Regulation & Legislation: Truckers Get the Message
Shippers and carriers express concern over new regulations and highway funding initiatives.
Trucks carried 67 percent of the freight tonnage moved in the United States in 2011, according to the American Trucking Associations (ATA). With industry relying this heavily on motor carrier transport, changes in the trucking industry can have major ramifications for shippers.
One motor carrier concern shippers need to be aware of is truck-related regulation and legislation. Many of those government policies could influence how shippers and their motor carriers do business together.
Two recent Federal Motor Carrier Safety Administration (FMCSA) initiatives pose possible challenges for shippers: the phase-in of the safety monitoring system known as CSA (Compliance, Safety, Accountability), and the implementation of new Hours-of-Service (HOS) regulations for drivers. The freight world is also debating some other potential initiatives that could influence the cost and ease of moving freight.
Here’s what’s happening now, and what might be rolling down the highway in the future.
CSA: Getting Down to BASICs
What’s the Issue?
In 2010, FMCSA launched CSA, a safety and compliance initiative designed to help identify large trucking companies that aren’t complying with safety rules, so that enforcement officials can intervene.
CSA uses a process called the Safety Measurement System (SMS) to identify carriers that might need intervention. Using data collected from roadside inspections, state crash reports, and the federal motor carrier census, the SMS assigns points for deficiencies in seven areas, known as Behavior Analysis and Safety Improvement Categories (BASICs). They are:
- Unsafe Driving
- Fatigued Drivers (including Hours-of-Service violations)
- Driver Fitness
- Controlled Substances/alcohol
- Vehicle Maintenance
- Cargo-related (such as shifting loads, overloading, and improper handling of hazardous materials)
- Crash Indicator (frequency and severity of crashes)
Once FMCSA calculates points for each BASIC, it places that carrier into a peer group comprised of carriers with a similar number of inspections. Comparing that carrier’s points to others in the group, FMCSA assigns a percentile score. The higher that figure, the worse the carrier’s performance in that BASIC compared with its peers. The best possible score is zero; the worst is 100.
For each BASIC, FMCSA defines an “intervention threshold.” If a carrier scores higher than the threshold for that BASIC, it is a signal that the carrier merits further investigation.
FMCSA makes the CSA scores available to the public through its SMS Web site: http://ai.fmcsa.dot.gov/sms.
What’s the Impact?
Everyone supports highway safety. So, of course, observers close to the trucking industry and the shipping community applaud CSA’s goals. But many express concern about certain details of the program, and its possible effect on shippers.
One worry stems from the fact that many shippers refer to CSA as a safety rating system.
“CSA is not a safety rating,” asserts Jeff Tucker, chief executive officer of Tucker Company Worldwide, a freight broker, ocean forwarder, and non-vessel-operating common carrier in Cherry Hill, N.J. “CSA is the potential building block of a future, yet-to-be-determined safety rating.”
Tucker is also CEO of QualifiedCarriers.com, a company that helps shippers understand whether their carriers are complying with U.S. Department of Transportation (DOT) regulations. Tucker says that like its predecessor, SafeStat, CSA was designed not as a tool to help shippers evaluate carrier safety, but to help FMCSA set priorities about which trucking companies it should investigate in person. (See sidebar, page 42, for Tucker’s perspective on CSA.)
One reason shippers might not want to use CSA scores to tell unsafe carriers from safe ones is that many carriers aren’t in the database. “A few hundred thousand carriers are in operation today, but only a percentage of them have scores under the CSA system,” says Mike Regan, president of Tranzact Technologies in Elmhurst, Ill., and chair of the National Shippers Strategic Transportation Council (NASSTRAC) advocacy committee.
Because CSA scores reflect a carrier’s performance compared with others in a peer group, they represent a kind of grading on a curve, not an absolute measure. “We don’t know what is average,” says Tucker. “Theoretically, a 50 would be average. But that’s not really the case.”
Tucker would like FMCSA to state which CSA scores are bad enough to make shippers shun particular carriers. But, he says, the agency won’t do that. “That’s why it is impossible for shippers or brokers to use the BASICs for anything practical,” he explains.
