Legal Defense and Other Hot Button Issues for the Trucking Industry
Well, by now we are pretty much well versed on the long battle over the new Hours of Service regulation and the fact that it has been implemented and binds us going forward. So what are we going to do about it and what can we expect? Much has been said about the reg lately and, frankly, I don’t think the conflict has ended. But until then…I wanted to provide my own take and throw some thoughts out there to be considered.
How Did We Get Here?
FMCSA proposed a Final Rule changing the Hours of Service regulation on December 27, 2011. After much fighting, the reg became effective on July 1, 2013. Initially, FMCSA pushed to cut the maximum driving time from 11 to 10 hours, but eventually backed off when it couldn’t come up with the data to support a benefit. However, FMCSA did continue to push for a modified 34 hour restart (to be used only once every 168 hours and include 2 periods of 1 a.m. and 5 a.m.), and for a 30 minute break to be taken within an 8 hour driving time.
As early as December 2011, before the Final Rule was published, the industry has been warning everyone that will listen of the costly effects that the new reg could have on companies and the economy. One trucking company told Congress back then that the reg would cut revenues by 17%, while a shipper stated that it would end up paying 3% more for shipping, which ultimately would be passed on to customers (i.e. Joe Public). However, FMCSA continued to tout that the new reg would cut fatigue-related crashes by requiring drivers to get more rest than they did under the previous reg.
Fast forward slightly to June of 2013 when Steve Williams, CEO of Maverick USA, told Congress that the motivation of FMCSA to change the reg was not based on sound evidence. Or as one Congressional representative put it, “it’s a solution in search of a problem.” Williams pointed out that the reg could result in a 1.5-4% reduction in productivity, or in dollars, between $500 million to $1.4 billion lost.
Williams’ testimony before Congress was not just a talking head either. Just before the testimony, ATRI released a study showing FMCSA “greatly overestimates the benefits…[while] ignoring the productivity losses that all driver-types will experience under the new HOS rules.” While FMCSA has projected a benefit of $133 million from the restart provision, ATRI estimates a loss between $95-376 million. ATRI attributed the difference to the fact that FMCSA ignores costs related to increased congestion on the roadways and increased restart times for a larger percentage of the driver population (FMCSA data only focuses on the 15% of drivers with the most intense driving schedule as having fatigue-related issues, leaving of course 85% of the drivers without issues to be penalized under the reg). Finally, ATRI predicted that the reg could affect shipper costs, scheduling issues and a driver shortage (there’s those words again!).
And as we all know, on August 2, 2013, a federal appeals court upheld the 34 hour restart and 30 minute break provision. While the FMCSA hailed the victory as recognizing “the sensible data-driven approach that was taken in crafting this important regulation to increase safety and reduce driver fatigue”, I would contend that the Court viewed the win a little differently than FMCSA when it stated “though the FMCSA won the day not on the strengths of its rulemaking prowess but through an artless war of attrition, the controversies of this round are ended.”
So Is That It?
Following the Court of Appeals decision upholding most of the new reg, many felt the “decision has put the issue to bed for now.” But…
As part of MAP-21, Congress directed FMCSA to conduct a field study on the 34 hour restart to back up its supposed lab data on the benefits for fatigue. However, FMCSA is woefully behind schedule on providing that field study and now certain members of Congress are introducing legislation to pull funding for enforcement of the reg without the study. Let’s stay tuned to this.
So What Are We Seeing?
One company recently stated that the new HOS reg. has cut productivity by 2-3% overall, and 6% for its drivers. Drivers are working longer hours in order to make the same money, but more importantly, drivers are more frustrated and stressed trying to abide by the new reg. And as a result, some experienced drivers are just calling it quits.
Other companies are experiencing scheduling difficulties. If a driver runs out of hours on a Wednesday, the truck sits on Thursday and Friday, and most customers don’t ship on Saturday or Sunday. Now companies and drivers are working in a 3 day work week.
And ATRI has backed this up as well. On November 18, 2013, ATRI released a comprehensive survey on the effect of the HOS reg since July finding that 80% of carriers suffered a loss in productivity. Most importantly, for my purposes on liability at least, ATRI found that drivers were actually experiencing HIGHER FATIGUE LEVELS! 82% of drivers surveyed stated that the new reg has had “negative impact on their quality of life, with more than 66% indicating increased levels of fatigue.” (I’m not the sharpest knife in the drawer, but it doesn’t seem to me that the FMCSA got this one right!)
So What’s My Take?
