Wednesday, July 6, 2011

Three Notable Articles

Please note the following three articles:
  1. Agency Announces “5 Year Strategic Plan” – Comments due July 29
  2. Agency Asks Motor Carrier Safety Advisory Committee to Address Problems with SMS Methodology without Reinventing the Wheel
  3. Possible $100,000 Broker Bond

FMCSA Notice Strategic Plan 2011 2016

2. “FMCSA to Examine Severity Weightings of CSA Violations at Roadside Inspections”
Transport Topics; week of July 4, 2011; By Eric Miller, Staff Reporter

The Federal Motor Carrier Safety Administration has asked its advisory committee to examine concerns about roadside violation severity weightings in the agency’s new safety program and to help develop wireless Internet-based electronic logging device technologies.

At a meeting in late June, FMCSA officials asked members of the Motor Carrier Safety Advisory Committee to make sure that the points the agency assigns to dozens of violations under the Compliance, Safety, Accountability program are weighted fairly so they are an accurate predictor of a carrier’s crash risk.

Specifically, FMCSA asked the committee to determine if the individual roadside violations are in the correct violation grouping, and to rank each violation group in the Behavior Analysis and Safety Improvement Categories, or BASICs, in priority of crash risk.

The committee is expected to report back to FMCSA by the end of August, said David Parker, senior legal counsel for Great West Casualty Company and the committee’s chairman.

Although the industry has generally been supportive, some have been critical of the CSA program because they believe not all of the violations are related to a carrier’s risk of crash or safety performance.

Bryan Price, an FMCSA senior transportation specialist, told MCSAC members that the agency wants the advisory committee to “refine” the CSA’s controversial Carrier Safety Measurement System and help the agency gain trucking industry support for the system that went into operation in December.

“We’re not asking you to reinvent the wheel,” Price told the committee during a June 21 meeting.

The seven BASICs are unsafe driving, fatigued driving, driver fitness, controlled substances and alcohol, vehicle maintenance, cargo-related and crash history.

The new safety measurement system incorporates all safety-related violations recorded in roadside inspections. The prior rating system, SafeStat, only counted out-of-service and select traffic enforcement violations from roadside inspections.

The severity ratings, from one to 10 points for each violation, with 10 being the highest, were developed by the agency based on a sophisticated “statistical regression” computer analysis and expert review of the violations of 250,000 drivers from 2005 to 2007, Price said.

The resulting measurement system has been an attempt by the agency to rank the bad behaviors that lead to increased crash risk.

The CSA database maintains a carrier’s history for two years and a driver’s history for three years.

“We’re not looking for a guy that has a bad day,” Price said. “We’re looking at patterns of behavior.”

But during a public comment session, Jeannie Gordon, vice president of compliance for Landstar Transportation Logistics, asked that the committee review crash data as they relate to all seven BASICs.

“Carriers with very low crash frequency can, and do, have BASICs over the threshold,” Gordon told the committee. “It just doesn’t make sense.”

“Consider that even if a carrier has a low crash rate, customers are looking at other BASICs. Carriers can go for a year without an inspection and still have BASICs above the threshold.”

Beth Thomas, a senior attorney for regulatory affairs for FedEx Ground, said the package carrier has concerns over violations not safety- related, such as failure to pay child support or state taxes being listed on a driver’s record.

“These result in driver’s license suspensions for administrative reasons that has nothing to do with the safety performance of a driver.”

Thomas asked that the committee and FMCSA consider decreasing or eliminating severity weights for such violations not safety-related.

The committee also was asked to help the agency define the structure that will transmit hours-of-service data from a handheld wireless electronic logging device via the Internet to a law enforcement officer’s laptop.

Michael Huntley, chief of FMCSA’s vehicle and roadside operations, told the committee that, after meeting with carriers, law enforcement officers and EOBR suppliers, the agency established that a wireless device would be a “viable option” for many carriers.

The agency also wants comment from the committee on issues related to the transmission of the data through telemetric application services, USB connections and the 802.11 wireless local area network.

Randy Mullett, vice president of government relations and public affairs for Con-way Inc., told the committee he was concerned that an Internet-based system would be costly for carriers that have invested tens of millions of dollars in Global Positioning System-based EOBRs, rendering those devices “essentially useless.”

The agency is rushing to ensure that EOBR suppliers can provide compliant devices by June 1, 2012, when the agency plans to publish its final EOBR rule. Nearly all interstate carriers would have three years from the effective date to comply with the rule, which is designed to enforce hours-of-service compliance.