But Bryan McDuffie, director of distribution at Tyson Foods in Springdale, Ark., says that the intervention thresholds offer a useful measure of a carrier’s safety performance. “We look at all of our carriers’ CSA scores once a month, and we expect each one to fall below the thresholds,” he says.
A shipper can also use the carrier profiles on the FMCSA site to see when carriers make improvements. For example, McDuffie cites one carrier whose Fatigued Drivers score dropped from 35 to 20 over one year. “That indicates the carrier has a driver program that’s obviously working and delivering great results,” he says.
Besides questioning the significance of CSA scores, some observers also question their fairness, especially when it comes to accidents. Currently, crash indicator scores reflect every crash a truck is involved in—no matter who caused it.
“In truck-car accidents, the truck driver is generally not at fault,” says Gail Rutkowski, president of Wabash Worldwide, a Chicago consulting firm that serves carriers, shippers, and brokers. But CSA still penalizes the driver and the trucking company.
That anomaly could disappear before long. “The ATA is actively working with FMCSA to develop an equitable solution,” says Rutkowski.
It’s always good to have more, rather than less, data about carrier safety—but the data must be accurate, says John Cutler, principal with the law firm of McCarthy, Sweeney, and Harkaway in Washington, D.C., and legal counsel for NASSTRAC. “If a motor carrier is unfairly portrayed as dropping the ball on safety issues, there’s a risk that intermediaries and shippers will pull business away from that carrier when they shouldn’t,” he explains.
At the same time, attempts to be fair to carriers with unjust CSA scores could put shippers at risk, Tucker notes. Say, for example, a carrier maintains that its CSA score is inaccurate, and persuades a shipper to continue doing business. Then a driver gets into an accident, and the affected party sues. The plaintiff’s lawyer tells the jury, “I spent 30 seconds on FMCSA’s Web site and found these red flags.” The attorney will insist, based on the CSA scores, that the shipper should never have hired that carrier, Tucker says.
Given some industry doubts about CSA data, what should shippers do about the scores? “You can’t ignore them,” Rutkowski says. Instead, shippers should use them as guidelines, along with other carrier qualification methods.
Hours-of-Service: Give Us a Break
What’s the Issue?
In December 2011, FMCSA published a new version of its rules governing commercial vehicle drivers’ working hours. Some of those new HOS rules took effect on Feb. 27, 2012. Trucking companies must complete the transition to the rest by July 1, 2013.
Some notable changes include:
- A truck driver may be on duty (either driving or doing other work) no more than 70 hours in a seven-day period. Under the prior rule, the limit was 82 hours.
- After driving for eight hours, a driver may not drive again without first taking a break of at least 30 minutes.
- Once drivers have worked the maximum number of hours for a week, FMCSA’s prior rule stated that they must go off duty for at least 34 hours. That hasn’t changed, but now this “restart” must include two periods that run from 1 a.m. to 5 a.m.
FMCSA had considered cutting the number of hours a truck operator may drive per day from 11 to 10. In its final ruling, it kept the limit at 11 hours, but the 10-hour limit is still under discussion.
What’s the Impact?
Observers who work with carriers and shippers are pleased that, at least so far, FMCSA has kept the 11-hour-per-day driving limit.
“Reduced driving time means reduced productivity for the industry,” says Cutler. “It also means more drivers being stranded when the hour clock runs out short of the destination. It may mean that more drivers are needed during a time when we have a driver shortage.” Also, a shorter driving day makes life harder for shippers whose businesses depend on just-in-time delivery.
Some people worry the new requirement regarding the 1 a.m. to 5 a.m. time span will hurt shippers. Not all drivers can span those two periods in 34 hours.
“Take the example of someone who drives the night shift, drops his last load at 11 a.m. on Friday, and goes home for the rest period,” says Cutler. To fulfill the 1 a.m. to 5 a.m. requirement, that driver would have to stay off duty for at least 42 hours. The break would be even longer if the driver were returning to the night shift.
Not only could this rule keep drivers off the road longer, but it could land some of them back behind the wheel at inconvenient times. “Many drivers will end up back on the road during Monday morning rush hour, which is the last thing anyone wants,” says Brian Everett, executive director of NASSTRAC in Waconia, Minn. Driving during peak congestion periods increases the chance of accidents—and, of course, freight moves more slowly in rush-hour traffic.
