Agency Safety Scoring Seen as Unfair to Fleets, Brokers

This story appears in the Jan. 9 print edition of Transport Topics.

Claiming that the Federal Motor Carrier Safety Administration’s safety scoring system is unfair, a prominent freight broker and a transport attorney are pursuing multiple steps to stifle the agency’s Safety Management System.

Thomas Sanderson, CEO of Transplace, and lawyer Henry Seaton told Transport Topics on Jan. 3 that the efforts include education, political pressure and the prospect of a lawsuit to halt the use of the SMS, which assigns a percentage score to fleets on the basis of five categories of infractions, such as driver fatigue.

The scoring system is unfair, Seaton and Sanderson said, because it applies to only 12% of carriers and is based on flawed statistical calculation of driving infractions such as speeding.

As a result, small carriers are being hurt and brokers, as well as fleets, are losing substantial business, they told TT.

“We will pursue multiple initiatives with the goal of having the SMS scores removed from the public arena,” said Sanderson, whose company ranks No. 16 on Transport Topics list of the Top 25 freight brokerage firms, and Seaton, whose firm sued on behalf of the National Association of Small Trucking Companies to block the scoring system.

FMCSA didn’t respond to requests for comment about the issues Seaton and Sanderson raised.

The criticism from Seaton and Sanderson is continuing at a time when the SMS system also has been questioned by the agency’s Motor Carrier Safety Advisory Committee. That group contends the scoring process needs both more information and more data information to better assess safety.

FMCSA’s long-term plan for rating carriers’ safety fitness is still being developed as the agency works on a proposed rule to convert SMS scores into safety fitness ratings. FMCSA has said it will unveil its plan sometime early in 2012.

“We will contest the data sufficiency, the methodology, and the adverse effect of [SMS] publication” in that proceeding, Seaton and Sanderson told TT. They’re also pursuing educational efforts with brokers and shippers and a meeting with House and Senate leaders.

“We are hopeful that a second lawsuit will not be necessary,” they said.

Seaton settled an earlier lawsuit against FMCSA after the agency agreed to change the identification system for scores that exceed the agency’s threshold, replacing the word “alert” with a triangle with an exclamation point inside it (3-14, p. 6).

FMCSA has determined that 56% of carriers that have SMS scores exceed its safety measurement threshold in one or more of five categories. Scores that exceed the threshold trigger further agency review.

“To think 56% of carriers require further investigation is ludicrous, given improvements in highway safety,” Sanderson and Seaton said. “The trucking industry does a fabulous job of safety.”

Sanderson cited another flaw in the scoring process, saying there was almost no statistical correlation between trucking companies’ actual safety performance and their SMS scores in the categories of unsafe driving, fatigued driving and driver fitness.

“Shippers and brokers are nervous,” Seaton said on a Dec. 20 conference call. “FMCSA is shifting the burden for determining fitness for service to the shippers and brokers.”

Sanderson cited as one indicator of his concern a 2011 study by investment bank Morgan Stanley that found 55% of shippers won’t use a carrier that has even a single score above FMCSA’s allowable threshold.

Robert Voltmann, president of the Transportation Intermediaries Association, described current federal safety efforts as “better than we used to have” under the previous system, known as SafeStat.

He said, however, that SMS scores “aren’t safety ratings. They are just several sets of data.”

TIA, as a brokers’ group, is concerned about the SMS system because plaintiffs’ attorneys use the scores in court to argue that brokers were negligent because they didn’t ask for or obtain a carrier’s SMS data, Voltmann said.

There have been SMS-related court actions on the state level against brokers and shippers in Colorado, New York, North Carolina and Tennessee, said Sanderson and Seaton, who also said that SMS “is clearly expensive and harmful to small businesses while also not improving safety.”

Smaller carriers are hurt more than larger ones when their scores exceed the SMS threshold, Seaton and Sanderson said.

That harm occurs because the way the system works, the higher number of trucks run by big fleets allows them to reduce the effects of a single poor score, compared with the safe operation of the overall fleet.

Seaton and Sanderson also charged that large carriers that have good SMS scores are using their performance as a marketing tool to hurt smaller fleets.

Rob Abbott, vice president for safety policy at American Trucking Associations, said ATA supports FMCSA’s safety goals but wants to see further changes in the scoring system.

“ATA’s members, the majority of which are small carriers, have directed staff to continue taking this constructive approach toward improving the program,” Abbott said.