In addition to the lost productivity and cuts to revenues that the new HOS reg creates, I also see some increased liabilities on the roadway. I believe they look something like this:
1. Attacks on driver training. A savvy plaintiff’s attorney will likely go straight to the driver training that was given on the new HOS reg, particularly when a HOS violation exists for that driver, however irrelevant to an accident. Companies need to begin providing detailed training, and testing to determine comprehension, on the new reg. This includes training for dispatchers as well. The last thing you want is a dispatcher sending a driver out mistakenly believing he had remaining hours to drive.
2. Policies and procedures. A favorite of plaintiff’s attorneys is to depose a corporate representative and ask if a driver has adhered to all the company policy and procedures. Plaintiff’s attorneys use this information, and any policy violations, to establish an unsafe company. It is imperative that all company policies reflect the new HOS requirements; otherwise you risk being painted as a rule-breaking company.
3. Fatigue is actually increased. As stated above, one of the biggest repercussions that ATRI identified is increased fatigue since the new reg went into effect. And this is easy to understand when you know what fatigue is and why it happens. Because of difficulty complying with the regs, meeting increased demands and worrying about a loss of pay, drivers are experiencing increased stress. And what is the symptom of long-term stress? You guessed it…fatigue. When you are fatigued, you experience a dulling of your senses, which then increases your inattention to detail. While adequate sleep may have a nominal effect on fatigue, if you don’t address the core problem causing fatigue (i.e. increased stress from horrible regulations), it will never resolve but instead result in chronic fatigue. Rip Van Winkle doesn’t stand a chance in this environment. So it’s a catch 22. You abide by the rules, you risk having the new research like ATRI’s used against you for increased fatigue. Yet you break the rules and, well, you know what happens.
4. Inexperienced drivers. Without opening up the driver shortage debate, to the extent that the new reg is causing some experienced drivers to choose a different profession, or retire, new drivers will have to be found. And the best training program in the world can’t replace miles traveled. I am fearful that the more inexperienced drivers that have to be hired, without the benefit of experienced mentors, could lead to more accidents. I made mistakes as a young attorney, and only time taught me how to avoid some of them. Biggest difference…my mistakes weren’t behind the wheel of 80,000-pound missile!
5. 5 A.M. start times. Because of the restart provision, it naturally lends itself to more trucks being placed on the road around 5 a.m., the start of the most congested time of the day. Drivers may experience increased stress being forced onto the highways at heavily congested times, possibly becoming more accident-prone. Statistics exist for a reason…the more times you do something, the more likely over time that you will begin to see a pattern. Our drivers are very safe in their trucks, but accidents happen. The more trucks and more passenger cars that are forced onto the road during morning hours because of the reg, the more accidents are going to occur. Its just statistics!
6. Increased cargo claims. Shippers have reported that the combination of the new HOS reg and CSA has reduced on-time deliveries by 4-5%. With on-time deliveries negatively effected, its logical to expect that time-sensitive cargo and business delays may increase, resulting in more claims between carriers and shippers.
7/28/2014, Joey Slaughter
Transport Topics just released their list of the top 100 for-hire carriers. There was nothing really surprising to me on the list, but some people may be surprised to see who’s on there and who’s not. Due to the nature of a blog, I can’t go over the entire list, but here is the top 10 and their revenue:
1. UPS, Inc.($55.4 Billion)
2. FedEx Corp.($45.1 Billion)
3. J.B. Hunt Transport Services($5.6 Billion)
4. Con-Way, Inc.($5.5 Billion)
5. YRC Worldwide($4.9 Billion)
6. Swift Transportation($4.1 Billion)
7. Schneider($3.6 Billion)
8. Hub Group($3.4 Billion)
9. TransForce, Inc.($3 Billion)
10. Landstar System($2.6 Billion)
Here are some interesting points that put these numbers into context.
• UPS and FedEx’s combined revenue of 100 billion exceeds companies 3-100 combined (98 billion) Knowing how large a billion is, there’s a good chance that the big 2 has revenue that would exceed companies 3-500 if such things were measured.
• Out of the top 10, only 3 companies are primarily long haul, U.S. OTR operations; Swift, Schneider and Landstar. TransForce is a Canadian powerhouse with OTR companies within, but I’m not sure of their primary segment.
• J.B. Hunt and Hub Group earn their revenues primarily through the intermodal/drayage sector, not trucking.
• UPS and FedEx are primarily package couriers with their LTL and logistic operations rounding out the massive behemoths. There are many other companies under their umbrella, but the package courier, LTL and logistic operations are the dominant companies within.
