Getting a Conditional Rating Upgraded
Following an FMCSA audit, the FMCSA issues a safety rating. They have 3 ratings: Satisfactory, Conditional, and Unsatisfactory. Actually, the really only have 2 ratings, Satisfactory and Conditional. If you are given an Unsatisfactory rating, you’re so screwed up, they only give you 60 days to fix what’s wrong, or they put you out of business. Well, I’m paraphrasing, but that’s more or less correct.
You can operate indefinitely with a Conditional rating. However, if you’re a for-hire motor carrier, a Conditional rating will generally hurt your business. Some shippers won’t load a Conditional carrier. For example, I had heard that CH Robinson had a problem with Conditional carriers. Insurance companies can use a Conditional rating as an excuse to raise rates.
The traditional method of getting FMCSA to up your rating to Satisfactory is getting them to re-audit you, and pass the audit. Then you get the Satisfactory rating, your Safestat scores drop, and everything is A-OK. FMCSA, however, is changing their procedures on that, though. FMCSA has so many audits which need to be done, they are unable to get to the carriers who need their ratings upgraded. FMCSA has a petition procedure, where a carrier can send written documentation into FMCSA, showing how they’ve mended their ways and come into compliance with the rules. If the documentation is thorough and compelling (their word), then they upgrade the rating.
The trick is, these petitions have to be complete, voluminous, and just the way FMCSA wants them. If they are going to give you the upgraded rating, without an audit, then they have to be sure you’ve earned it. If you end up in a wreck, and kill a family of six, the FMCSA guys don’t want to be on the nightly news because they gave you a rating you didn’t earn. In other words they need to CYA. Actually when talking about FMCSA personnel, CYA is one of their prime motivating factors. Remember that line from The Hunt for the Red October when Fred Thompson tells Alec Baldwin, “Russians don’t take a dump, son, without a plan”. Well, you could change that to “FMCSA doesn’t take a dump, son, without CYA”, and it would still be true.
At any rate, if you have a Conditional rating, want to get it upgraded, you could spend a week trying to figure it out yourself, or you could save yourself some aggravation and time: call me.
More Positive Driver Information
Did I mention you have to shut down a positive driver immediately? It seems like I just said that, but I recently ran into another instance where this has happened. When one of your drivers flunks a random test, you must immediately find him after being notified by the MRO of the failure. It doesn’t matter if he’s across town, or across the country, you must make that driver park the truck. You can’t let him drive back to yard, you need to take all practical steps to relieve that driver from duty.
When an audit takes place, you can’t hide the positive test, either. DOT will go to your MRO, and get a list of all test results in the past 12-18 months. They will investigate all positives which took place on a random test. They will determine the exact time the MRO notified you of the positive test. If the driver drove beyond that time, you are liable for a penalty of several thousands of dollars.
New Entrant Rules to Get Tougher
I haven’t posted anything in awhile. Why? Well, let’s just say, if you’re not backing up your computer files, you should be. One day you’re going to push the “ON” button on your trusty laptop, and it’s just going to sit there. I was 80% ready for that awful day, next time I will be 100% ready.
Anyway, I came across this article on the Net about FMCSA’s New Entrant program. As you may know, I am selling a DVD training package, for $275 plus shipping and handling. It is designed for small companies who don’t know much about the safety regulations, such as logbooks, driver files, or drug testing. One of the main groups I market to are the ‘new entrants’, which are carriers who have just gotten a DOT number. FMCSA audits all new entrants within 18 months. According to this article, FMCSA is going to make the new entrant audit much tougher to pass. If that’s true, then you really should buy my DVD package.
Anyway, here is the article, from Traffic World, dated April 21, 2008:
“Never mind the record high diesel fuel prices, new trucking companies soon will have to face a barrier that until now hasn’t posed much of a problem for new entrants: The Federal Motor Carrier Safety Administration. The agency, under fire at times from critics who say the motor carrier regulator has been too friendly to business, is preparing stringent new requirements for trucking companies entering the marketplace. The FMCSA says it expects the demands, including tighter mandates for training, drug and alcohol testing and insurance, could cause some 30 to 40 percent of new applicants to hit the brakes.