Parker said the committee plans to come up with the technical specifications by Aug. 29. He said the committee will hold public meetings on July 11-12 in Alexandria, Va., and a second meeting on Aug. 1-2 at a yet-to-be determined location.

“There’s a lot to be done,” Parker said.

3. “Bill Would Mandate Bond of $100,000 for Brokers”Transport Topics; week of July 4, 2011 - Byline: Eric Miller, Staff Reporter

An anti-fraud bill introduced in Congress would raise the freight broker surety requirement to $100,000 and mandate that motor carriers who broker freight loads obtain separate broker authority.

The Fighting Fraud in Transportation Act of 2011, introduced June 24 by Rep. Frank Guinta (R-N.H.) and Rep. Russ Carnahan (D-Mo.), is supported by American Trucking Associations, the Transportation Intermediaries Association and the Owner-Operator Independent Drivers Association — three trade groups that often don’t agree on transportation legislation.

Supporters said the legislation would go a long way toward keeping fraudulent brokers out of the business and help insure that truckers get paid for freight they haul.

Opponents claim the higher surety bond would discourage small brokers from entering or staying in the business.

The bill would also increase requirements and disclosures for any person or company seeking to obtain broker or freight forwarder authority, toughen penalties for violations of broker regulations, and establish strict guidelines for companies that provide brokers with surety bonds and on how they administer those bonds.

“This law would put a stop to a system that allows ruthless brokers and scam artists to continue to operate unchecked,” Todd Spencer, executive vice president of OOIDA, said in a statement. “Too often, we’ve seen deceitful brokers get away with collecting payments from shippers but cheating truckers out of what is rightfully theirs.”

A similar bill introduced in the Senate last year, the Motor Carrier Protection Act, failed to muster enough support to clear the Senate Commerce Committee.

Robert Voltmann, TIA’s president and chief executive officer, said the three trade organizations had common ground in toughening up the broker requirements.
“The motor carriers are stung by companies that take freight, flip it to somebody else, and don’t pay,” Voltmann told Transport Topics. “We want the truck driver paid. We want the truck company paid.”

Voltmann refuted the notion that the bill would put small brokers out of business. “What it will squeeze out are underfunded or undercapitalized brokers,” Voltmann said. “A $100,000 bond to move DOD freight costs $1,500. If you can’t afford $1,500, what right do you have to collect someone else’s money? You shouldn’t start a brokerage if you don’t have proper capitalization.”

But Daniel Larson, chief operating officer of Pacific Financial Association Inc., the nation’s largest provider of property broker surety instruments, said the bill would not reduce broker fraud and not be good for the transportation industry.
“Our statistical information indicates that a $100,000 bond is unnecessary and will force too many brokers out of business,” Larson told TT.

Larson said Pacific handles more than 10,000 claims a year, and most broker defaults would be “well handled” with a $20,000 bond.

Very few brokers get into the business with the intent of committing fraud, he said, and many payment problems are the result of a carrier who, for example, has a shipper that goes bankrupt, in turn causing the carrier to “get upside down.”
“Truckers think they’re going to get saved by these bonds,” Larson said. “History points out that you get saved by doing business with people that you know, you respect, or who you’ve properly vetted.”

The bill will require “just about every single motor carrier to get broker authority,” Larson added. “How many small truckers do they think can afford a $100,000 broker bond?”

ATA spokesman Sean McNally said a majority of ATA carriers have agreed that the positives in the bill outweigh the negatives and that ATA should support it.
“ATA strongly supports the legislation’s increase in the broker bond to $100,000,” McNally said. “That increase, along with the stricter regulatory oversight of brokers required by the bill, will go a long way to remedying the problem of motor carriers not getting paid by unscrupulous brokers.”

But McNally conceded that other requirements of the bill, notably that motor carriers no longer can broker loads under their motor carrier authority, create concerns for some motor carriers.

“Unfortunately, ATA was not able to secure any modification of that language from the coalition supporting the bill,” McNally said.

David Owen, president of the National Association of Small Trucking Companies, called the legislation “a horrible way to go” and said it is designed to help “mega-brokers.”

Owen said the higher bond won’t stop fraud. Most small carriers that broker deals are honest and use their brokerage to be more efficient and retain contracts, he said.

“It’s horrible to have an industry where a few crooks can go out and intentionally rob trucking companies. I think that’s a shame,” Owen said. “But most carriers, it only happens to once. The next time, they check the guy out a little better.”

1 comment:

  1. The FMCSA has asked its advisory committee to examine concerns about violation severity in the agency's safety program and to help develop wireless Internet-based logging device technologies.


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