Monday, May 2, 2011

TIA Carrier Selection Framework Drops Use of SMS Methodology - Relies on Settlement

On April 8, 2011, the Transportation Intermediaries Association in a 35 page report dropped use of CSA 2010/SMS methodology as a credentialing criteria for carrier selection. Citing our settlement and the disclaimer language, the TIA endorsed our argument that the Agency is the sole party responsible for certifying safety.

Clearly, the settlement in NASTC et al. v. FMCSA was timely in that it afforded a skeptical broker industry the impetus it needed to reject the insidious advice that shippers and brokers are somehow required to second guess the Federal Government’s ultimate safety fitness determination in order to avoid potential vicarious liability for the acts of the carriers they hire.

Although the University of Michigan study commissioned by the Agency has not been released much less subjected to public comment and review, the Agency has indicated to OMB that it plans to go ahead with rulemaking in late summer or early Fall.

In data mining SMS methodology, the relationship between percentile rankings and national crash predictability appears even more remote. Unsafe driving points seem to be more affected by the vicissitudes of state enforcement than in an actual carrier-to-carrier comparison of speeding violations. “Fatigued Driving” appears more dependent on whether the driver maintains a paper log and accrues form and manner violations than whether his employer actually requires or permits him to exceed the hours of service.

Excessive vehicle maintenance points are accumulated for running lights on trailers and issues which have little or no safety impact and finally the higher percentiles of the driver qualification BASIC are populated by carriers whose drivers simply could not find their medical card at the time of the roadside inspection.

Attached is an important report from Wells Fargo which highlights and confirms our arguments about the flaws in SMS methodology.

Wells Fargo-Equity Research-Regulatory Roulette

Hank Seaton

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