What you need to know about FMCSA’s proposed SFD rule

Presentation on theme: "What you need to know about FMCSA’s proposed SFD rule"— Presentation transcript:

1 What you need to know about FMCSA’s proposed SFD rule

2 1. What is the Safety Fitness Determination Rulemaking?
Answer: The agency’s first effort in 35 years to completely overhaul the way it determines whether carriers can continue to operate. Would replace compliance review and appeals process with roadside data plus perfunctory investigations which would quickly place carriers out of service.

3 1. What is the Safety Fitness Determination Rulemaking?
Answer: The agency’s first effort in 35 years to completely overhaul the way it determines whether carriers can continue to operate. Would replace compliance review and appeals process with roadside data plus perfunctory investigations which would quickly place carriers out of service.

4 Would replace unrated conditional and unsat with 1 finding, unfit to operate.
Would allow a carrier to be found unfit based upon roadside inspections alone without any consideration of management responsibility. Would allow the agency to move the limbo bars at any time. Would rely on SMS methodology to set arbitrary flunk rate.

5 Claimed benefits: Expediency – no reason to conduct on-site audit or determine causation. Carriers found unfit could be placed on “probation” and monitored. Agency’s ultimate goal is to approve use of roadside data as having correlation to safety.

6 2. So what’s the big deal? Answer:
Forced use of SMS methodology by shippers and brokers prejudices use of small carriers and creates contracting problems. Roadside data is bankrupt as a measurement tool. SFD marks change in agency philosophy from audits considering management’s willingness to abide by rules to a “we gotcha” with no consideration of cost to small businesses. SFD was an end run around criticism and congressional mandate.

7 3. What has the Coalition done in the past 6 months?
Shepherded positive congressional action in the FAST Act. Fit to operate is fit to use. Got poison pill provision in TIA initiative deleted. Got language requiring removal of SMS methodology pending study (28 months).

8 Our coalition joined with another coalition in demanding defunding of agency when it proceeded with SFD. Congressional action pending. Used coalition with 8 other trade associations to file massive detailed comments. See Although other groups all concede SMS does not work, only our coalition made the case for the record – creating a burden under the Administrative Procedures Act which the agency cannot easily overcome.

9 3. Why is this so important to small businesses in particular?
Agency disregards the effect on small businesses of presumptively placing a carrier out of service. Even with their raised inspection bar, most of the carriers they would find unfit operate less than 20 trucks and the vast majority in the agency’s own test survey would be at best put on probation without ever being involved in an accident.

10 Goodbye compliance reviews
CRs used to assess management’s compliance and safety culture In lieu of CRs, FMCSA would use: Roadside inspection data scored against “absolute” standards based on Safety Measurement System (SMS) methodology Investigations of acute/critical violations, grouped by SMS BASICs Deficiencies in 2 BASICs in either method or a combination of the two would lead to an unfit SFD

11 Investigations favor FMCSA
Focus on acute and critical violations similar to CRs, but with key differences 1 critical violation in 10% of records examined fails a BASIC Unsafe Driving violations to be used for the first time Just two speeding tickets might be enough to fail the BASIC for a carrier as large as 20 trucks A data-only review with a much lower failure threshold Based on actions of drivers, not pattern of carrier non-compliance Could facilitate shutting down carriers that have already failed another BASIC

12 Why can’t you trust data?

13 Watch that again

14 The rest of the story Tragically, a life was lost.
Clearly, neither the truck nor its driver had anything to do with the accident, but a runaway tire damaged the truck. Carrier’s DataQs request to remove the recordable crash was denied. The carrier’s appeal was denied. Then the carrier appealed to FMCSA and was denied again. That crash remains in SMS today.

15 Agency’s justification?
Expediency. No need to bother with a full audit. Sold as targeting “the worst of the worst” High “limbo bars” for failure in data-only SFDs: Scores equivalent to 96th percentile for Unsafe Driving and HOS Compliance Scores equivalent to 99th percentile for Vehicle Maintenance, Driver Fitness and Hazardous Materials Compliance

16 What’s wrong with all of that?
Ignores Congress by presuming a correlation between SMS methodology and carrier safety fitness Reserves considerable agency discretion, such as the ability to change severity weights through guidance FMCSA refuses to disavow use of roadside inspection data by shippers and brokers in certifying carriers Gone would be conditional ratings and the right to seek upgrades through corrective action plans Unfit carriers would be forced to sign consent decrees

17 SMS flaws ignored SMS is a deeply flawed system
The Government Accountability Office, the DOT Inspector General and Congress know it In 5 years of tinkering SMS has not been perfected Under the FAST Act, FMCSA is supposed to consider its corrective action plan in any rulemaking related to SMS

18 SFD NPRM all about SMS Same roadside inspection data, same BASICs, essentially the same peer groups (minus those under 11 inspections) Any real difference between a relative percentile and a fixed standard calculated using relative percentiles? Bottom line: Carriers would be judged against standards that are rooted a flawed SMS methodology FMCSA trying to write SMS into regulation – something the industry should not let happen

19 7 systemic flaws in SMS (1) Insufficient data
Agency is charged with measuring all 525,000 operators of interstate commercial motor vehicles. Yet, the agency admits belatedly it only has data to actually measure 30,000 carriers. Of the 30,000 carriers measured under the prototype the vast majority are small and could be found unfit based upon a single bad inspection in which as many as 30 infraction points could be assigned.

