Safety reporting system could cause transportation cost spike - The Packer

Safety reporting system could cause transportation cost spike

11/24/2010 01:04:37 PM
Ashley Bentley

New Federal Motor Carrier Safety Administration safety reporting rules set to be enacted Dec. 6 could cause transportation costs to rise, especially for produce carriers.

The new reporting system, called Compliance, Safety and Accountability 2010 (CSA 2010) is likely to take some smaller carriers — the kind the produce industry tends to use — off the roads and increase costs for the ones who can stay in business.

Kenny Lund, vice president of support operations for Allen Lund Co., said he wouldn’t be surprised if transportation costs rise as much as 30%.

The new system assigns safety scores to carriers through use of more metrics, including all safety-based roadside inspection violations and driver assessments, and will update scores more often. The new reporting system is likely to add cost for carriers in researching driving records, and trucking companies are likely to terminate drivers whose records could negatively affect their ratings, further reducing the already tight supply of available drivers.

There is also speculation that insurance premiums for carriers could increase. The rules are also likely to be harsh on regional distributors because some ratings are reported on violations per 100,000 miles, and these trucks don’t travel as far and can have more opportunities for issues in city traffic.

“The FMCSA has said, in effect, that it expects the new rating system to take some drivers out of the system,” said Doug Stoiber, vice president of produce transportation operations for L&M Transportation Services, a sister company of Raleigh, N.C.-based L&M Cos.

More liability

For shippers it could mean greater liability in the event of accidents, and higher cost in managing a large number of carrier relationships, according to a study published by C.H. Robinson, Eden Prairie, Minn.

“The fear is that 20% of truckers are going to be named deficient in each (of seven) category, minimum,” Lund said. “I’d be surprised if freight rates raise less than 10%, but I would not be that surprised if it’s over 20%.”

The accuracy of the safety information being reported is also under question, and many unknowns remain, including if carriers will be able to address mistakes or false information and what control they will have over improving their scores, Lund said.

Henry Seaton, general counsel for the National Association of Small Trucking Cos. and other carrier associations, said the data collection methods and relevance to safety have not been subject to review or government rulemaking. He also said the rule’s effect on small businesses have not been analyzed, in a Sept. 30 motion to postpone the release of CSA 2010 data.

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