The following statistics (from OOIDA) add even more context to the industry as a whole:
• 97% of all fleets are 20 trucks or less
• 90% of all fleets are 6 trucks or less
If you are an owner-operator leased to a carrier, you are counted with their numbers. Even though, my little one truck, trucking company is but a grain of sand on the beach of large carriers, I stand with the majority of small trucking companies that are moving the bulk of our nation’s freight.
FOR IMMEDIATE RELEASE
Contact: Dan Murray
(651) 641-6162
July 31, 2014
The American Transportation Research Institute (ATRI), the trucking industry’s not-for-profit research organization, today released its newest study, Evaluating the Impact of Commercial Motor Vehicle Enforcement Disparities on Carrier Safety Performance. According to Steve Niswander, Vice President, Safety Policy & Regulatory Relations of Groendyke Transportation and ATRI Research Advisory Committee (RAC) Chairman, “This assessment was ranked as the number one research issue for the industry during our annual RAC meeting in 2013 and its impact on the industry should be significant.”
This landmark analysis documents the necessity for some flexibility in developing enforcement strategies specific to a state’s needs, but also confirms that state enforcement disparities create uneven safety playing fields for carriers that have different operating patterns and mileage exposure in the lower 48 states.
Furthermore, the different priorities and violation issuance rates across states dramatically undermine the uniformity of CSA – a supposedly standardized safety assessment program. By simply crossing into an adjoining state, carrier BASIC scores can change markedly. For example, ATRI’s model calculated one carrier’s Hours-of-Service percentile decreasing by 4.2 points, but their Vehicle Maintenance percentile increasing by 12.2 points if state violation rates were normalized. Finally, based on two nationally recognized violation lists most closely associated with future crash risk, ATRI’s research documents considerable variability in state emphasis on those violations that generate the greatest safety benefit.
ATRI’s research findings generate from four specific tasks:
State Data Metrics Compendium which compares and contrasts several dozen safety and operational metrics for the lower 48 states.
Relating Violations to Crash Risk Analysis reveals that while certain violations have a stronger relationship to crash risk, these violations may not be equitably emphasized across states.
State Enforcement Objective Case Studies evaluate the impact of six specific state enforcement priorities on actual safety outcomes.
Carrier Case Studies quantify the impact of state enforcement disparities on specific motor carrier safety measures within the Safety Measurement System (SMS), based on an ATRI-developed model that assesses the impact that standardizing state enforcement activities would have on SMS scores across seven carriers.
“ATRI’s study unequivocally quantifies what we know is a serious defect in the CSA scoring system – that carrier safety performance as represented by BASIC scores can be dramatically impacted by the states in which a carrier operates based on nothing more than the states’ varying enforcement priorities. Until these disparities are rectified, peer-based comparisons within CSA’s scoring system will continue to be flawed and of little value as a tool for monitoring carrier and driver safety performance unless accounted for properly,” commented Brett Sant, Knight Transportation’s Vice President of Safety and Risk Management and a member of ATRI’s Research Advisory Committee.
A copy of the study results is available here.
ATRI is the trucking industry’s 501(c)(3) not-for-profit research organization. It is engaged in critical research relating to freight transportation’s essential role in maintaining a safe, secure and efficient transportation system.
Fleet executives speaking at the CCJ Summer Symposium in La Jolla, Ca., today said their experiences implementing electronic logging devices have been overwhelmingly positive for their businesses, customers and drivers.
The panel was moderated by CCJ‘s Technology Editor, Aaron Huff, and consisted of Neil Smith, Vice President, operations, Western Area, Con-Way; Jim Gomez, Jr., Vice President, operational compliance, John Christner Trucking and Scott Baker, Vice President, recruiting and driver development, Swift Transportation.
The first point all three participants agreed upon was that the process of implementing e-logs was not cheap and did not occur quickly. In the case of Swift – an admittedly large carrier – Barker noted that the process to introduce e-logs took six quarters – a full year and a half – to complete.
Smith noted that a mandate is likely coming and, based on Con-Way’s experience, said he would recommend that fleets get ahead of the curve now before they “have a gun to their head” and have to meet government-implemented deadlines.
“It’s a lengthy, complicated process,” he noted. “And it’s hard enough to do without having to worry about meeting a deadline to be in compliance with federal regulations.”
Training and equipment installation were two implementation bottlenecks all three panelists experienced.
“We wanted our own technicians trained to install the equipment,” Barker said, “so that added some time to the process. But once they were ready, we began installing equipment as our trucks came through the shops for maintenance. It was a constant flow of activity over a year and half. But even though it was a very extensive process, that went off very well. Honestly, after a time, even most resistant drivers saw what e-logs could do for them and today, they don’t like it all if the system goes down and they have to go back to keeping paper logs.”
