Doug Marcello
WHY IT MATTERS: Risk reduction and denuclearization is not solely the responsibility of safety and risk departments. Every department can, and must, act within their powers to reduce exposure to liabilities. This is even more important in an era of deductibles/retention and captives. The all-out effort in every department protects the public, preserves company profits, and deflates an existential threat.
WHAT’S THE PROBLEM: There is a misperception that risk is limited to being a safety and risk department problem. Impose procedures. Minimize claims.
Moreover, safety and risk are misconceived as company burdens. They restrict profits. They erode the bottom line. Burdens.
While safety and risk lead risk reduction, it is company-wide effort. Every department can contribute. Do what they can to minimize exposure.
Unfortunately, these other departments are encouraged to the contrary. Sales to get loads. Recruiting to fill seats. Operations to route. Maintenance to keep wheels turning.
All these functions have elements of risk. Yet few companies encourage, let along focus, on reducing these risk bearing elements. In today’s environments, it is a “must” to do so.
WHAT CAN BE DONE: Safety and risk is not just external, addressing interaction with the motoring public and billboard lawyers. It is also an internal endeavor evangelized to all departments.
1. SALES-Risk-based pricing. Load pricing is market drive. But that pricing cannot ignore risk. The risk inherent in a load that goes to a litigious or accident fraught location.
I have clients that lament the costs of cases in “hellhole” jurisdictions. Yet, they priced the load to that location priced for less risky locations.
Sales must fulfill that role. Loads must be priced for the potential exposure. Or declined if the price does not factor the risk.
I know-easy for me to say as an attorney. But I’ve seen the alternative and the losses suffered by the failure to include risk or exposure in the pricing calculation.
2. RECRUITING-Exposure starts with drivers. Their actions, and their pasts, are potential detonators.
“Filling the seat” indiscriminately feeds the frenzy of the billboard attorneys. As I’ve said before, for them its not about the accident—it’s about the company. Systemic failures.
Questionable (dubious) hiring lobs them a soft one. The billboard attorneys can attack the company for hiring an unqualified driver to operate an 80,000 truck among the motoring public.
The defense starts with hiring. Qualified drivers. Defensible backgrounds. Training to address deficiencies.
Again, easy for me to say. But I’ve seen the alternative…and what it costs.
3. OPERATIONS: How can operations reduce risks? They just direct traffic.
Answer: a lot.
First, driver management is vital—HOS, fatigue, weather,… All of these are potential detonators.
Second, routing is risk related. Telematic companies provide insight into the most dangerous road, days of the week, times of day. These are invaluable insights that can minimize risk if employed in routing.
And one of the largest recent verdicts included an argument that weather should have been considered in routing.
Third, detention time. ATRI’s recent study found increased risk when there is excessive detention time. Not just rushing to make up time, but even enroute to get the load.
4. MAINTENANCE: Functioning vehicles reduce risk. Not just by avoiding failure caused accidents, but by minimizing driver distraction and rushing due to lost time.
Plus post-accident inspections that reveal per-accident defects are fodder for the argument of billboard attorneys that there is a systemic failure that requires a big verdict. “The company couldn’t even keep their vehicles compliant. How do you think the rest of the company operates.”
THE BIG THING: Multi-departmental safety and risk requires one overarching commitment-a safety culture. It starts at the top. With the folks who are responsible for, judged by, and profit from the bottom line.
In my current presentation, “Safety Profit”, I preach the message of this full court press by the entire company and all departments to protect profit…and the company itself. Management must buy in and make clear their commitment to the message. When that happens, safety and risk are no longer a burden. They are a profit. Keeping money on the bottom line by stemming the hemorrhage.
THE BOTTOM LINE: Safety and risk will determine your bottom line. But all departments can and must contribute. Make sure this message reaches all and is effectively enforced.
Increased insurance premiums have driven trucking companies to increase deductibles and amounts of retention.
Couple that with low margins. That makes safety and risk impactful on profits.
ATRI’s Operational Costs of Trucking for 2024 found that the total cost of risk, premium plus “out of pocket” is $0.135/mile; $5.43/hour. The impact is demonstrated by being seen from the perspective of the average profit margins.
Average non-LTL revenue? $3.707/mile. And operating margin? $0.111/mile and $4.471/hour. Less than the total cost of risk.
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Tyson Fisher
In 2020, Rep. Mike Bost, R-Ill., introduced a new bill that would devote funding for the creation of more truck parking. Five years later, he’s not giving up.
On Thursday, Feb. 27, Bost – along with Reps. Angie Craig, D-Minn., Pete Stauber, R-Minn., and Salud Carbajal, D-Calif. – reintroduced the Truck Parking Safety Improvement Act. If signed into law, the bill, HR1659, would dedicate $755 million to expanding parking capacity.
“I grew up in a family trucking business,” Bost said. “I know firsthand how difficult, and oftentimes dangerous, it can be when America’s truckers are forced to push that extra mile in search of a safe place to park. By expanding access to parking options for truckers, we are making our roads safer for all commuters and ensuring that goods and supplies are shipped to market in the most efficient way possible. This is a matter of public safety for everyone, and I’m committed to do all I can to drive this legislation over the finish line.”
Right out of the gate, the Truck Parking Safety Improvement Act has 26 co-sponsors. That includes a bipartisan, 50/50 split of 13 Democrats and 13 Republicans, ranging from Rep. Emanuel Cleaver, D-Mo., representing urban Kansas City to Rep. Jeff Hurd, R-Colo., who represents mostly rural Western Colorado.
Bost first introduced the bill in March 2020.
