WASHINGTON — Major trucking corporations and brokers who book their freight are pressuring the Federal Motor Carrier Safety Administration to connect a security rating to carriers operating without such a rating — a situation that exists for over 90% of the freight market.
The priority comes as FMCSA looks at developing a brand new strategy to confirm when a motor carrier is fit to operate trucks in interstate commerce, generally known as a security fitness determination (SFD). The agency issued a preliminary advance notice of proposed rulemaking (ANPRM) in August to get public feedback on whether and how you can revamp its current rating methodology.
FMCSA’s own statistics red-flags the issue. Of 690,091 interstate freight carriers eligible for an FMCSA safety rating in 2021, 646,777 — roughly 94% — didn’t have a rating, based on the agency’s most up-to-date annual safety data, published in December 2022.
“A system that rates lower than 10% of the eligible population is unacceptable,” wrote Lane Kidd, managing director of the Alliance for Driver Safety & Security, generally known as the Trucking Alliance, in comments responding to the proposed rulemaking. The group consists of nine of the country’s largest truckload carriers, including J.B. Hunt (NASDAQ: JBHT), Knight-Swift (NYSE: KNX) and Schneider National (NYSE: SNDR).
“These unrated carriers are treated disparately by brokers and shippers who must depend on other metrics to make necessary safety-based business decisions,” Kidd stated.
The Transportation Intermediaries Association, which represents truck brokers and 3PLs, agrees.
“TIA supports a speedy rulemaking because one of the crucial significant challenges for the third-party logistics industry is the way wherein motor carrier safety rankings are currently getting used by personal injury lawyers, insurers, and the media, amongst others,” said TIA Vice President of Government Affairs Chris Burroughs in comments filed with the notice.
“The misuse of safety rankings, which manifests itself in nuclear verdicts, higher insurance rates, and reputational damage is particularly acute in light of the proven fact that 90% of motor carriers are currently considered ‘unrated’.”
FMCSA admits to regulatory loopholes
FMCSA’s current SFD system relies on data collected during a compliance review investigation, conducted either on-site on the motor carrier’s place of work or remotely through a review of its records using a secure portal.
After analyzing six aspects — which incorporate crash involvement and hours of service violations — a carrier is assigned certainly one of three safety rankings: satisfactory, conditional or unsatisfactory.
But due to loopholes within the system, a carrier isn’t prohibited from operating with a conditional rating despite the fact that a review revealed a security breakdown. For instance, a carrier with a documented noncompliance in vehicle maintenance and controlled substances testing would receive a proposed conditional rating. If the proposed rating becomes final, it still allows the carrier to proceed operating.
FMCSA also admits that the present SFD process strains agency staff, reaching only a small percentage of carriers. That leaves the bulk with out a rating in any respect, organising the potential for an enormous variety of unsafe trucks operating on the highways at any time.
“Since the agency has resources to issue safety rankings to only a small percentage of motor carriers every year, a security rating doesn’t necessarily reflect the present safety posture of a motor carrier,” the agency acknowledged within the ANPRM.
Potential solutions lack consensus
Most groups representing carriers, shippers, brokers and safety advocates agreed that the present system was broken and needed to be made simpler and more clear, but differed on how you can make that occur.
Solutions ranged from using a single “unfit” category, advocated by the Business Vehicle Safety Alliance in addition to proposed previously by FMCSA, to expanding to a five-point number system, supported by Tesla (NASDAQ: TSLA).
“The present system is confusing and never intuitive,” commented Madan Gopal, staff safety strategy engineer for the Austin, Texas-based company, which is ramping up production of its long-delayed Semi electric truck.
“Also, the meanings of ‘unsatisfactory’ and ‘conditional’ could also be confused with each other. A five-point system, with 1 assigned to ‘conditional’ and 5 assigned to ‘unfit-out of service’ could also be more comprehensible.”
In between CVSA and Tesla is a call, by TIA, to maneuver to an easy fit/unfit rating system.
“For a few years, TIA has been a powerful proponent of a “red light/green light” system for using motor carriers as an alternative choice to the present, confusing and conflicting” system, Burroughs asserted.
“Not providing a security rating of some kind for each carrier would proceed the confusion and ambiguity that exists in the present [process]. This necessary change isn’t only essential to eliminating unsafe motor carriers from the road but additionally eliminating confusion within the marketplace as to what the present rankings mean.”
The National Industrial Transportation League, a shipper group supporting TIA, commented, “Think what number of bad actors could be put out of business if shippers and 3PLs were told not to make use of them (unfit). A straightforward binary safety rating system that distinguishes a fit or unfit carrier will help clear up an important deal of confusion.”
But several carrier groups — the National Motor Freight Traffic Association, representing LTL carriers; the National Association of Small Trucking Corporations, which represents small-business carriers; and the National Private Truck Council (NPTC) — imagine FMCSA should retain its three-tier system.
Amongst reasons cited for keeping three categories versus a binary system, NPTC asserted that eliminating “conditional” as a rating would mean carriers currently holding that status “could be compelled to suspend operations until such time because the agency could conduct one other compliance review and reconsider the protection fitness rating, at any time when that is likely to be,” the group stated.
“It essentially forces the corporate out of its trucking operations.”
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