The new restart period could cause problems for the many shippers whose customers insist on receiving freight in the morning. Adding a half day to a load’s delivery time makes each truck less productive. “The new rule will force shippers and drivers to change schedules, and truckers to buy more trucks—just to do the same amount of work,” says McDuffie. And shippers will bear the extra cost, he notes.
The new rule could also exacerbate the driver shortage. “The HOS rules may prevent trucking companies from making their assignments as attractive, or deny them the flexibility to make sure that their assignments match driver lifestyles,” says Everett.
FMCSA’s Five-year Plan: Down on the Dock?
What’s the Issue?
In 2012, FMCSA published a strategic plan covering 2012 to 2016. One sentence within this document particularly caught the shipping community’s eye: “The FMCSA will achieve its goal to maintain high safety standards to remain in the industry by identifying gaps in resources or authorities that prevent FMCSA from reaching certain elements of the CMV transportation lifecycle (e.g., entities touching highway movement of freight: shippers, receivers, brokers, freight forwarders) that may have a detrimental effect on safety through their actions.”
In other words, say many observers, FMCSA wants to extend its authority beyond motor carriers. It wants to be able to regulate shippers and intermediaries when their activities affect freight movement.
Before FMCSA could regulate shipper or third-party activities, Congress would have to pass legislation giving the agency the requisite authority. FMCSA is conducting research to determine the impact shippers and receivers have on drivers who are detained at loading docks, according to news reports.
FMCSA might also be concerned about shippers who load trucks beyond the legal weight limit, or fail to secure loads properly.
“One issue associated with this FMCSA initiative is vicarious liability,” Regan says. “The theory is that shippers cannot force carriers to act in a way that creates unsafe conditions, then expect to be held free of any claims if something happens with that truck.”
What’s the Impact?
For the moment, the prospect of FMCSA writing regulations for shippers and intermediaries is theoretical. And, McDuffie points out, the agency has not specified which shipper activities it wants to regulate.
“If FMCSA wants to hold shippers responsible for just doing the right thing, that is acceptable,” McDuffie says. But if the agency wants to impose requirements that it doesn’t define clearly, that is a different story.
For carriers, giving FMCSA authority to police what happens on the loading dock could eliminate a major burden—making sure trucks are loaded safely in spite of shippers who pressure them to exceed legal limits. “If the government regulates these practices, it is easier for carriers to respond to demands from customers regarding certain aspects of their operations,” Regan says.
But several observers point out the marketplace already gives carriers strong incentives, and enough clout, to ensure shippers don’t force them into unsafe practices.
“If drivers sense their trucks are being overloaded, they will either refuse the freight, or call their dispatcher,” says Tucker. “The penalties are stiff, and drivers don’t want them on their records.”
Carrier detention charges and similar tools are adequate safeguards against shippers that are tempted to extend a driver’s work day by loading or unloading too slowly, says Cutler.
Rutkowski agrees that the market can regulate carrier-shipper interactions on its own. “In the current environment, with capacity as tight as it is, if you are not a shipper of choice, and you are not carrier-friendly, your freight will not be picked up,” she says.
“Carriers’ rates and charges will take care of any issues that affect carrier productivity,” Rutkowski says. “The FMCSA doesn’t need to do that.”
Truck Weight and Size: Pushing the Limits
What’s the Issue?
Introduced in the U.S. House of Representatives in February 2011, the Safe and Efficient Transportation Act (SETA—H.R. 763) would allow states to increase the weight of trucks operating on interstate highways from today’s maximum of 80,000 pounds to 97,000 pounds. These heavier tractor-trailers would require a sixth axle. The Senate introduced a corresponding bill in April 2011, and an attempt to include the same weight and size increase in a five-year highway funding bill in 2012 was defeated.
What’s the Impact?
SETA’s opponents claim heavier trucks would cause more accidents and do more damage to U.S. highways than vehicles on the road today. Organizations against the increase include the American Automobile Association, the Owner-Operator Independent Drivers Association, and the Association of American Railroads.
Cutler and Everett, speaking for NASSTRAC, disagree that heavier trucks would create more danger and damage.