The rules could tighten the lid on capacity as the sagging American economy is pressing larger trucking companies to scale back fleets and pushing many smaller truckers and independent drivers into bankruptcy or out of the industry altogether. “This is a much more thorough program and it’s got some teeth in it,” said Stephen F. Campbell, executive director of the Commercial Vehicle Safety Alliance. “Saying ‘I didn’t know,’ it will not be a defense.”
By the agency’s own admission, its past oversight of new carriers has been less than stringent. Under the current program, new trucking companies could operate without drug and alcohol testing program, although they would have to put one in place within 18 months. “Our entrant program was designed to be more of an educational format,” FMCSA Administrator John Hill said. “Carriers can tell [us] they are doing something and that is all we are required to do … we don’t really do a lot of our verification.”
All that is about to change. The agency is gearing up to complete its New Entrant Motor Carrier Safety Assurance Process in the next few months, the culmination of a process launched by the Motor Carrier Safety Improvement Act in 1999. FMCSA expects to issue final rules shortly that will govern the 18-month provisional period and the accompanying audits of new trucking companies. These rules will replace interim final rules issued in 2003. The new rules represent the biggest change in entrance requirements for new truckers since deregulation stripped many economic regulatory requirements from the books.
At the heart of the rule will be 11 regulations, including stringent requirements for drug and alcohol testing programs, insurance and use of records. Unlike the current system, a single violation would result in automatic failure. The new requirements – which were proposed in December 2006 – would be effective 30 days after the final rule is published. Hill says they will not make the entry process easier.
“We estimate through some early analysis that 30 to 40 percent of the new entrants will have difficulty” meeting the new standards, Hill told the National Industrial Transportation League’s Spring Policy Forum on April 8. Hill noted that safety audits required for Mexican carriers participating in the agency’s crossborder trucking program place stricter requirements on Mexican companies than on American operators. “We really ought to do that with the American companies as well,” Hill said.
The FMCSA’s strict new carrier requirements come in the face of mounting criticism from safety groups and others that the Bush administration has not taken a strong enough regulatory role. This new rule may be part of the agency’s answer. The agency has more than seven rule-makings coming out this year ranging from issues addressing intermodal container chassis to sleep apnea.
Although instigated by a lawsuit, the agency’s recently proposed entry-level driver training rules – which will require 120 hours of classroom training time – are another example of tougher requirements in the pipeline. The agency says its figures show highway safety improving in recent years. The large truck fatality rate has fallen to its lowest level since the Department of Transportation began tracking the figure in 1975, for instance, while traffic on U.S. highways has increased 22 percent over the past 10 years. And the FMCSA says since autumn 2007 it has published several rules and regulations ranging from fire extinguisher requirements to Unified Carrier Registration fees.
But many fear the new requirement on new carriers could end up harming the trucking industry and its shipper customers just as the freight downturn is expected to subside. “It’s becoming more and more onerous on small operators,” said Brigham McCown, an attorney and former general counsel at the FMCSA. “More and more regulations at some point starts to push the little guy out of business. … At some point you just say ‘To hell with it, it’s not worth it.’”
Small carriers make up approximately 90 percent of trucking companies, accounting for roughly 50 percent of capacity in the market, according to David Ross, a transportation analyst for investment firm Stifel Nicolaus. “These increased regulations will make capacity tighter in the upturn and will favor the large trucking companies already out there,” Ross said. Many large truckload carriers have parked hundreds of trucks over the past year in response to waning demand, but broad figures on trucking activity in recent months belie the negative reports about the larger economy and may even suggest an upturn is on the way. The American Trucking Associations reported increases in its trucking tonnage index in the first two months of 2008, including a 3.5 percent increase in February over the same month last year.
