Transportation & Logistics Council & Transportation Loss ... · Transportation & Logistics Council & Transportation Loss Prevention & Security Association April 23, 2012

Transportation & Logistics Council & Transportation Loss Prevention &

Security Association

April 23, 2012

2© Transplace 2012. All contents confidential.

• Maj. Gen. John B. Cooper is the Director of Logistics, Deputy Chief of Staff for Logistics, Installations and Mission Support, Headquarters U.S. Air Force• Legion of Merit with oak leaf cluster• Meritorious Service Medal with four oak

leaf clusters • Air Force Commendation Medal with

three oak clusters • Air Force Achievement Medal with oak

leaf cluster • Global War on Terrorism Expeditionary

Medal • Global War on Terrorism Service Medal

EOBR

Original Speaker


Technology and Service Offerings


• CSA/SMS• Hours of Service• EOBR• Mexico Cross-Border Trucking• Highway Funding• Size and Weight

Regulatory Headwinds


• Shippers and brokers should not be using CSA/SMS data to select carriers

You are needlessly exposing yourself to additional vicarious liability and negligent selection lawsuitsThe SMS scores have no relationship to accident frequency

- You are not contributing to better highway safetyYou are harming small businesses (carriers) by denying them access to freight, and exacerbating the upcoming capacity shortageYou are costing your company money by not using federally licensed, authorized and insured carriers

- Over half of all carriers with BASIC scores have an “Alert”

• FMCSA should stop publishing scores and should abandon efforts to mathematically determine carrier safety ratings with no due process for carriers.

CSA/SMS Key Messages


• Comprehensive Safety Analysis 2010 was intended to find, monitor and rate 750,000 carriers.

The program has been renamed Compliance, Safety, Accountability

• Intended to establish progressive intervention to save the Agency money on compliance reviews and to work with carriers before problems occurred.

• Has morphed into an unproven and unreliable set of data that is being used by shippers to credential carriers

Original Purpose


• Unsafe Driving — driving in a dangerous or careless manner. e.g., speeding, reckless driving, improper lane change, and inattention

• Fatigued Driving (Hours-of-Service) — drivers who are ill, fatigued, or in non-compliance with the Hours-of-Service (HOS) regulations

• Vehicle Maintenance — Failure to properly maintain a CMV • Driver Fitness — drivers who are unfit to operate a CMV due to lack of

training, experience, or medical qualifications • Controlled Substances/Alcohol — drivers who are impaired due to

alcohol, illegal drugs, and misuse of prescription or over-the-counter medications

• Cargo-Related* — Failure to properly prevent shifting loads, spilled or dropped cargo, overloading, and unsafe handling of hazardous materials

• Crash Indicator* — Histories or patterns of high crash involvement, including frequency and severity based on information from state-reported crashes

* Not published by FMCSA

Seven BASICs


Total Carriers

Inspected Carriers43%

Carriers with a Score12%

Carriers with an Alert7% / 56%

CSA SMS Data Summary 2/2012


CSA SMS Data Summary

• Less than 10% of carriers have scores for any individual BASIC

• One percent or less of carriers have scores for Driver Fitness and Controlled Substances

Number PercentFebruary 2012 Data by BASIC MeasuredMeasuredCarriers with Vehicle Maintenance Percentile Score 73,173 9.6%Carriers with Fatigued Driving Score 49,711 6.5%Carriers with Unsafe Driving Score 31,941 4.2%Carriers with Driver Fitness Score 9,019 1.2%Carriers with Controlled Substance Score 2,410 0.3%


SMS Grading on a Curve • For Fatigued Driving BASIC, only 5% of

measured carriers are in top 20% and 32% are in bottom 20%

• 5 A’s and 32 F’s• Vehicle Maintenance: 10% in best 20% and

28% in worst 20%

0

10

20

30

40

50

60

70

80

90

100

1 5,001 10,001 15,001 20,001 25,001 30,001 35,001 40,001 45,001

Fatigued

Driving

Percentile

Number of Carriers

0

10

20

30

40

50

60

70

80

90

100

1 10,001 20,001 30,001 40,001 50,001 60,001 70,001

Veh

icle M

ainten

ance Percentile

Number of Carriers


FMCSA Carrier Size Data • 92.6% of carriers have 10 or fewer trucks• 98.7% of carriers have 50 or fewer trucks• 50% of all vehicles are in fleets of <50 trucks

52.2%40.4%

6.1%

0.7%0.5%

0.1%

Carriers by Fleet Size

1 2‐10 11‐50 51‐100 101‐500 >500

8.0%

22.7%

19.3%

7.4%

14.2%

28.4%

Trucks by Fleet Size

1 2‐10 11‐50 51‐100 101‐500 >500


SMS Data by Carrier Size • Only 13% of all carriers are measured• Only larger carriers are being measured• Measured carriers account for only 57% of all trucks

5.0%

15.6%

50.6%71.8% 80.5% 88.9%

12.9%

0%

20%

40%

60%

80%

100%

1 2‐10 11‐50 51‐100 101‐500 >500 Total

SMS Data by Fleet Size

No Inspections in 2 Yrs No SMS Scores SMS Scores

Note that the total population of carriers drops to 694k for carrier size analysis


Carriers Over the Limbo Bar

46%

37%

13%

5%

Number of Alerts

No Alerts 1 Alert 2 Alerts >2 Alerts

• Over half of all measured carriers are “Golden Triangle” carriers


Alerts by Carrier Size

• Even for large carriers, 38% can’t clear the limbo bar• Small carriers lose under SMS methodology