“The data we’ve seen indicates that longer combination vehicles are safer than regular trucks, because carriers assign more experienced, careful drivers to them,” Cutler says. The difficulty of maneuvering longer, heavier vehicles in urban traffic is a non-issue. “No carrier will put triples on I-95, but in sparsely populated states with little traffic, they can be highly effective,” he adds.
Everett argues that putting heavier triple-trailer trucks on the road means using fewer trucks, which reduces the impact on highway infrastructure. “And, using larger trucks allows carriers to accommodate freight volumes even in light of the driver shortage and hours-of-service limitations,” he explains.
The industry has been testing the effects of longer, heavier trucks for years. “It has been proven that the increase in weight limits, with the addition of the sixth axle, distributes weight more evenly than it is currently distributed across the truck, and would result in a smaller imprint on the roadway than the common configuration,” Rutkowski says.
McDuffie agrees that a higher weight limit would increase productivity, but he’s not a fan of the 97,000-pound, six-axle proposal. “It means significantly modifying equipment carriers already own,” he says. And a sixth axle makes a truck more difficult to handle.
But McDuffie does support another proposal to raise the weight limit to 88,000 pounds without adding an axle. “Today’s tractors and trailers can handle another 8,000 pounds,” he says. While it might take a carrier 10 years to upgrade its fleet to the six-axle configuration, raising the weight limit to 8,000 pounds could bring immediate benefits, McDuffie says.
Transportation Revenues: Toll or Tax?
What’s the Issue?
The need to improve and maintain existing highways, and build more roads to accommodate more traffic, leaves the United States in a bind. If the nation continues funding transportation the way it does today, and at current levels, it could run up billions of dollars in deficits, says a 2007 study by the American Transportation Research Institute (ATRI), part of the ATA.
Even the best-case scenarios indicate that revenues from existing fuel taxes won’t be able to meet U.S. highway infrastructure needs, according to ATRI. This is because more fuel-efficient vehicles are generating less fuel tax revenue; inflation is eroding the buying power of fuel tax dollars; and some transportation funds are diverted to inappropriate uses.
The transportation bill Congress passed in 2012 illustrates the difficulty. “There’s about a $15-billion a year gap in the highway trust fund vs. what the highway bill calls for,” says Regan.
Some stakeholders—including the ATA and NASSTRAC—favor an increase in the federal fuel tax, which has been 24.4 cents per gallon of diesel since 1993. Others argue for letting states impose tolls on more portions of the interstate network, and raising fees on existing toll roads.
What’s the Impact?
Any increase in the cost to haul a load—whether it comes in the form of higher fuel taxes or more tolls—is sure to create additional costs for shippers. But NASSTRAC joins ATA in opposing the tolling option.
“Tolls are not an efficient way of paying for infrastructure,” says Everett, citing the cost of collecting tolls and the additional congestion that forms around toll plazas.
“Many NASSTRAC members, and even the trucking industry in general, are calling for increasing the gas tax rather than expanding tolling,” Everett says.
“Tolling is not necessarily a bad thing,” says Rutkowski. But she expresses concern that as states collect tolls, they won’t necessarily put all the funds toward the intended purpose. “The only way we can ensure funds collected are going into highway infrastructure investment is through the federal gas tax,” she notes.
Groups representing shippers, carriers, and other interested parties have been lobbying on all of these important trucking regulation and legislation issues. With many of these provisions still in flux, shippers will need to keep watching the rules and laws that affect the carriers moving their goods.
Insider Perspective: The Case Against CSA
The Federal Motor Carrier Safety Administration’s (FMCSA) CSA program is in trouble—especially its Behavior Analysis and Safety Improvement Categories (BASIC) scores and Safety Measurement System (SMS) methodology.
Three studies analyzed current CSA data and the SMS methodology to test if elevated BASICs relate to crashes. The studies uniformly found errors in statistical rules and data gathering, as well as significant regional biases that FMCSA has not accounted for or corrected. In short, no evidence exists to support the theory that elevated BASICs relate in any meaningful way to crash history.
FMCSA disagrees, and claims CSA is a success because of a five-percent reduction in bus- and truck-related deaths in 2010. But what is driving that reduction—BASICs, or something entirely different? Spoiler alert: It’s the latter.