According to Gomez, e-logs have become a powerful management tool for John Christner in that they allow quick and accurate matching of drivers with available hours and loads.
“To better manage our data flow, we contracted with a third-party company that provides a service platform showing us our driver’s virtual hours in real time,” he says. “We can also use this system to project those hours out over coming days to see what a particular driver’s hours look like right up unto the load is delivered. We’ve never had that capability before.”
Smith agreed, adding that initially drivers pushed back against the e-log initiative drivers.
“They felt it was a ‘Big Brother’ issue and wanted to know why we needed the government watching everything we did,” he said. “But, they found that it actually enhanced their productivity and paychecks. Because it allowed us to manage them better by matching them up with loads while they still have hours left in the day.”
Every Safety Director that I know lives in dread of a school bus accident. The thought of one of their trucks getting tangled up with a school bus is a nightmare, regardless of which driver is “at fault.”
Every employee of your company, from the CEO to each of your drivers, is a compassionate human being. No one wants to see a child hurt. Worrying about a school bus accident can make you, a dedicated and professional Safety Director, an unhealthy insomniac. In order to get some sleep (after reviewing your truck driver hiring practices), you should develop your own company’s media plan.
You say that you are too small of a company to have a fancy “media plan”? Hopefully, you will never need such a media plan. But, if a noteworthy crash happens on your watch, you (as the Safety Director) will likely get pushed into the media spotlight. Being prepared and being empathic might determine if you retain your job after a noteworthy accident.
A media plan does not have to be complicated or outsourced to a high-priced media consultant. Simplicity is the key for you to remember your plan and then to implement it. A media plan has one purpose with five distinct components.
Purpose: The purpose of your media plan is to professionally identify your company as a safe and committed group of people. The media must tell a compelling story very quickly. All media – television, radio, newspaper and internet news – works off of the same newspaper article structure:
Who, What, When, Where and How.
The 5 components of your plan
Who #1 – Talk with your CEO and all department managers about your plan. Make certain that they all know the identity of your media representative. Typically, the CEO or the Safety Director is the natural choice for this important responsibility. Make certain the other company employees know that they should NOT interact with the media and that they should direct the media to you.
Who #2 – When first talking to the media, identify your company without giving the name of your involved driver. Your driver should be protected, at least initially. Have information on company’s history and safety record ready to impart.
What – Provide the basic details of the facts of the loss without inflammatory language. Know the type of accident it was (i.e. rear-end, overturn, t-bone) and exactly how many vehicles were involved. Do NOT speculate on the number of people injured or killed.
When – Much like the component of “what”, the “when” involves more details of the accident facts including at what time the accident occurred.
Where – Details of exactly where the accident occurred and possibly the name of any hospitals where the accident participants were transferred.
How – Do NOT guess or speculate as to the cause of the accident. Resist the temptation to tell everything you know. You can honestly answer questions without divulging the preliminary contributors to a crash until a full investigation is completed. You should be prepared to say: “We are not prepared to comment on the cause of this accident. We are working directly and actively with law enforcement officials to do a full investigation. It would be irresponsible for us to comment on the cause of the accident until all factors are fully investigated. We are aware that in many serious accident situations, in many cases the first reports prove to be inaccurate.”
Write it and follow your outline. Prepare a written outline with the basics of your company’s data. You are less likely to be misquoted if your statement is in writing. Avoid using industry slang or trucking buzz-words, as the general public does not understand trucking terms or trucking operations. Before meeting the media, practice what you want to say with a trusted staff member.
The basis of your initial statement should be a sincere care and concern for the accident participants and their families. You could refine this basic outline of your media statement: “The employees of ABC Trucking are shocked and saddened by this tragic accident. We offer our thoughts and prayers to all the accident participants and their families. We are diligently investigating all the facts of this accident. Additional details should be available shortly.”
Remember, you do not have to answer every media question in order to prove that you are a professional. I recommend that you tell your media contact that you have a statement, but do not have answers to all of his/her pending questions. Don’t say “no comment,” but do not get enticed into speculation. Recognize that there could be some uncomfortable pauses in the questioning. Don’t feel pressured to keep talking.
If you have sufficient time, coordinate your initial media contact with your defense counsel and your insurance company. These entities typically recommend that your company say nothing. However, a prepared statement of empathy and concern might be in your best interest.
Andy Sievers
Sievers Safety Services, LLC
Mahomet, IL
ajsievers@mchsi.com
(217) 714-1960
By Craig Ballantyne
In the summer of 2000 I was finishing up my master’s thesis in Exercise Physiology at McMaster University in Hamilton, Ontario (Canada’s ‘steeltown’). At the time, I lived with two buddies, and the only computer with Internet access in our house was in my friend’s room in his basement apartment.
