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Chair of broker group tells members to avoid using public data in choosing carriers

Apr 09, 2016 at 02:39 PM CST

Mark B. Solomon

The chairman of the nation's largest freight broker group today urged his members not to rely on data generated by the federal government's Compliance, Safety, Accountability (CSA) motor carrier grading program as criteria to choose a trucker, telling them they are "putting your company and industry at risk" by doing so.

Jeffrey G. Tucker, who is also CEO of Haddonfield, N.J.-based third-party logistics provider (3PL) Tucker Company Worldwide Inc., said the carrier-grading data made public by the Federal Motor Carrier Safety Administration (FMCSA), although different from what was publicly available six months ago, is still flawed and unreliable. Under the federal transport-funding bill signed into law last December, FMCSA was ordered to remove scores from its Safety Measurement System that grades carriers in comparison with one another. However, the sub-agency of the Department of Transportation was allowed to maintain the raw data used to compile the scores.

Tucker told the Transportation Intermediaries Association's annual meeting in San Antonio that the same faulty data points are still present, and that all FMCSA has done is "put them up in a different fashion."

Tucker restated TIA's fundamental position that it is the FMCSA's responsibility, not the brokerage industry's, to determine whether a carrier is fit to operate, and that a safety fitness decision should boil down to a simple "yes or no." Shippers and brokers have argued for nearly six years that they should not be liable for damages in the event of an accident involving a carrier they've hired because the broker interpreted the carrier's fitness using inaccurate and incomplete data.

In January, FMCSA said it would change its evaluation formula by replacing a three-tier fitness rating—satisfactory, conditional, and unsatisfactory—with a single determination. A carrier's fitness would be based on its performance under five of seven "Behavior Analysis and Safety Improvement Categories" (BASICs) that make up a safety score, along with the results of carrier investigations and crash reports. Carriers found unfit to operate will be given that classification, at which time they will be ordered out of service and not reinstated until they've shown improvement, FMCSA said.

The agency said its proposal more effectively targets its limited resources at carriers that show higher crash risks. The new approach will allow the agency to determine the fitness of about 75,000 carriers a month, the agency said. Today, FMCSA investigates only 15,000 carriers a year, with fewer than half of those even receiving a safety rating, it said. The proposal will also eliminate the chief concern around comparative scoring—that it would tar safe carriers with the same broad brush as unsafe ones—according to the agency.

However, TIA and other groups have said the accuracy of the BASIC data remains dubious, and all the agency is doing is dressing up the numbers in different clothing. They also maintain that FMCSA is thwarting Congressional intent by improperly using data that has been generated in its Safety Measurement System (SMS), which grades carriers based on the BASIC data.

Tucker added that ongoing consolidation in the brokerage industry benefits most TIA members, because customers upset over post-merger service problems will flee to brokers with consistent and reliable service levels. He also took issue with concerns over a shortage of commercial truck drivers, saying that in the last four years the number of qualified for-hire drivers grew to 2.4 million from 1.9 million drivers. Tucker acknowledged the big carriers are experiencing a "massive" driver shortage, but said their situation is not representative of the entire industry.

Tucker said new-fangled models known as "Uber-brokers," which purport to connect shippers directly with carriers and disintermediate the traditional broker, would only disrupt the business if brokers let it. He warned brokers that don't climb the value curve with their shipper customers and carrier vendors may find themselves being taken out of the equation. The basic load-matching service "is just the tip of the spear" of necessary service offerings, he said.

Tucker said the brokerage industry's tremendous embrace of IT tools will put it in good stead as the industry becomes more digitally driven than ever. The sector is the "most voracious consumer of technology" of any industry, he said. By contrast, shippers are behind the curve in IT uptake, he said. Today's Transportation Management Systems (TMS) that shippers use "are nowhere close to nimble," he said.