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Regulatory Challenges in

the Motor Carrier Industry

 Tom Sanderson, CEO, Transplace

Logist ics Management Series: What Moves You?July 11, 2013

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CSA/SMS Key Messages

Shippers and brokers should not use CSA/SMS data toselect carriers

•  You are needlessly exposing yourself to additional vicarious liabilityand 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 themaccess to freight, and exacerbating the upcoming capacity shortage

•  You are costing your company money by not using federallylicensed, authorized and insured carriers

Over half of all carriers with BASIC scores have an “Alert”

FMCSA should stop publishing scores and should abandonefforts to mathematically determine carrier safety ratingswith no due process for carriers.

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1. Misleading data - SMS scores have no correlationwith individual carrier accident frequency.

2. Incomplete data - only large carriers are measuredby 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 thesystem

Four Major CSA/SMS Flaws

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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

Source: Statistical Issues in the Safety Measurement and Inspection of Motor Carriers; J ames Gimpel,University of Maryland; J uly 2012

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 carriersR2 = .021; .028; .071

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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 yearper 100 power units, but lacks precision for individual carriers

Source: Statistical Issues in the Safety Measurement and Inspection of Motor Carriers; J ames Gimpel,University of Maryland; J uly 2012

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Transplace Analysis Proves

No Correlation

Source: Transplace analysis; 28,235 carriers Unsafe Driving, 47,618 carriers HOS Compliance

Regression of individual carriers

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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 analysis8

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 Total

Carriers

Inspected

Carriers42%

Carrierswith a Score

11%

Carrierswith an Alert

6% / 55%

CSA SMS Data Summary 3/2013

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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 analysis10

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 Alerts by Carrier Size

• Even for large carriers, 43% can’t clear the limbo bar• Small carriers lose under SMS methodology

FMCSA Data – March 2013, Transplace analysis

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Do we need increased shipper and brokerliability to improve safety?

Do we need to blackball from use half of the motorcarriers which the Agency can find and monitor?

Trucking Industry Safety Record

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     F    a    t    a     l     i    t     i    e    s    p    e    r     1     0     0    m     i     l .    m     i     l    e    s

Total Large Truck Fatalities 

Fatalities per 100 Million Vehicle Miles Travelled(millions)

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