To its critics, Compliance, Safety, and Accountability 2010 (CSA 2010),
the Federal Motor Carrier Safety Administration's (FMCSA) ambitious effort to remove unsafe drivers from the roads, has skated on thin ice
throughout its four-year life. In the wake of a federal government study released this week raising concerns
about the program's methodology, the ice may be thinning some more.
On Monday, the Government Accountability Office (GAO), the investigative arm of Congress, issued
a 111-page report analyzing the program's effectiveness in measuring the safety fitness of the more than 500,000 truckers
operating on U.S. roads each year. On one level, the report gave a thumbs-up to the program, better known as CSA
2010, and a controversial system called Safety Measurement System (SMS),
which tries to identify high-risk truckers by gathering carrier performance data from accident investigations or roadside
inspections and then grading the carriers by calculating violation rates for those analyzed and comparing them to similar
carriers over a matrix of seven categories.
According to the GAO report, SMS has improved public safety by broadening the number of potentially high-risk truckers
subject to the agency's "intervention." This often involves the issuance of warning letters but can also take the form of
unannounced inspections of a carrier's facilities. In a period of five fiscal years ending with fiscal 2012, FMCSA more than
doubled its number of annual interventions, GAO noted.
However, the report said the flaws in the system's methodology make it difficult for FMCSA to reliably assess the
safety risks of most carriers. GAO said that in order for SMS to effectively identify carriers most likely to be involved
in accidents, the violations that the agency uses to calculate SMS scores should have a "strong predictive relationship"
with crashes. But the federal regulations used to compute SMS scores are not violated often enough to strongly associate
them with the crash risk of individual carriers, according to GAO.
The report also found that most truckers lack sufficient safety data to ensure that their performance can be reliably
compared to other carriers. About 95 percent of the nation's fleets operate less than 20 vehicles, and FMCSA lacks the
funding to inspect such a broad universe frequently enough to collect even the minimum amount of data to generate a reliable
SMS score. The grading system is the agency's way of squeezing the most inspection productivity from scarce resources. Critics
allege this "grading on the curve" approach lumps together high-risk and low-risk carriers, making otherwise fit carriers guilty
by association and casting a cloud over the efficacy of the program.
The report urged FMCSA to revise its SMS methodology to better reflect the limitations it has in gathering safety information
and for using it to compare carrier performance. Those limitations should also be taken into account when FMCSA determines a
carrier's fitness to operate, the report said. GAO said the Department of Transportation, the FMCSA's umbrella agency, agreed
to consider the recommendations.
The GAO report was requested by the House Transportation & Infrastructure Committee. Failing to take any steps in response to
the findings would be tantamount to FMCSA, in the words of an individual close to the issue, "thumbing its nose" at the committee.
FMCSA plans to use CSA data when it opens a safety fitness rulemaking scheduled for later in 2014. In addition, it publishes
the SMS scores on its website. Neither the use of CSA in a rulemaking or the public disclosure of SMS scores sits well with
truckers, brokers, or shippers. For example, by making scores publicly available FMCSA invites erroneous carrier-selection
judgments based on inaccurate data, they argued. This, in turn, exposes shippers and brokers to significant liability risk
in the event of a crash-related fatality or injury if a plaintiffs' lawyer argues they chose a carrier that they thought
was in good safety stead but actually wasn't, or that they declined to rely on CSA data that showed a history of one or
two safety infractions, they said.
The best near-term remedy is "removing the scores from public view," said Dave Osiecki, executive vice president and chief
of national advocacy for the American Trucking Associations (ATA), a trade group of large carriers. The ATA has long supported
CSA's objectives but, over the years, has grown increasingly uncomfortable with the validity of the process. The association
said the GAO report confirms that the SMS scores don't present an accurate assessment of the safety of many truckers. The group
urged FMCSA to make immediate changes to the program.
In a statement on its website,
FMCSA said the GAO report shows that the SMS program has been more effective in identifying carriers for "targeted enforcement"
than the old safety measurement program, known as "SafeStat," which was replaced in 2010. According to the agency, researchers
analyzed the links between historical safety data and future crash involvement by taking two years of pre-SMS safety information
for a subset of carriers, running it through the SMS algorithms, and then following those companies' crash records for eighteen
months. The results showed that the companies that SMS would have identified for intervention had a future crash rate of twice
the national average, according to FMCSA.
In addition, 79 percent of the carriers that SMS would have ranked as high risk in at least one of the seven categories had
higher future crash rates compared to those the system would not have identified, according to the FMCSA statement.
Editor's note: An earlier version of this article incorrectly stated that FMCSA's intervention could take the form of announced inspections instead of unannounced inspections.
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.