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TRANSCRIPT
Transportation & Logistics Council & Transportation Loss Prevention &
Security Association
April 23, 2012
2© Transplace 2012. All contents confidential.
• Maj. Gen. John B. Cooper is the Director of Logistics, Deputy Chief of Staff for Logistics, Installations and Mission Support, Headquarters U.S. Air Force• Legion of Merit with oak leaf cluster• Meritorious Service Medal with four oak
leaf clusters • Air Force Commendation Medal with
three oak clusters • Air Force Achievement Medal with oak
leaf cluster • Global War on Terrorism Expeditionary
Medal • Global War on Terrorism Service Medal
EOBR
Original Speaker
3© Transplace 2012. All contents confidential.
Technology and Service Offerings
4© Transplace 2012. All contents confidential.
• CSA/SMS• Hours of Service• EOBR• Mexico Cross-Border Trucking• Highway Funding• Size and Weight
Regulatory Headwinds
5© Transplace 2012. All contents confidential.
• Shippers and brokers should not be using CSA/SMS data to select carriers
You are needlessly exposing yourself to additional vicarious liability and negligent selection lawsuitsThe SMS scores have no relationship to accident frequency
- You are not contributing to better highway safetyYou are harming small businesses (carriers) by denying them access to freight, and exacerbating the upcoming capacity shortageYou 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.
CSA/SMS Key Messages
6© Transplace 2012. All contents confidential.
• Comprehensive Safety Analysis 2010 was intended to find, monitor and rate 750,000 carriers.
The program has been renamed Compliance, Safety, Accountability
• Intended to establish progressive intervention to save the Agency money on compliance reviews and to work with carriers before problems occurred.
• Has morphed into an unproven and unreliable set of data that is being used by shippers to credential carriers
Original Purpose
7© Transplace 2012. All contents confidential.
• Unsafe Driving — driving in a dangerous or careless manner. e.g., speeding, reckless driving, improper lane change, and inattention
• Fatigued Driving (Hours-of-Service) — drivers who are ill, fatigued, or in non-compliance with the Hours-of-Service (HOS) regulations
• Vehicle Maintenance — Failure to properly maintain a CMV • Driver Fitness — drivers who are unfit to operate a CMV due to lack of
training, experience, or medical qualifications • Controlled Substances/Alcohol — drivers who are impaired due to
alcohol, illegal drugs, and misuse of prescription or over-the-counter medications
• Cargo-Related* — Failure to properly prevent shifting loads, spilled or dropped cargo, overloading, and unsafe handling of hazardous materials
• Crash Indicator* — Histories or patterns of high crash involvement, including frequency and severity based on information from state-reported crashes
* Not published by FMCSA
Seven BASICs
8© Transplace 2012. All contents confidential.
Total Carriers
Inspected Carriers43%
Carriers with a Score12%
Carriers with an Alert7% / 56%
CSA SMS Data Summary 2/2012
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CSA SMS Data Summary
• Less than 10% of carriers have scores for any individual BASIC
• One percent or less of carriers have scores for Driver Fitness and Controlled Substances
Number PercentFebruary 2012 Data by BASIC MeasuredMeasuredCarriers with Vehicle Maintenance Percentile Score 73,173 9.6%Carriers with Fatigued Driving Score 49,711 6.5%Carriers with Unsafe Driving Score 31,941 4.2%Carriers with Driver Fitness Score 9,019 1.2%Carriers with Controlled Substance Score 2,410 0.3%
10© Transplace 2012. All contents confidential.
SMS Grading on a Curve • For Fatigued Driving BASIC, only 5% of
measured carriers are in top 20% and 32% are in bottom 20%
• 5 A’s and 32 F’s• Vehicle Maintenance: 10% in best 20% and
28% in worst 20%
0
10
20
30
40
50
60
70
80
90
100
1 5,001 10,001 15,001 20,001 25,001 30,001 35,001 40,001 45,001
Fatigued
Driving
Percentile
Number of Carriers
0
10
20
30
40
50
60
70
80
90
100
1 10,001 20,001 30,001 40,001 50,001 60,001 70,001
Veh
icle M
ainten
ance Percentile
Number of Carriers
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FMCSA Carrier Size Data • 92.6% of carriers have 10 or fewer trucks• 98.7% of carriers have 50 or fewer trucks• 50% of all vehicles are in fleets of <50 trucks
52.2%40.4%
6.1%
0.7%0.5%
0.1%
Carriers by Fleet Size
1 2‐10 11‐50 51‐100 101‐500 >500
8.0%
22.7%
19.3%
7.4%
14.2%
28.4%
Trucks by Fleet Size
1 2‐10 11‐50 51‐100 101‐500 >500
12© Transplace 2012. All contents confidential.
SMS Data by Carrier Size • Only 13% of all carriers are measured• Only larger carriers are being measured• Measured carriers account for only 57% of all trucks
5.0%
15.6%
50.6%71.8% 80.5% 88.9%
12.9%
0%
20%
40%
60%
80%
100%
1 2‐10 11‐50 51‐100 101‐500 >500 Total
SMS Data by Fleet Size
No Inspections in 2 Yrs No SMS Scores SMS Scores
Note that the total population of carriers drops to 694k for carrier size analysis
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Carriers Over the Limbo Bar
46%
37%
13%
5%
Number of Alerts
No Alerts 1 Alert 2 Alerts >2 Alerts
• Over half of all measured carriers are “Golden Triangle” carriers
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Alerts by Carrier Size
• Even for large carriers, 38% can’t clear the limbo bar• Small carriers lose under SMS methodology
33% 41%59% 68% 68% 62%
46%
51% 39%
26%20% 19% 25%
37%
0%
20%
40%
60%
80%
100%
1 2‐10 11‐50 51‐100 101‐500 >500 Total
Alerts by Fleet Size
No Alerts 1 Alert 2 Alerts >2 Alerts
15© Transplace 2012. All contents confidential.