One Saturday afternoon, after getting home from running tests in the lab, I noticed my roommate was out at one of his Kung Fu classes, and so I went down to look for job opportunities on a fitness website.
It was during this fateful Internet search that I stumbled across the email address of the fitness editor for Men’s Health magazine, the biggest fitness publication in the world. I decided to take a chance and send him my latest fitness email newsletter, even though it had only 150 subscribers.
A few days later the editor replied back, and wanted to use a piece from my article in an upcoming issue. Just like that I had instant credibility. This one opportunity would be the foundation for the exponential growth of my fitness information publishing business over the next 10 years.
It allowed me to become a leader in my industry, and that has made all the difference. And today we’re going to cover my favorite advanced leadership mindset and marketing tips I was taught by one of my mentors, Dan Kennedy. These 7 steps will help you break the 6-figure and even 7-figure barriers in your business by establishing yourself as leader in your industry and niche market.
1) You Must Have Extreme Self-confidence
Your business is not only about selling your product. It’s also about attracting people who want everything you have to offer. Your business is YOU. It doesn’t matter if you run a shop on main street in your town or a website serving people from all over the globe, you must be confident that what you bring to the world is unique and different from everyone else offering similar products.
2) You Must Take Action and Implement What You Learn
This step is not nearly as much fun as thinking big, but it is just as essential. The most successful people in the world are action takers. They don’t think too much, they just get it done. If you’re struggling with implementing what you know, then set more deadlines in your business. If you already have deadlines, cut them in half. Be bold. If you have a product planned for release in 3 months, cut that back and set a deadline of 2 months. You’ll find a way to get it done and you’ll be one step closer to being a leader in your industry. Life rewards action.
3) You Can Never Be Satisfied
You can never rest or try to sustain status quo. As Kennedy says, “You must be finding the replacement for the replacement.”
If you are a salesperson having a record year, you must still be looking into the future and planning for when sales aren’t as easy. You must continue to stay hungry and remain on top of the trends in your industry.
Likewise, if you’re an online information marketer, it doesn’t matter if you are getting 10,000 visitors per day to your site from Search Engine Optimization and affiliates, if you don’t keep coming up with new stuff, eventually your traffic will dwindle and your business will die.
Keep learning and networking, and never be satisfied as long as you remain in business.
4) Really Big Thinking – “Make no little plans”
This is my favorite step on the list. I just love to think big, and to plan and predict future opportunities for my business. It’s a great exercise to do on airplanes, because research shows we’re more creative when we get outside of our daily work environment – plus, it’s much more productive than watching a movie you’ve seen before.
When it comes to big thinking, always be conceive and believe that you will achieve great plans. You must be sure of yourself that you will dominate your chosen niche. You must not be afraid to create bigger and bolder ideas everyday and always be looking for markets where you can charge top dollar, and bigger projects and products that will allow you to do so.
5) You Must Work on the Macro and Micro Components of Your Business
Everyone wants to be the “idea guy”, but if you want to succeed you have to force yourself to be good at ideas, follow through, and details. You need to have every aspect of copy, product creation, and lead generation in place if you want to create a 6-figure or 7-figure income.
6) You Must Develop Multiple, High-Value Skills
It’s not enough to be just a good speaker, or salesperson, or product creator. We need multiple skills. First we have to identify an opportunity, then generate leads, then build interest in our prospects, then persuade our prospects to become customers, and finally deliver extreme value and service. Don’t just stop when you’ve become good in one area of expertise.
You also need to develop the skill of learning how to say NO. Too many folks spread themselves too thin, so you have to decide what projects are right for you and will advance your business.
7) Always Focus on Strategic Associations
If you sit at home and think you can avoid seminars and mastermind groups yet still develop powerful affiliate and business relationships, you are sorely mistaken. You need to be at seminars, having conversations in the hallways and at the bar, meeting new people online and offline.
Listen, by nature I’m an introverted person. A highly introverted person. I’d much rather read a book than introduce myself to a stranger. But guess what? Of all the strangers I’ve introduced myself to at the dozens of conferences I’ve attended, not one of them has bit me. And many of them have become friends, and a few of them have become lifelong business partners.
In fact, I might never have had my chance to run Early to Rise if it wasn’t for a Mastermind group I joined where I met Matt Smith, my business partner. So get out there. Go to seminars and events. Plan ahead and have a list of people to meet and questions to ask AND people that you can help. Never go empty handed or without a plan.
Follow those 7 steps to start building a serious business and you’ll soon join the ranks of leaders in your industry.
