Regulatory Challenges in the Motor Carrier Industry

Tom Sanderson, CEO, Transplace Logistics Management Series: What Moves You? July 11, 2013

CSA/SMS Key Messages

Shippers and brokers should not use CSA/SMS data to select carriers
You are needlessly exposing yourself to additional vicarious liability and negligent selection lawsuits The SMS scores have no relationship to accident frequency You are not contributing to better highway safety You are harming small businesses (carriers) by denying them access to freight, and exacerbating the upcoming capacity shortage You are costing your company money by not using federally licensed, authorized and insured carriers Over half of all carriers with BASIC scores have an Alert

FMCSA should stop publishing scores and should abandon efforts to mathematically determine carrier safety ratings with no due process for carriers.
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Four Major CSA/SMS Flaws

1. Misleading data - SMS scores have no correlation with individual carrier accident frequency. 2. Incomplete data - only large carriers are measured by SMS. 3. Unactionable data over 50% of measured carriers are branded with an Alert. 4. Unfair data - When small carriers are measured, the deck is stacked against them. Regional differences and minor infractions undermine the system

Transplace 2013. All contents confidential.

Wells Fargo Expands Sample Confirms Earlier Results

Source: Wells Fargo, CSA: Another Look With Similar Conclusions, 7/2/2012 (>24 trucks and >49 inspections)
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Gimpel Study Confirms No Correlation

Data set broken into peer groups by number of inspections; 9-21; 22-57; and 500+ inspections shown Sample size 5,564; 8,998; and 3,351 carriers R2 = .021; .028; .071
Source: Statistical Issues in the Safety Measurement and Inspection of Motor Carriers; James Gimpel, University of Maryland; July 2012
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Gimpel Study Confirms No Correlation

Data set broken into peer groups by number of inspections; 3-10; 11-20; and 500+ inspections shown Sample size 6,598; 9,578; and 763 carriers R2 = .000; .003; .213
Large carriers: 10 point increase = 0.5 more accidents per year per 100 power units, but lacks precision for individual carriers
Source: Statistical Issues in the Safety Measurement and Inspection of Motor Carriers; James Gimpel, University of Maryland; July 2012
Transplace 2013. All contents confidential.

Transplace Analysis Proves No Correlation

Regression of individual carriers

Source: Transplace analysis; 28,235 carriers Unsafe Driving, 47,618 carriers HOS Compliance
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FMCSA Carrier Size Data

93% of carriers have 10 or fewer trucks 99% of carriers have 50 or fewer trucks 49% of all vehicles are in fleets of <50 trucks

FMCSA Data March 2013, Transplace analysis

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CSA SMS Data Summary 3/2013

Total Carriers

Inspected Carriers 42% Carriers with a Score 11% Carriers with an Alert 6% / 55%
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SMS Data by Carrier Size

Only 12% of all carriers are measured Only larger carriers are being measured Measured carriers account for only 57% of all trucks

Note that the total population of carriers drops to 744k for carrier size analysis FMCSA Data March 2013, Transplace analysis
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Alerts by Carrier Size

Even for large carriers, 43% cant clear the limbo bar Small carriers lose under SMS methodology

FMCSA Data March 2013, Transplace analysis

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Trucking Industry Safety Record

Do we need increased shipper and broker liability to improve safety?
TotalLargeTruckFatalities
7 6

Fatalitiesper100mil.miles

5 4 3 2 1 0

Fatalitiesper100MillionVehicleMilesTravelled(millions)

Do we need to blackball from use half of the motor carriers which the Agency can find and monitor?
Transplace 2013. All contents confidential.

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