SMS Scores Are Not Related to Carrier Safety Performance
Source: Wells Fargo, Anthony Gallo
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Wells Fargo Shows SMS Scores Are Not Related to Carrier Safety Performance
Source: Wells Fargo, Anthony Gallo
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FMCSA Claims Correlation Exists
Source: FMCSA: “Review of Wells Fargo Equity Research Report on Compliance, Safety, Accountability”
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Our Analysis Proves No Correlation
Source: Transplace analysis; 26,435 carriers Unsafe Driving, 35,933 carriers Fatigued Driving
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Small Carriers Create Noise in the Data
Source: Transplace analysis; 9,200 carriers Unsafe Driving, 7,700 carriers Fatigued Driving
Carriers With 25 or More Trucks
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Do we need increased shipper and broker liability to improve safety?
Do we need to blackball from use half of the motor carriers which the Agency can find and monitor?
Trucking Industry Safety Record
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Use of SMS methodology by shippers and brokers is a bad idea: If you use SMS data you:•Assume a duty and assume higher risk of non-compliance.
•Cannot stop introduction of SMS methodology or challenge its validity.
•Lose the ability to rely upon federal preemption and the government’s ultimate safety fitness determination as the gold standard.
Regulators not consumers should determine carrier fitness.
Don’t Use SMS Data
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• Shippers and brokers should not be using CSA/SMS data to select carriers
• FMCSA should stop publishing scores and should abandon efforts to mathematically determine carrier safety ratings
• FMCSA should utilize CSA/SMS for its original purpose of deciding where to dedicate its enforcement resources
A Call to Action
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• Key changes in new rulesDrivers must have two consecutive breaks from 1 AM to 5 AM once per weekMinor other changes such as mandatory rest breaksDriving hours were not reduced from 11 to 10
• Impact on carriersDepends on fleet but average of 3% utilization declineThat means 100,000 more drivers are requiredMore trucks hitting the road at 5 AM on Mondays rather than late Sunday night means greater congestion and more accidents
• The ATA is suing, but so is the other side• Effective date is July 2013
Hours of Service
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• Required use thrown out by 7th U.S. Court of Appeals Specious concern about carriers harassing driversOOIDA opposes EOBR mandateATA in favor of mandate
• FMCSA will get this back on trackConducting “listening sessions” to address driver concernsThe Senate Highway Bill includes an EOBR mandateLarge carriers achieve higher equipment utilization with EOBRs
• The technology is affordable and effectiveThere are still issues around equipping highway enforcement personnel to access the EOBR
EOBRs
25© Transplace 2012. All contents confidential.
• Agreement signed July 5, 2011 to renew cross-border trucking program
Mexican truckers must comply with Federal Motor Vehicle Safety Standards, utilize EOBRs (paid for by FMCSA), and driver must speak English
• Only one carrier with two trucks, another with one truck, and one other owner operator have been approved
As of Feb 9, 2012 the first carrier had crossed the border 9 times
• OOIDA, the Teamsters, and Public Citizen are all suing to stop the program
• Mexican carriers need to get loads back to MX, so don’t want to come to far into the U.S.
Mexico Cross Border Trucking
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• Senate seeks 2-year bill and House looking for 5 years or another extension
Spending target is $54 billion per year, but federal fuel tax receipts are $35 billion per year
• SAFETEA-LU signed August 2005 and expired September 2009
Extended 9 times and expires 6/30/12• Federal diesel tax flat since 10/1/93 – purchasing power
destroyed• Highways and bridges in poor condition
63% of metro highways in less than “good” repair in ‘08Average age of bridges is 43+ years and most were designed for 50-year life
Highway Funding
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• Beware of Vehicle Miles TaxFeds lack courage to raise the fuel tax for almost 20 years or even index it for inflationBut somehow can create an entirely new and very inefficiently collected new tax
• There are a number of interesting proposalsFocus all federal fuel taxes on interstate highways and bridges, not transit and bike pathsDevolve highway decision making back to the states –they do the work anyway and the Interstate system was largely complete in 1980’s. Transit is inherently local/regional.Tolls for new highway construction, but prohibition of conversion of existing Interstate to tolls
Highway Funding
28© Transplace 2012. All contents confidential.
Federal Highway Trust Fund
Source: Transplace analysis
‐10
‐5
0
5
10
15
20
Billion
s of Dollars
Annual Surplus of Highway Account of FHTF1957‐2010
Transfers from General Fund
Transfers to General Fund
29© Transplace 2012. All contents confidential.
• Two proposals97,000 pounds with third trailer axle88,000 pounds with current configuration
• Shippers are for it but most others are against itATA, railroads, unions, and safety groups are all opposed
• Strong lobbying effort in February 2012 – “Stand up for Trucking” DC event
Included in initial Senate bill, but quickly tossed outAlso excluded from House bill
Truck Size and Weight
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• Current legislative and regulatory environment drives up logistics costs with no improvement in safety or solution to our crumbling highways and bridges
• Many players seek competitive advantage through regulation
• Fearmongers seek to sell products and services to capitalize on confusion
• The supply chain industry needs to speak up• Fact-based arguments• Common sense solutions
Conclusions