driver Wages and Shipping Costs,” Gerson Lehrman Group, 6 December 2010]. Although that may be good news for some carriers, it’s not such good news companies that rely on them. The program went live on 12 December, a week later than originally scheduled. It will take several months, however, to determine the full impact of the program.