“You’ll get back into the tight demand environment; when that happens the pricing power goes back into the hands of the carriers rather than the hands of the shippers, where it is now,” he said.
“The agency has to balance the realities,” said Donald Schaefer, executive vice president of the Mid-West Truckers Association. “You can put regulations on the industry, but if you put half of them out of business then you’ve created an all-new set of problems.”
Not everyone thinks there will be a problem. The American Trucking Associations supports the new-entrant rule. “It does make sense from our standpoint to make this process tougher,” said Dave Osiecki, the ATA’s vice president of safety, security and operations. “What I hope it does is ensure a more safe company coming into the industry.”
And the Owner-Operator Independent Drivers Association, whose smaller companies would most likely be the ones affected by the rules, supports the new regulations as well. “Generally, we don’t have a lot of problems with it,” said Rick Craig, OOIDA’s director of regulatory affairs. He said new trucking companies that fail one of the requirements can always reapply. “I don’t think they are going to give up,” Craig said.
But Craig, and Todd Spencer, OOIDA’s executive vice president, also have their concerns, questioning the accident data used to develop the rule and whether the rule emphasizes paperwork over safety operations. “While most of the new carriers have shortcomings,” Spencer said, “they weren’t crashing trucks.”
Do you need a Security Plan?
If you are a carrier or shipper of placardable amounts of hazardous materials, you need, among numerous other requirements, a security plan. This is a written document where you outline how risky you believe your HazMat operation is, and the measures you have in place to prevent terrorists from stealing or sabotaging your HazMat. The security plan regulations came about, naturally, following the 9-11 attacks. DOT loves issuing security plan fines. You might think DOT would take a cooperative approach, and assist industry in developing these plans, and otherwise help them without punitive fines. Well, if you think that, you’ve thought wrong. Security plan fines are big and plentiful. $10,000 or $20,000 is not unusual.
A shipper or carrier can not only be fined for not having a plan, they can be fined if their plan is not comprehensive enough in the judgement of the DOT inspector. You can even be fined if you have a plan, but are not following your own plan. For example, if you have a plan which says that all visitors will be required to sign in and wear name tags, and no one asks the DOT inspector to sign in or wear a name tag….. you could be fined. Sound ridiculous? It has happened. If you transport or ship HazMat via trucks, you should inquire as to the regulations, and make sure you are in compliance with 49 CFR 100-199.
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Eric Arnold is a Former Enforcement Agent with the Federal Motor Carrier Safety Administration, and a leading expert on USDOT compliance for small businesses. Do you have a question for Eric Arnold? Email him at eric@arnoldsafety.com.
Arnold Safety simplifies D.O.T. Compliance for commercial vehicle operators. Get Eric Arnold’s USDOT Compliance Guide, DVD, & Regulations at ArnoldSafety.Com.
Learn more about Arnold Safety compliance consulting services at ArnoldSafety.Com.
New Rulemaking Issued By DOT
The FMCSA (aka the DOT) has issued a final rulemaking, which makes official a number of provisions which were contained in the last authorizing law dated 8-10-05, called the “Safe Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users”. (SAFETEA-LU).
(I kid you not, that’s what its called. Your Congress at work.)
What is this, and what does it mean? Once every five years or so, Congress must pass a law re-authorizing and re-funding FMCSA to do its regulatory work. When passing these laws, both FMCSA and industry special interest groups lobby Congress looking for all types of special handouts. FMCSA typically looks for as much funding as possible, so they may expand their agency. They also look for expanded authority and power, for the same reason. Industry groups try to get little exemptions inserted into the law, which may exempt them from hours of service rules, for example. This is why the regulations are 700 pages long, and getting longer and longer. DOT always adds words, they hardly ever subtract words.
What does it mean to you? Probably nothing.