Filling in the Background
FMCSA is the U.S. Department of Transportation (DOT) law enforcement agency that ensures highway safety by regulating interstate carriers. CSA, which stands for Compliance, Safety, and Accountability, is FMCSA’s cornerstone program for evaluating motor carriers for intervention. The agency’s limited resources mean it can visit a small fraction of carriers each year, so CSA helps it prioritize those resources.
Under SMS, CSA’s data gathering and statistical methodology, CSA uses seven BASIC scores, which range from one to 100, with higher scores indicating more violations or incidents. Some incidents are not a violation or safety factor, but are recorded against the carrier. Higher BASIC scores alert FMCSA to begin a range of interventions, starting with a warning letter, escalating in severity to on-site audits.
FMCSA released two versions of the University of Michigan’s Transportation Research Institute (UMTRI) report, which studied CSA pilot and early data, and showed some correlation between elevated BASICs in Unsafe Driving and Fatigued Driving.
UMTRI influenced shippers and brokers to consider CSA as one way to objectively select safer carriers. Although BASICs are not an assessment of a carrier’s fitness, have no legal standing, and were not developed for that purpose, users hoped they might help—and some even eliminated carriers exclusively due to BASICs.
Shippers and brokers found innumerable challenges in using BASICs for carrier selection, however. The number of active, for-hire truckers (carriers who have a DOT number, MC number, active authority, and insurance) in June 2012 numbered about 169,300, according to QualifiedCarriers.com reports. Fewer than 33 percent of these carriers have even one BASIC score—and one-third of that group breached FMCSA’s alert in the Fatigued Driving BASIC.
Another flaw is that FMCSA penalizes carriers equally for preventable and non-preventable accidents. BASICs only indicate that a carrier has interacted with law enforcement. In addition, BASIC scores are relative, and “graded” on a curve. Finally, FMCSA hasn’t told users what carrier scores to avoid, so shippers and brokers can’t make fully informed decisions.
What the Research Suggests
In November 2011, Wells Fargo Securities released a study examining the nation’s top 200 carriers (presumably with the most data), using current program data. It found no meaningful statistical relationship between accident frequency and BASIC scores for Unsafe Driving, Fatigued Driving, or Driver Fitness. The report stated that BASIC scores, “may, in fact, provide misleading information.”
FMCSA disagreed, so in July 2012, Wells responded with a second study, expanding to 4,600 of the largest carriers. Again, Wells concluded, “there is no meaningful statistical relationship between ‘poor’ BASIC scores and accident incidence.”
In August 2012, James G. Gimpel, Ph.D., with the University of Maryland’s Department of Government and Politics, published a more scathing report on CSA. He found CSA flawed in multiple and fundamental ways, citing “naïve research errors” and badly censored and biased data. Gimpel concluded that nothing could be extrapolated from the data to the larger carrier population, and its “external validity is in doubt.” He stated the BASICs do not measure what FMCSA claims, and that they “cannot be depended upon” to distinguish safer carriers from any other.
Cause and Effect
FMCSA credits CSA with 2010’s five-percent drop in truck-related deaths. The drop is wonderful news, and cause for everyone working in safety and transportation to celebrate. But with BASIC scores and SMS repeatedly discredited, what’s really behind the drop? A few points to consider:
- Truck-related fatalities have decreased year-on-year for almost a decade, well before CSA started.
- CSA’s launch helped focus carriers on making changes and remaining compliant.
- With CSA’s introduction, FMCSA began a significant warning campaign in which it sent letters to many carriers requesting improvement. The mere threat of an FMCSA audit made an impact.
- FMCSA changed its on-site audits. The old audits lasted several days, and were resource-intensive. With CSA, FMCSA started shorter “surgical” audits, which evaluate only one or two areas, and take just a few hours each day. This system multiplied FMCSA’s audits per year, and safety ratings—which are assigned only after an on-site audit—prove it. In the time since CSA launched, nearly one in 30 carriers with a Satisfactory safety rating lost it, and 28 percent more carriers are rated Conditional—both remarkable swings.
Science, data, and evidence prove that BASICs and SMS are flawed, and useless to brokers or shippers for carrier selection. But while the means to the end are detrimental to shippers, brokers, and carriers, don’t expect FMCSA to cancel this parade. The combination of public attention, apprehension, and more experience visiting carrier operations are powerful tools the agency doesn’t want to lose.