Friday, August 1, 2014

SMS Website Enhancements

Critics of SMS Methodology and its publication for use by "stakeholders" have reason to be concerned about the Agency's recently announced "enhancements." The public, shippers and brokers including plaintiff's bar, with a click of the mouse will be able to see a listing of all carriers with better percentile rankings than their preferred carrier vendor in each of the BASICs.  In furthermore of Plaintiff's Bar's argument that the consumer must second guess the Agency's ultimate safety fitness determination, this enhancement will make it all the easier for Plaintiff's Bar to argue that a shipper or broker was negligent in not selecting the safest carrier available based upon the Agency's readily available listing of all competitors by percentile rankings and peer groups.

Yet for skeptics of SMS Methodology, the new "transparency and accountability" which the enhancements incorporate will offer a treasure trove of new minable data. Students of SMS Methodology have long recognized that artificial peer grouping based solely on number of roadside inspections resulted in comparing and ranking of carriers, introducing variable factors which invalidated any statistical comparison between true peers. The geographical and enforcement anomalies, the peer grouping of busses with trucks, OTR carriers with hundred mile radius carriers which do not log, intermodal carriers are obvious examples.

The Agency and its MCSAC have noted the peer group creep phenomenon which can cause a small carrier's scores to increase by 30 or more percentile points as it migrates from one peer group to the next even though the tipping point results from a clean inspection.

Now that all of the data of all of the peer groups will apparently be made public, the harsh reality of the system's basic flaws and inequity will be clear for all to see.

A prototype study conducted by members of the The Expedite Association of North America (TEANA) poignantly demonstrates the types of methodological flaws students of SMS Methodology can expect to see. Over 2 ½ years ago, TEANA obtained a listing with percentile rankings of all 100 carriers in the jumbo Class 5 "straight truck peer group." The straight truck peer groups are artificially defined as carriers which have 30% or more straight trucks and unsafe driving is ultimately measured on miles traveled by all commercial motor vehicles. Traditionally among the carriers with the best scores are truck leasing companies a tree trimming service and local retail delivery services, a dissimilar lot from the higher ranked OTR expeditors which comprise TEANA.

TEANA members complained loudly to the Agency that this mis-peer grouping was a result of an arbitrary construct which should be rectified, pointing out that with the same number of inspections and miles run if properly peer grouped with their OTR counterparts, percentile rankings would fall by in excess of 40 or 50%. Although supported by examples. TEANA's lament has been consistently ignored.

At the time of the initial study, another important segment of the trucking industry was profiled as "bad actors" with high scores in jumbo straight truck unsafe driving BASIC. Eleven of the major household good movers were listed in the group in May 2012 and none had a score under 74 -- Everyone was in an alert status!

Twenty-six months later, none of the 11 show an alert status in unsafe driving. In fact, one shows a 1 month improvement from 96.1% to 12.5%.

How have the van lines accomplished such a great improvement in the critical unsafe driving BASIC, you ask?

The answer is simple. Not a one of them is left in the straight truck jumbo peer group. Whether by adding more combination units or reducing their straight truck fleet to get under the 30% ranking, the van lines all fall in the combo peer group and their average have declined by an average of 69 percentage points! This fall in scores certainly doesn't suggest that the van lines have done anything wrong. Most probably many have simply required their agents to acknowledge and accept safety responsibility for the smaller pickup and delivery vans they operate to lawfully exit the anomalous peer group.

Yet, as this preliminary study shows, the Agency's peer groupings and percentile rankings contain more than anecdotal inequities of relative insignificance which can be ignored.

Most of the peer groups are much larger than the jumbo straight truck group. Yet data miners will have a field day with the increased data which will soon be available.

For lawyers which must defend shippers, brokers and carriers in accident suits, it should be a whole lot easier to exclude SMS Methodology as having no statistical or probative value.

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