Wednesday, December 29, 2010

Fact Sheet Provided by the Alliance for Safe, Efficient and Competitive Truck Transportation (ASECTT)

This fact sheet is provided to disabuse shippers and brokers of the misconception that “Compliance, Safety, Accountability” as published by the FMCSA on December 13, 2010 is fit or required for use.

First, public release of this data is under court challenge in National Association of Small Trucking Companies, et al. v. Federal Motor Carrier Safety Administration, in the U.S. Court of Appeals for the District of Columbia Circuit, Case No. 10-1402. Unaddressed by the Agency are problems with the methodology including due process (it is based on citations, not convictions), geographical anomalies, reporting failures by state officials, the law of small numbers (the statistical analysis is flawed), arbitrary and capricious peer grouping (dissimilar carriers are compared based on size, not method of operation), and arbitrary and capricious statistical ranking (over 57% of the carriers placed in peer groups are marked under “Alert” and are set for progressive intervention).
With these deficiencies, the Agency itself cannot even use the Compliance Safety Accountability methodology without rulemaking which will not take place for 9 months. The rush of shippers and brokers to use CSA methodology is counterproductive, injurious to their health, and can result in the blackballing of perfectly good carriers. There are certainly vendors and consultants with something to sell, and a few carriers and brokers seeking to get competitive advantage by eliminating competition who advocate immediate use of this data. Yet, it is not necessary to do so. It is counterproductive, and not required by the statute.
As a shipper and broker, you are entitled to rely on the FMCSA to certify carriers as safe for use. The Agency has not and cannot change its statutory duty to approve carriers as unsatisfactory, conditional, or satisfactory and unrated (which is the equivalent of satisfactory).
If the Agency, in doing its duty, certifies a carrier as safe to operate and an insurance company, after investigating it, provides evidence of $1 million in coverage, is the shipping community well served to second guess those decisions?
The case law clearly suggests that you lose your statutory protection of reliance on the regulator’s ultimate decision when you use flawed data like CSA 2010 to credential carriers.
When ultimately refined, use of percentile rankings may be a tool for the FMCSA to do its job of determining safety fitness. If the Agency does its duty to certify carrier safety then the shipper or broker can select carriers for use based upon rates, service, cargo claims liability and limits. If the industry accedes to using CSA 2010 as an industry standard for use in credentialing carriers, only the plaintiff’s bar wins as carriers are blackballed and forced out of business, jobs are lost, competition is reduced, and spot market allocation of back haul shipments is stifled.
Before you use CSA 2010 methodology, consider this. The FMCSA, in discharging its duty places approximately 1% of the carriers it certifies out of service each year yet under CSA 2010, 57% of the carriers the system measures will be over a specified threshold and hence subject to being blackballed if the 5 reported BASICs are used as credentialing criteria.
In sum, its hornbook public utility and regulated industry law that government inspects, regulates and safety fitness certifies for use airlines, taxicabs, bus companies, trains, etc. Why should shippers of cargo using commercial motor carriers be any different? They shouldn’t, nor should they willingly accept a credentialing duty out of misbegotten fear of vicarious liability which will ban their access to 57% of the carriers with enough operations to be placed in peer groups.
Be uber diligent in vetting carriers if you want to. Yet, if you formally give credence to the CSA methodology for credentialing carriers instead of relying on the Agency’s ultimate fitness determination you will lose capacity, put safe carrier partners out of business and expose yourself to increased, not decreased, vicarious liability for negligent selection.

No comments:

Post a Comment

Please email: