Building the foundation for safe shipping

t-rSA. CRpncrrv. CoNcestton. Are \-rthese three words included in your business plan?

Is your transportation manager thinking about the impact of these issues? Does your company have a plan for shipping its products and manufactured goods if the driver shortage impacts transportation availability?

If you answered "yes," congratulate yourself-you're a member of a small group that is on track to ensure its products continue to ship safely and efficiently from point-of-origin to final destination. But if the questions have you scratching your head, it's time to dive in and learn how these issues will impact your supply chain moves, cost and business liability.

Csa

In December 2010, the Federal Motor Carrier Safety Administration

(FMCSA) launched Compliance, Safety and Accountability (frequently referred to as CSA), a program that replaces SafeStat with the objective to more accurately measure the safety performance of motor carriers and commercial drivers. CSA will help FMCSA and its state partners more effectively use limited resources to identify high-risk practices and behaviors in carriers and drivers and to help reduce large truck-involved fatality crashes.

CSA uses a Safety Measurement System to score carriers and drivers on safety-based violations involved in crashes and roadside inspections. The program compiles the data into seven Behavior Analysis Safety Improvement Categories (BASICs). Every inspection violation within the BASIC is time- and severity-weighted, and each BASIC is ranked to trigger an intervention Drocess. Once a scorins threshold is exceeded (often referred to as an alert level), a carrier will be subject to:

. A warning letter

Additional roadside enforcement

On- or off-site investigation

A comprehensive review

A cooperative safety plan

. A notice of violation

A notice of claim interventions

CSA will put added pressure on the trucking industry. The result will be fewer-but safer-truck drivers available for hire. You can't put a price on safety, but as the pool of available drivers with good safety records becomes smaller and competition to hire those drivers becomes more intense, it will inevitably add to the cost of transportation.

In addition to the economic impact CSA will have on carriers, shippers, drivers and consumers, the public availability of a carrier CSA score may increase a shipper's liability exposure. If a non-CSA compliant carrier is involved in a crash, liability could extend to the shipper by way of inadequate carrier qualification processes or standards in making freight tendering decisions.

In litigation involving the previous safety scoring system, plaintiff's attorneys struggled to link SafeStat scores and crash risk. With CSA, there will be no struggle linking the two. Educating transportation managers on CSA and selecting carriers compliant with CSA BASICs will be crucial to the success of shippers.

Capacity

With 758,682 carriers in the Department of Transportation's database, only 92,184 carriers (l2.l1Vo) have sufficient data to have a CSA score. Of those carriers. 52.967 have at least one alert-level CSA BASIC score. With said carriers employing more than 1.5 of the nation's 3.6 million truck drivers, nearly 507o of the capacity is under DOT scrutiny because of high CSA scores.

With the growing U.S. Truck Tonnage and Truckload Freight Index, there will be more demand for drivers. Yet federal regulations like CSA and potential changes to Hours of Service rules will combine to create a pinch in the driver pooi.

With the FMCSA's proposed Hours of Service changes, we believe the rules will impact driver productivity (thus impacting capacity) and will come at a cost that cannot be absorbed by carriers alone. The market will bear additional costs in the form of increased shipping rates and decreased productivity. Reengineering existing routes, updating and testing dispatch software, renegotiating contracts and prices with customers, and retraining drivers are a few tasks that will need to be addressed when the rules change.

Congestion

A final factor influencing the transportation industry is infrastructure. Government spending has been significantly underfunded for several years, resulting in excess roadway congestion. Congestion and the lack of saf'e truck parking are important issues on U.S. highways and are projected to worsen over the next several years. The decreased productivity that will result from the Hours of Service ruling will only accelerate congestion.

Increased investment in new transportation infrastructure will benefit and improve public safety for drivers, carriers, shippers and the motoring public. Should legislation be drafted or passed, tax increases in the form of fuel or mileage user fees and tolling will be implemented to offset the cost of highway improvements.

The Blueprint for Success

To keep the supply chain running efficiently, shippers should educate their transportation teams on what is happening in the industry and learn how the changes or proposed legislation will impact shipping times. rutes and business liability.

One of the most important things for shippers to do is solicit CSA scores of the carriers they use. Then they can work to develop a system fbr monitoring CSA scores and tendering fieight to safety-conscious carriers who will ensure their products are delivered safely.

Although your transportation providers are the ones operating in this complex environment, your business can't afford to sit back and allow the chips to fall where they may. Get smart on the issues and make sure you sclect transportation providers that protect your best interests. If they are prepared, informed and operating legally, you will be in the driver's seat when it comes to mitigating three additional important issues: risk, liability and cost.

- Don O.tterhery i.t .tr'ttittr Iit ( Pt'(.\ident of saJbtl', security und tlriver truining for Schneider Natictnul, Green Buy, Wi., provider oJ trLttkloutl, logistits cutcl intermodul ,yervices. Contat't him via www.schneider.cotn or get more inJb on C SA tu t sa.fmc sa.dt tt.gov / defitu t.asp.r.

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