Thursday, February 4, 2016

Warmed over SMS

For over a decade, the FMCSA has tried to develop a system to rate carriers based on roadside performance alone – depriving carriers of an audit and due process.

SafeStat, which had percentile rankings in 3 safety event groups or BASICs, was a bust.  So the agency created 7 BASICs, arbitrarily constructed peer groups, and started feeding the system with highly granulated, non out-of-service violations to increase the data count.

Without tying the resulting scores to a fair measurement of individual carrier performance, the agency went live with its scoring methodology in December of 2010.  It told the public on the one hand that the data is for our use in determining progressive intervention and, on the other, touted its rating system as intended and fit for shippers to use under peril of negligent selection liability.

From 2011 through 2015 the agency conducted over half a dozen informal “listening sessions” and “request for comments” as it tweaked SMS methodology but never addressed its critics – cut off – major and systemic flaws such as data inadequacy, enforcement anomalies, peer group creep, statistical flaws and due process issues.  All were presented to the agency but have never been addressed.

Finally, Congress intervened.  In the FAST Act it directed the agency to go back to the drawing board, conduct a thorough investigation of its roadside inspection methodology and issue a corrective action plan before proceeding to the rulemaking stage.  It also told the agency in no uncertain words that no major rulemaking could be issued until the effects on all aspects of the industry were considered.

Less than a month after the FAST Act was passed, the agency issued the Safety Fitness Determination which looks an awful lot like warmed over SMS methodology.  It is not something new or different which is not subject to all of the criticism which Congress said must be addressed in the corrective action plan.  It is the same roadside inspection data, the same weighted infraction methodology and it is based on the same self-serving and often discounted studies the agency has used over the past 10 years to justify SMS.

All that is really different is an acknowledgement by the agency that it cannot statistically measure accurately carriers with few inspections.  Higher but still arbitrary thresholds have been introduced.  In addition, the agency proclaims the relative measurement stick of percentile rankings has been removed, but actually it has retro-engineered the measurement system using percentile rankings to fix raw scores by safety event groups. 

All this effort that after 10 years of trials ostensibly to determine based on numbers alone that 320 carriers should be placed out of service?  That is what the agency states but there is more. Somehow this warmed over SMS will allow the agency to measure 75,000 carriers although they will not be assigned a safety rating. 

Get this.  The agency will still conduct audits and somehow will double the number of carriers found unfit as a result.  Apparently by employing the presumption that half their job is done as soon as any carrier peer group creep puts a carrier over the threshold in a single safety event group (deficiency in 2 is needed for an unfit finding on scores alone). 

So what is the long awaited Safety Fitness Determination all about?  Is it finding 320 carriers unfit based on the numbers?  Or is it a new calculus which admits that the agency will only declare carriers licensed, authorized and insured or unfit and out of operations?  What about SMS scores and the Congress mandated corrective action plan?  Is that even necessary?

Or is the rather surprising safety fitness rule just the nose of the camel under the tent since it seeks a finding that roadside inspections alone have a sufficient correlation to safety to place carriers out of service.  Would its passage forever establish for plaintiff’s bar that raw scores and percentile rankings are fair game in up supply chain lawsuits?  Moreover, look what is happening to treatment of the FAST Act in the process.  Although SMS methodology is tainted and subject to a corrective action study, it is the very process and data the agency relies upon to avoid the zero based cost benefit analysis and economic impact studies which the Administrative Procedure Act and the FAST Act require.

After 10 years in development, SMS has not been scuttled, it has been transformed as a proposed rule for a lifetime which the agency could largely recalibrate based on its own guidance.

The industry has 2 months to respond and make its case.  This improvident rule should be shelved.  The shipper and broker community deserves agency affirmation of the final rule that “Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49 C.F.R. Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation's roadways.”  This language is already in the NASTC et al. v. FMCSA settlement and in the FAST Act but the agency must be held accountable for not addressing this issue in the SFD rule.

Also, by ignoring crash preventability altogether, the agency seeks to turn a safety fitness determination into a question of roadside compliance without establishing an individual carrier’s nexus to safety or affording judicial appeal. 

ASECTT and a coalition of 7 trade associations will be analyzing the over 1,500 page agency docket of mainly conclusionary statements and previously rebutted warmed over SMS materials and needs your financial support.  Contributions can be made by going to

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