20 7 systemic flaws in SMS (2) The law of small numbers
Bias against small carriers – GAO said 20 data points would be needed FMCSA cannot assess 450,000 active carriers One crash for a 5-truck operation typically equals crash rate of more than 1.6 per million miles – and there’s a 1 in 4 chance that the crash was its fault One bad inspection – 30 points – raises raw scores by more than 2.5 points

21 7 systemic flaws in SMS (3) Enforcement anomalies (4) Peer group creep
Unsafe Driving Where – not how – you operate 43% of Unsafe Driving violations accumulated in 5 states Vehicle Maintenance Rate of inspections varies by scale (4) Peer group creep No correlation explained between thresholds and safety Major drops in allowable scores Arbitrary inspections cut off Must improve scores by 20% to 30% to remain fit

22 SFD failure standards

23 7 systemic flaws in SMS (5) Profiling (6) Crash data
ISS, PrePass and pre-inspection No equal treatment Trucks operated by carriers with 1 to 4 trucks are inspected 2.9 times as often as those operated by carriers with 1,000+ trucks (6) Crash data Only 1 in 3 or 4 chance the crash was the carrier’s fault Small carriers subject to wild swings in rate (7) Underreported inspections Unreported walk-around inspections skew SMS ratios

24 How effective? Congress directed FMCSA to rate all carriers
Just 17% of all carriers would be assessed under NPRM, and only about 40% of those have enough violations to potentially be found unfit in even just 1 BASIC Very few carriers would be found unfit in 2 BASICs. Our analysis suggests even fewer than FMCSA estimates With “enhanced investigative techniques”, little due process or ability to appeal, any carrier could be at the agency’s mercy with no real judicial appeal

25 83% of carriers not monitored
Source: Analysis of information in SFD NPRM

26 Who wants what? Most shippers and brokers want “red light/green light” standards and don’t want to have to second-guess FMCSA Plaintiff’s bar wants to use agency data and pronouncements to go up the supply chain to deep pockets Sellers of data want to create felt need for SMS and to frighten shippers and brokers Shippers and brokers should insist that the agency affirm in the rulemaking that fit to operate = fit to use

27 Small carriers in the crosshairs
Even with raising the bar for assessment to 11 inspections, 42% of carriers monitored have 5 or fewer trucks. FMCSA’s claims about correlation of crash rate and failed BASICs are based on average rates, ignoring both lack of any crashes by large numbers of carriers and preventability of crashes by others. Because the agency cannot determine crash preventability, small carriers with 2 not-at-fault crashes can appear to be bad actors under the unscrubbed methodology.

28 Carriers failing at least 1 BASIC
244 carriers with fewer than 10 PUs – 47% of the total – had no crashes in past 24 months For sake of clarity, crash rates above 150 and carriers with 10 or more power units have been excluded Carriers with the same number of power units have been assigned unique numbers in 1/100ths increments

29 FMCSA’s NPRM analysis 211 carriers that would have failed two BASICs based on data alone had an average crash rate of 8.28 crashes per 100 power units – about four times the national average – in the 12 months that followed their hypothetical rating date. But data obtained through FOIA shows that 54% of those carriers had no crashes in that 12-months period. 5 carriers represent 27% of all crashes recorded by those carriers during that 12-month period.

30 Carriers by number of crashes
Identified in NPRM as failing 2 BASICs through data alone Source: FMCSA data through FOIA request

31 SFD Analysis is Obsolete
Based on 2011 statistics, SFD does not recognize the effect of ELDs in reducing and compressing hours of service violations or the future effect of speed limiters on reducing both crashes and unsafe driving violations for OTR carriers.

32 Conclusions Associations and Coalition members have effectively represented small business carriers against bureaucratic overreach on the Hill, before the Small Business Administration and in responding to the Safety Fitness Determination. Only our Coalition has established a record in the SFD which the agency cannot easily overcome or ignore. If Congress does not stop the SFD in its tracks, we have set down a marker the agency cannot overcome and hopefully defeated the adoption of a fatally flaws system which would have crippled competition by small carriers and equal access to freight.