The Owner-Operator Independent Drivers Association worked closely with Bost to develop meaningful truck parking legislation that would garner support throughout the industry. OOIDA President Todd Spencer thanked Bost and Craig for continuing their efforts to address the nationwide parking crisis.
“Lack of safe truck parking has been a top concern of truckers for decades, and as a former truck driver, I can tell you firsthand that when truckers don’t have a safe place to park, we are put in a no-win situation,” Spencer said. “We must either continue to drive while fatigued or out of legal driving time or park in an undesignated and unsafe location like the side of the road or abandoned lot. It forces truck drivers to make a choice between safety and following federal hours-of-service rules. The current situation isn’t safe for the truck driver, and it’s not safe for others on the road.”
This will be Congress’ fourth chance to address truck parking by dedicating money that is already available to projects that increase capacity. The bill was first introduced in March 2020 in the 116th Congress. Although it died in committee with 14 bipartisan co-sponsors, the bill has gained more traction each year it was reintroduced.
In the 117th Congress, the truck parking bill picked up 39 co-sponsors and cleared the Transportation and Infrastructure Committee. However, it never made it to a vote by the full House.
The last version of the bill attracted 53 co-sponsors – 27 Democrats and 26 Republicans – and had a similar fate. It passed the committee with a 60-4 vote but never reached the full House.
The four committee votes against the parking bill were Reps. Thomas Massie, R-Ky.; Scott Perry, R-Pa.; Chuck Edwards, R-N.C.; and Eric Burlison, R-Mo.
The Senate version, spearheaded by Sen. Cynthia Lummis, R-Wyo., appeared in the last two Congresses. Although it picked up only two co-sponsors in 2022, more than a dozen signed on last year.
The Truck Parking Safety Improvement Act has enjoyed broad support from the trucking industry. Last year, more than a dozen trucking industry stakeholders led by OOIDA urged the House to move forward with the bill.
“Accessing safe and secure truck parking is an integral part of daily life for professional drivers, many of whom travel the nation’s interstates for weeks at a time,” the coalition told House leadership. “Members of Congress from every corner of the country and across the political spectrum have supported HR2367 because they understand their constituents are affected by truck drivers’ ability to meet necessary rest requirements and operate as safely as possible.”
Riky Von Honaker
As a follow up to last month’s article by Michael Nischan on FMCSA’s approved SMS changes, I am providing an assessment of the impact I believe these changes will have. These changes have the potential to significantly impact your scores, both positively and negatively.
I have categorized these changes into three groups: positive, neutral, and negative, based on my assessment. My opinions will primarily focus on the potential impact of these changes on lawsuits, broker interactions, and insurance premiums.
It’s crucial to remember that the CSA/SMS system’s primary objective is to identify carriers that require increased oversight, not to serve as the sole determinant of a carrier’s safety fitness by the FMCSA. Regardless of my opinion on each change, everyone in the industry should have a basic understanding of how this new system will function.
Positive Changes
- Violation grouping – As an example, during a roadside inspection you receive two violations “393.9T and 393.9TS” on your trailer. Because the turn signal is out on the trailer that violation would be marked “Out of Service.” Under the current scoring system both violations would be scored. However, under the new scoring system, as both violations are in the same group, “Lighting – Driver Observed”, only one violation would be scored. In this case the turn signal, as it is the more severe. I feel this will normalize some of the variances between inspections.
- Transferring all “Operating While Out of Service” violations to the “Unsafe Driving” Basic. This makes sense, as it is more of an Unsafe Driving issue rather than a Vehicle Maintenance, Hours of Service, or Driver Fitness violation when drivers continue to operate the vehicle after being placed out of service by an officer or operating while ill, fatigued or impaired.
- Splitting the Vehicle Maintenance Basic. Vehicle Maintenance violations will now be categorized by whether the FMCSA determined the driver should have observed the violation. There will be a new Basic labelled “Vehicle Maintenance: Driver Observed”. Currently there are 219 violations, of the 1,077 available, that would not qualify as driver observed, and those would remain in the Vehicle Maintenance Basic. While I think this is positive, I am curious as to how the determination is made. There are many violations not included in the driver observed category, that – as a former driver – I feel a driver should notice during a typical pre-trip inspection.
Negative Changes
- All violations having the same point value. The proposed system assigns 1 point to all violations, except for CDL Disqualifying violations or violations resulting in an out-of-service order, which are assigned 2 points.I strongly disagree with this approach. The current point values reflect the severity of the violation. For instance, a false log violation or driving beyond permitted hours of service should carry a higher weight than minor infractions like failing to update the trailer number or sign the log.
Under the new system, these violations would be treated equally if they didn’t lead to an out-of-service order. This is particularly problematic given recent CVSA OOS criteria changes. False logs and hour-of-service violations may no longer result in an out-of-service order under certain conditions, even when they pose significant safety risks.
- Proportionate Percentiles. Safety Event Groups have always been an issue when a carrier is near the top or bottom of that group. For example, if you have a measure of .50 for Hours of Service with 100 driver inspections, your Basic would be at 50% — well under the 65% threshold. However, if you have the same measure with 101 driver inspections, your Basic would jump to 74%. This would also increase your ISS score from 46 optional to 86 inspect. The new system states it would correct this issue by using “benchmark medians.” If it normalizes the jumps, I am behind this 100%.
- Removal From Percentage Calculation. Carriers that have not had a violation in the last 12 months would not be used in the calculation of percentiles.
There are some other changes that would only affect certain carriers. The current maximum average miles per vehicle to allow for a utilization factor is 200,000 miles per vehicle, which would increase to 250,000 miles per vehicle.