33% 41%59% 68% 68% 62%

46%

51% 39%

26%20% 19% 25%

37%

0%

20%

40%

60%

80%

100%

1 2‐10 11‐50 51‐100 101‐500 >500 Total

Alerts by Fleet Size

No Alerts 1 Alert 2 Alerts >2 Alerts


SMS Scores Are Not Related to Carrier Safety Performance

Source: Wells Fargo, Anthony Gallo


Wells Fargo Shows SMS Scores Are Not Related to Carrier Safety Performance

Source: Wells Fargo, Anthony Gallo


FMCSA Claims Correlation Exists

Source: FMCSA: “Review of Wells Fargo Equity Research Report on Compliance, Safety, Accountability”


Our Analysis Proves No Correlation

Source: Transplace analysis; 26,435 carriers Unsafe Driving, 35,933 carriers Fatigued Driving


Small Carriers Create Noise in the Data

Source: Transplace analysis; 9,200 carriers Unsafe Driving, 7,700 carriers Fatigued Driving

Carriers With 25 or More Trucks


Do we need increased shipper and broker liability to improve safety?

Do we need to blackball from use half of the motor carriers which the Agency can find and monitor?

Trucking Industry Safety Record


Use of SMS methodology by shippers and brokers is a bad idea: If you use SMS data you:•Assume a duty and assume higher risk of non-compliance.

•Cannot stop introduction of SMS methodology or challenge its validity.

•Lose the ability to rely upon federal preemption and the government’s ultimate safety fitness determination as the gold standard.

Regulators not consumers should determine carrier fitness.

Don’t Use SMS Data


• Shippers and brokers should not be using CSA/SMS data to select carriers

• FMCSA should stop publishing scores and should abandon efforts to mathematically determine carrier safety ratings

• FMCSA should utilize CSA/SMS for its original purpose of deciding where to dedicate its enforcement resources

A Call to Action


• Key changes in new rulesDrivers must have two consecutive breaks from 1 AM to 5 AM once per weekMinor other changes such as mandatory rest breaksDriving hours were not reduced from 11 to 10

• Impact on carriersDepends on fleet but average of 3% utilization declineThat means 100,000 more drivers are requiredMore trucks hitting the road at 5 AM on Mondays rather than late Sunday night means greater congestion and more accidents

• The ATA is suing, but so is the other side• Effective date is July 2013

Hours of Service


• Required use thrown out by 7th U.S. Court of Appeals Specious concern about carriers harassing driversOOIDA opposes EOBR mandateATA in favor of mandate

• FMCSA will get this back on trackConducting “listening sessions” to address driver concernsThe Senate Highway Bill includes an EOBR mandateLarge carriers achieve higher equipment utilization with EOBRs

• The technology is affordable and effectiveThere are still issues around equipping highway enforcement personnel to access the EOBR

EOBRs


• Agreement signed July 5, 2011 to renew cross-border trucking program

Mexican truckers must comply with Federal Motor Vehicle Safety Standards, utilize EOBRs (paid for by FMCSA), and driver must speak English

• Only one carrier with two trucks, another with one truck, and one other owner operator have been approved

As of Feb 9, 2012 the first carrier had crossed the border 9 times

• OOIDA, the Teamsters, and Public Citizen are all suing to stop the program

• Mexican carriers need to get loads back to MX, so don’t want to come to far into the U.S.

Mexico Cross Border Trucking


• Senate seeks 2-year bill and House looking for 5 years or another extension

Spending target is $54 billion per year, but federal fuel tax receipts are $35 billion per year

• SAFETEA-LU signed August 2005 and expired September 2009

Extended 9 times and expires 6/30/12• Federal diesel tax flat since 10/1/93 – purchasing power

destroyed• Highways and bridges in poor condition

63% of metro highways in less than “good” repair in ‘08Average age of bridges is 43+ years and most were designed for 50-year life

Highway Funding


• Beware of Vehicle Miles TaxFeds lack courage to raise the fuel tax for almost 20 years or even index it for inflationBut somehow can create an entirely new and very inefficiently collected new tax

• There are a number of interesting proposalsFocus all federal fuel taxes on interstate highways and bridges, not transit and bike pathsDevolve highway decision making back to the states –they do the work anyway and the Interstate system was largely complete in 1980’s. Transit is inherently local/regional.Tolls for new highway construction, but prohibition of conversion of existing Interstate to tolls

Highway Funding


Federal Highway Trust Fund

Source: Transplace analysis

‐10

‐5

0

5

10

15

20

Billion

s of Dollars

Annual Surplus of Highway Account of FHTF1957‐2010

Transfers from General Fund

Transfers to General Fund


• Two proposals97,000 pounds with third trailer axle88,000 pounds with current configuration

• Shippers are for it but most others are against itATA, railroads, unions, and safety groups are all opposed

• Strong lobbying effort in February 2012 – “Stand up for Trucking” DC event

Included in initial Senate bill, but quickly tossed outAlso excluded from House bill

Truck Size and Weight


• Current legislative and regulatory environment drives up logistics costs with no improvement in safety or solution to our crumbling highways and bridges

• Many players seek competitive advantage through regulation

• Fearmongers seek to sell products and services to capitalize on confusion

• The supply chain industry needs to speak up• Fact-based arguments• Common sense solutions

Conclusions

Transportation & Logistics Council & Transportation Loss ... · Transportation & Logistics Council & Transportation Loss Prevention & Security Association April 23, 2012

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