It was the type of scheme that makes investigators from the Federal Motor Carrier Safety Administration (FMCSA) want to "dig deep" — one in which a company's owners, dispatchers, and a variety of operations people were all knowingly breaking the rules.
In the end, the airport shuttle firm based in New Britain, Connecticut, would pay a $75,000 fine, while its owners were ordered to divest themselves of all ownership interests in the firm for a 5-year probation period.
According to investigators, the firm's dispatchers assigned drivers to trips knowing that the drivers would be exceeding the regulated limits of on-duty driving time. Meanwhile, the owners instructed employees to record falsely in the company logs that the driver was off duty during those times. The falsified logs were then submitted to FMCSA for a routine inspection — or perhaps a not-so-routine inspection.
Each year, the consequences of violating federal motor carrier laws are made public on the Internet, and the names of violators are listed, along with their fines. The shuttle service names joined the list of other hours-of-service (HOS) violators, a space that accounted for 36.32 percent of total FMCSA civil penalties in 2013.
It's the type of violation that occurs all too frequently, said Chris Nelson, Assistant Vice President, Risk Management, Transportation, NBIS, a market and thought leader in Specialized Transportation Insurance.
"We understand that people need to run their operations and run their businesses, but they also have to know that if they choose to break the rules knowingly, there will be definite financial consequences," said Nelson, who recently paired up with NBIS Chief Legal Officer Robert Moore to offer NBIS agents some insights into how to better engage and educate their clients concerning the scoring system that the FMCSA uses to enforce regulations.
Together, the two executives — each with extensive experience in the transportation and heavy construction industries — recently used the airport shuttle example as a case study for a webinar designed to educate NBIS agents on how the scoring system impacts their client companies. Designed to expose carriers with safety problems before crashes occur and put those carriers that fail to correct their safety problems out of service, the FMCSA's safety compliance and enforcement program annually collects roadside inspection and crash information from 3.5 million inspections. The FMCSA then publishes its information to allow carriers to address their problems and at the same time prioritize carriers for possible interventions.
"Just how your clients perform on these metrics is public information that impacts their revenues and their insurance premiums," Moore told the webinar's audience, as he revealed how the FMCSA system ranks carriers on a bell curve — an approach that creates something of a competitive dynamic among client companies.
"What happens is that carriers will look at the bell curve and say, 'I'm not in the danger zone, I'm okay,' but the fact is that other firms that did not score as well will look to improve their scores and all of sudden the carrier has dropped from the 80th percentile to the 75th percentile and is now entering the danger zone," says Moore, who believes that a new FMCSA mandate for the use of certain technologies such as electronic logging devices (ELDs) by carriers will only increase the impact of the bell curve's influence.
"If you are an early adopter of ELDs, you are going to reap the benefit of improving a lot more quickly than everyone else, but if you choose to wait until the end of the mandate's deadline requirements, whether it be for a year and a half or 2 years, you are not only going to remain status quo, but you will also continue to score worse," said Nelson, who added that "anytime technology allows you to move forward more quickly, it's best to take the approach and move forward with it."
The early adoption of ELDs by carriers is just one of a number of proactive steps that Nelson and Moore encourage NBIS agents to champion. Still, NBIS will address each carrier's score with a level of scrutiny.
"The bottom line is that we're probably going to want to dig into the score as part of the submission process, and we're probably going to have questions along with the underwriting team concerning the factors that contributed to the current score," said Nelsen.
During the webinar Nelson and Moore discussed the three elements of FMCSA's approach, which are the safety measurement system (SMS), intervention process, and safety fitness determination (SFD).
Nelson also said that to assess a given score, NBIS relies on the FMCSA's Safety Management Cycle, a model that provides a systems view of the management processes and safety improvement practices that a carrier should have in place in order to ensure compliance with FMCSA regulations.
"The six safety management processes (SMPs) in the cycle are areas that a carrier can systematically explore in order to discover which SMPs are broken or not in place, thus identifying the process breakdown," said Nelson, who said that he believes monitoring SMPs are only part of the discovery process.
"Let's be honest. This can take a carrier only so far, because you're really just reactively managing the process," continued Nelson, who contends that monitoring SMPs reveals what has already happened and does not reveal areas of opportunity where improvements can be made.
"We need some way of identifying what the carrier is not doing at all and what can be done better," he noted. To meet this need, NBIS developed a DOT mock audit, an approach that Nelson highlighted during the webinar and characterized as a map which, when followed, can lead to a "safer, more profitable operation."
One of the more impactful case studies presented during the webinar featured a video of a vehicle having a near accident while the driver was listening to loud music and texting. The video of the commercial driver was captured using an in-cab camera and later used by the carrier to settle the violation that was triggered by its driver's behavior.
"Even though it was the driver's fault, the [carrier] was able to move to settlement much more quickly and actually settle for an amount much less than it would have been had there been a lot of attorney fees and a long trial. Meanwhile, had it not been the driver's fault, there would have been clear exoneration," said Nelson, adding that the carrier ultimately corrected the behavior of the driver to help avoid such violations going forward.
In summing up the approaches, Nelson said that FMCSA compliance comes down to a formula.
"To improve your scores, your clients need to understand the safety measurement system and the intervention process, and this means understanding what's going to happen to them if the violations or behaviors continue," commented Nelson.
What's more, when a safety fitness determination is made by the FMCSA, whether it be satisfactory or conditional, Nelson said that the carrier must be able to raise its standards and to do so use a mock audit to better understand what steps need to be taken.
Asked near the conclusion of the webinar what areas in addition to "driver fitness" and "vehicle maintenance" would be the "best places to start" to seek out improvements, Nelson replied that while driver fitness and vehicle maintenance could be counted among the areas always ripe for improvement, "hours of service," or HOS, is still a hot spot.
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