Most of these changes have nothing to do with the main regulations, and who has to comply with them. The biggest change I see in there is that utility service drivers are exempt from the hours of service regulations. Also, drivers operating within a 100 air mile radius and transporting equipment to movie production sites must use the old 10 and 15 hour rules. Oh, and if you are transporting grapes in Western New York (west of I-81 only), within 150 miles of where the grapes were picked, before September 30, 2009, you are exempt from the hours of service rules. I’m not making that up!! If you transport grapes in Western New York, you are exempt from the hours rules, but only until 9-30-09. I don’t know, maybe Hillary Clinton likes grapes, or wine, or something.
The rule also increases DOT’s already ridiculously high penalties for violating Out of Service orders, and increases the ceiling on hazardous materials penalties. Will this mean that DOT will begin issuing even higher hazardous materials penalties? Maybe, but I doubt it. DOT also expanded its authority to cover virtually all commerce in the U.S., including intrastate commerce. Again, this probably means nothing to you, as most States have adopted all or virtually all of the Federal DOT regulations anyway. Well, there it is, don’t panic, 99.44% of you will be unaffected by this rulemaking.
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Eric Arnold is a Former Enforcement Agent with the Federal Motor Carrier Safety Administration, and a leading expert on USDOT compliance for small businesses. Do you have a question for Eric Arnold? Email him at eric@arnoldsafety.com.
Arnold Safety simplifies D.O.T. Compliance for commercial vehicle operators. Get Eric Arnold’s USDOT Compliance Guide, DVD, & Regulations at ArnoldSafety.Com.
Learn more about Arnold Safety compliance consulting services at ArnoldSafety.Com.
Safety Ratings and Accidents
When DOT conducts its audits, it will generally assign a safety rating to that motor carrier. There are three ratings: Satisfactory, Conditional, and Unsatisfactory.
It is very important that you be assigned the highest rating of Satisfactory, for reasons I will detail in some later post. In determining the ratings, DOT considers not only if you are in compliance with the regulations, but whether or not you are having too many crashes. It will take the number of serious or “recordable” crashes you have had, multiply that times 1,000,000, and divide that by the number of miles you have operated over the past year. That ratio cannot be more than 1.5. Or, put another way, you cannot have more than 1.5 recordable crashes per million miles operated.
What is a recordable crash? An accident where there is a death, an injury treated away from the scene, or a vehicle towed from the scene is a recordable crash. An incident where a driver bent the ICC bumper backing into a dock is not a recordable crash.
If your ratio is too high, it can cause you to have a Conditional rating all by itself, even though you may be complying with all of the rules. This is just another benefit to having safe drivers who do not cause accidents.
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Eric Arnold is a Former Enforcement Agent with the Federal Motor Carrier Safety Administration, and a leading expert on USDOT compliance for small businesses. Do you have a question for Eric Arnold? Email him at eric@arnoldsafety.com.
Arnold Safety simplifies D.O.T. Compliance for commercial vehicle operators. Get Eric Arnold’s USDOT Compliance Guide, DVD, & Regulations at ArnoldSafety.Com.
Learn more about Arnold Safety compliance consulting services at ArnoldSafety.Com.
How to Survive a DOT Audit
What is the best way to survive a DOT audit? The short answer is, “don’t get audited”. This is done by staying off DOT’s radar screen. DOT primarily conducts its audits from its Safestat list. The Safestat list is a hit list of what DOT considers to be the most hazardous motor carriers. DOT keeps track of all serious accidents, and DOT roadside inspections of trucks in the country. They pump this huge amount of data into their computers, spin it around three times, and voila! the Safestat list. If you are having crashes, and/or being placed Out of Service at the roadside because your drivers or vehicles are violating the rules, you are probably on the list somewhere. Pay attention to any roadside inspections on your vehicles. Make sure your drivers are turning in all DOT roadside inspections. If you are being ticketed and placed OOS, you need to know about it now! Before it turns into an audit.
