Shippers and freight brokers have dodged a bullet, escaping a burden that could have wreaked havoc with their operations and potentially threatened the livelihood of some small to mid-sized truckers.
In early March, three truck trade associations reached a mediated settlement with the Federal Motor Carrier Safety Administration (FMCSA), the agency overseeing the newly minted CSA 2010 truck safety program, over the CSA methodology used to measure trucker performance. Under the settlement, which went into effect March 25, FMCSA agreed to state on its website that carrier data displayed in the agency's "Safety Measurement System"—the mechanism used to rate carrier performance—should not be used to "draw conclusions about a carrier's overall safety condition."
The agency added that unless a motor carrier in the system has received an "unsatisfactory" rating or has been ordered by FMCSA to discontinue operations, the carrier is "authorized to operate on the nation's roadways." Data collected as part of the CSA (Compliance, Safety, Accountability) program are made public on a monthly basis.
The regulatory legalese has real-world impact, according to attorneys representing shippers, brokers, and truckers. They claim that the FMCSA has clarified that it is the only entity authorized to rule if a trucker is safe to operate on U.S. roads. By extension, the attorneys argue, the agency has acknowledged that shippers or freight brokers should not have to interpret safety data to determine a carrier's fitness, and that a shipper's or broker's responsibility extends only as far as hiring an FMCSA-authorized carrier to move its goods.
Prior to the settlement, CSA had left unclear which party was actually responsible for weighing a carrier's safety record, attorneys argued. Henry E. Seaton, a Vienna, Va.-based attorney representing truckers and brokers, said the FMCSA, by its murky language, had effectively "created a new duty for shippers and brokers to credential carriers" for safety purposes.
Nasty ripple effect
This scenario was bound to create a nasty ripple effect for the industry, Seaton and other attorneys said. Worried about opening themselves up to liability and potential litigation if a carrier they have chosen is involved in an accident, shippers and brokers would shy away from truckers that might have been cited for a single safety infraction, even if they never received an "unsatisfactory" rating under CSA. In turn, small to mid-sized truckers that depend on a handful of shippers or brokers for their livelihood would find themselves effectively "blackballed" and, bereft of revenue, forced out of business.
The only winners, Seaton said, would be plaintiffs' attorneys looking to probe the deep pockets of shippers and brokers, citing the legal concept of "vicarious liability" under which shippers and brokers could be held responsible for the actions of a carrier they have hired, even if the carrier was not on their payroll and had a clean safety record at the time the shipper or broker performed due diligence. C.H. Robinson Worldwide Inc., the nation's largest broker, is embroiled in a long-running lawsuit that pivots on the "vicarious liability" issue; so far, the case is not progressing well for the broker.
Formally rolled out in late November, CSA as originally constructed became "an early Christmas present for the plaintiffs bar," Seaton told the Transportation and Logistics Council's annual meeting in early April in St. Louis.
FMCSA final authority on safety
Industry executives hailed the agreement, saying the new language from FMCSA reinforces the agency's statutory authority over highway safety and affirms the power of federal law to pre-empt any authority asserted by the states.
"The broker and shipper communities have been concerned that CSA 2010 would be misconstrued by courts, and exploited by the plaintiffs' bar, as setting forth a "vicarious liability' litmus test for shippers and brokers in their carrier selection process," said Matthew J. Jewell, executive vice president and chief legal officer for Forward Air Inc., which provides time-definite surface transportation and related logistics services to the North American air-freight and expedited LTL market. "This settlement reconfirms that the FMCSA is the final and only arbiter of which motor carriers are authorized to operate over our roadways. That duty does not fall to shippers and brokers."
"Prior to this settlement, CSA had confused shippers and brokers over their duties in carrier selection under federal law," said Tom Sanderson, president of Transplace, a Dallas-based third-party logistics service provider. The FMCSA has "affirmed that shippers and brokers fulfill their duty of due diligence by confirming that the carrier is authorized by the agency and has sufficient insurance coverage."
Jan Skouby, director of motor carrier services at the Missouri Department of Transportation, acknowledged that CSA implementation was "a work in progress." But she defended the program as a way to proactively reduce the risk of truck-related accidents and fatalities by weeding out sub-standard carriers and drivers.
Skouby said truckers that are permitted in Missouri tell her they benefit by having the ability to track their performance data each month. Highway fatalities in Missouri are at their lowest levels since 1949, but Skouby said they remain too high to suit her.
Skouby urged shippers, carriers, and brokers to "engage your state and local representatives and make the program really work."
Seaton and other defendants' attorneys claim they support any program that makes roads safer by eliminating the so-called bad actors. However, they argue that a criterion other than a "thumbs-up, thumbs down" vote from the FMCSA is the wrong way to go about it.
Highway safety "must be about equipping the [FMCSA] to efficiently monitor and police interstate motor carriers and certify, on a simple pass-fail basis, that carriers are fit for use unless placed out of service or rated unsatisfactory after due process," Seaton said in a prepared statement.