Stop playing Russian roulette with trucks
The FMCSA is committed to getting unsafe truckers off the road, and Administrator Ferro has, in essence, put shippers on notice. Stop playing Russian Roulette with trucks! If your company uses even one unsafe carrier, and something bad happens, your company will pay a price and (in the words of Administrator Ferro) be “held accountable.”
in the NewsState of Logistics 2016: Pursue mutual benefit Report forecasts growth in automated truck loading systems B2B Industrial Packaging acquires Alpine Distribution’s packaging division Corrugated industry links rise in recycled content of boxes to advances papermaking technology The Benefits of Shared Transportation & Supply Chain Networks More News
“I will continue to use any resource within my authority to hold shippers accountable.”
-FMCSA Administrator Anne Ferro, TheTrucker.com, January 3, 2014
Last week, the issue of truck safety made headlines when a horrific truck accident killed an Illinois Tollway worker and left a state trooper in critical condition. Unlike the weather-induced crash two weeks ago in Northern Indiana, which involved 15 trucks, this accident was caused by a truck driver who was apparently at the end of a 36 hour marathon trip.
The Chicago Tribune reported that the driver allegedly falsified his log books and had been previously cited for numerous other safety violations. And, as you might suspect, the motor carrier’s safety record should have raised numerous red flags for any shipper or third party. That is, any shipper or third party who bothered to check that readily available data.
Why was this unsafe trucking company still in business? Because shippers continue to tender freight to unsafe carriers who have no business being on the road.
And that brings us back to Administrator Ferro’s comments. The FMCSA is committed to getting unsafe truckers off the road, and Administrator Ferro has, in essence, put shippers on notice. Stop playing Russian Roulette with trucks! If your company uses even one unsafe carrier, and something bad happens, your company will pay a price and (in the words of Administrator Ferro) be “held accountable.”
Why are companies using unsafe carriers?
Unfortunately, the debate over the FMCSA’s CSA program has obscured a business reality. Companies with rigorous vetting and control programs to govern their suppliers often throw common sense out the window when it comes to selecting their motor carriers. Why does this happen?
With capacity tightening, and carriers moving to an auction environment, dock personnel have a dilemma: What do they do when they have a “hot” load on the dock that has to be delivered, and they can’t find a carrier to pick it up? When desperate, they often play “Dial for Carriers,” or call a broker and tell them, “Find me a carrier—any carrier—and get this freight delivered!” They throw caution to the wind instead of telling the VP of Sales or CEO that the freight isn’t going to get delivered on the desired date.
Three ways to minimize risk in selecting motor carriers
Fortunately, there are things you can do to minimize your risks when selecting motor carriers.
Before giving freight to a carrier, check the FMCSA’s database to see if there are any glaring red flags. If you are too busy, then hire a firm to verify that the carrier has, at a minimum, valid operating authority, appropriate insurance coverage, and that their safety record is not suspect.
Verify that you have valid transportation contracts, with adequate liability provisions, for 100% of the carriers that haul your freight. As an ex-auditor, when someone tells me that it is impractical to have contracts with every motor carrier, I ask: “Is there any other department within your company that does business with critically important suppliers without a contract?” The answer is most likely, “No!” Why should your transportation suppliers be treated any differently?
Have your internal auditors or risk managers review the insurance policies of the carriers who serve your company to make sure they have adequate coverage to protect your business—and that they remain insured within the parameters they originally represented when you hired them.
Additionally, use a systemic process to validate the information provided on the Certificates of Insurance. Based on experience, we know that relatively few shippers have any idea whether their carriers’ insurance coverage will protect their interests in the event of a lost or damaged shipment.
Vet your carriers or pay the price
Expect to spend more time vetting your carriers in the future. If you are relying on or expecting the FMCSA to audit every carrier and tell you which carriers you can use, here are some sobering words: “You’re dreaming!” Don’t expect the FMCSA to tell you which carriers you can use. They FMCSA does not have the manpower, the inclination, nor the resources to do your job! They put the data out there for a reason. They want shippers and third parties to use the data and resources to make informed and sound decisions when selecting carriers.
If your company is unwilling to use internal resources or hire a firm to assist in vetting your carriers, you run the risk of using a questionable carrier. When that carrier is involved in an accident with a fatality or serious injury, you could be liable. If you are taking that risk, you should contact your attorneys right now and tell them to brush up on transportation law. When Administrator Ferro follows through on her threat to hold shippers accountable, they could be very busy!
About the AuthorMike Regan Mike helped grow TranzAct Technologies to become one of the largest privately held logistics information and freight audit and payment companies in the United States. He is extremely active in and participates on numerous boards of industry specific organizations and is a highly sought after speaker for transportation related topics across the country.
Subscribe to Logistics Management Magazine!Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
Megatrends in ocean freight Ocean Cargo Roundtable: What’s in store for 2017? View More From this Issue