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Taking A Closer Look At Liability Through The Lens Of MVRs

Is your fleet monitoring program up to the task when it comes to monitoring for risky behavior? If you aren’t identifying unsafe situations, you could be unnecessarily exposed. Have you considered continuous motor vehicle record (MVR) monitoring as a solution to approaching truck driver management and real-time behavior management?

For many years both state and federal governments have let MVRs fall by the wayside as tools to assess and modify fleet policies and operator behaviors. Perhaps a hiring manager would pull the record prior to hiring or during an annual review, but otherwise, MVR pulls were generally infrequent and unused. Today, many are recognizing that liability can be managed through increase truck driver MVR reviews.

Looking at Liability

Ask just about any fleet owner or motor carrier and they will tell you liability costs continue to rise, pretty much across the board. In fact, according to the Network of Employers for Traffic Safety (NETS), accident costs in 2015 averages around $38,000 per incident. When you add health benefits and other accident-related cost, that number could climb to up to half-a-million dollars or more.

When you consider those kinds of costs, doesn’t it make sense to take advantage of every possible method of reducing risk? Continuous MVR monitoring provides motor carriers with meaningful data points of monitoring risk profiles associated with their truck drivers. When combined with other fleet safety systems, a fleet manager can take a holistic and scalable approach to monitoring and training their truck drivers.

When the numbers are crunched, NETS study compared off-the-job crashes to those that occur on-the-job and the numbers are pretty staggering. When a truck driver gets into a crash off-the-job where a person is injured, employer costs can range around $5,000. On-the-job and that number rises to around $73,000. Liability claims shoot that number into the six figures.

Liability and crash litigation liability expenses directly hit a motor carrier’s bottom line, but more than that there is a human toll to consider. Yes, incidents like these can send revenues tanking, but they can also have long-lasting impacts on families.

While continuous MVR monitoring isn’t the cure-all for accidents, as they will still happen, when combined with other safety and monitoring systems, it can have a big impact on a motor carrier’s overall safety measures. Receiving ongoing reports regarding your operator’s MVR can lower a fleet’s liability exposure.

Types of Liability

There are different types of fleet liability that a motor carrier must consider. When it comes to an accident, fleets can face two different liability types: direct and vicarious. Let’s take a closer look at each one:

  • Direct Liability: A fleet can be held directly liable if a person within the company becomes liable to another based on their own action or omission.
  • Vicarious Liability: This legal principle states that a party can be held liable for the negligent actions of another party. If two parties have a special relationship, such as owner-operator to fleet, the fleet can be held responsible for the actions of the employed party. Vicarious liability could be imposed in a situation where an employee commits a wrongful act within the scope of their employment.

There are situations where a company might be better off claiming vicarious liability rather than being directly liable. In many states, punitive damages can be avoided if the driving history of the offending party doesn’t come into evidence. The only drawback to this situation is if the truck driver in question is held liable, the fleet can be held to quite a large summary judgement.

There are also two types of negligence, both of which directly relate to liability. The potential liability risks will vary depending on the local jurisdiction, but the two types of negligence include:

  • Negligent Entrustment: When a company or individual is held liable for negligently entrusting someone with “dangerous instrumentality,” which includes a vehicle, in a situation where said instrumentality causes death or injury to a third party.
  • Negligent Retention: If an employment-related claim involving a plaintiff saying an employer failed to release an employee they knew was behaving in an irresponsible manner. One example of this would be a motor carrier retaining a truck driver despite several known DUI violations.

Claims of negligence relating to a fleet generally comes down to fleet leadership not exercising their due diligence with reasonable caution or care where appropriate.

Move Beyond Good Enough

While the “good enough” approach worked well in the past – pulling once a year or less – it is a risky proposition nowadays. Not only does a fleet increase their overall risk exposure, but if major infarction is revealed about one of their truck drivers, they could face public backlash.

For example, what if a fleet pulls a truck driver’s MVR once a year, but they end up with a violation the day after their annual pull. You have essentially given them a one-year grace period in which just about anything can happen.

Another example would be a truck driver not maintaining a valid license. This represents an unacceptable safety risk for fleets. If you have a continuous MVR monitoring program in place, you will be immediately notified of any changes in eligibility. This way the risk can be mitigated immediately.

When a truck driver’s risk profile is heightened, he or she may be more likely to be involved in an accident. This scenario results in unnecessary and increased liability. Motor carriers must ensure they are proactively addressing issues related to truck driver eligibility. In this way, continuous MVR monitoring provides an effective hedge against expensive liability lawsuit.

Making the Most out of MVR Monitoring in the Court of Law

Not only does continuous MVR monitoring offer fleets an effective early detection, efficiency, and money-saving solution, but it also greatly improves your fleet’s reputation in case a liability case does arise.

The fact is this, a plaintiff’s attorney is very good at finding issues with a truck driver’s license should the case end up in court. If your fleet is employing a risky truck driver, claiming ignorance of a violation will not absolve it from responsibility in the event of a lawsuit.

Another avenue of approach a motor carrier can expect from a plaintiff’s attorney in court will be the fleet’s perceived inability to spend money on a low-cost safety solution. Why would a motor carrier not spend such a small amount of money on a fleet safety endeavor that can yield big dividends?

Furthermore, a jury will be more inclined to question other safety practices and policies if the fleet is inconsistently pulling MVRs or only pulling them for annual reviews. Trucking companies have an obligation to keep close track of the driving status of truck drivers on their payroll. And this goes for everyone from senior executives to sales managers and service technicians.

Starting the Process at Hiring

Considering driver safety initiatives should start as soon as the employee walks through the front door, the same should be said for continuous MVR monitoring. While there will be an initial review to discover any problems, it should be ongoing to prevent unnecessary risk and liability exposure.

Most fleets follow a standard model of annual review, with a 15-minute evaluation of driver records for an example fleet of 500 – 1,0000 vehicles. This simply does not provide enough time to complete the due diligence necessary to ensure a comprehensive level of fleetwide safety.

Instead, continuous MVR monitoring programs provides alerts and updates when violations, suspensions, and convictions occur. No longer will fleet managers have to spend tons of hours manually reviewing records to find problems. Instead, notifications will be spread out through the year. Identifying risky truck drivers becomes easier and allows fleets to offer the individualized attention their employees require.

Even better, continuous MVR monitoring is a low-cost solution. The average cost per truck driver for continuous MVR monitoring programs averages around $15 per year, per truck driver. The fact is, the administrative requirements are low, so having these alerts set up should be a simple matter for fleets both big and small.

Imagine if you prevent just one major safety event from occurring because of continuous MVR monitoring, the service pays for itself many times over. If your fleet works across state lines, some continuous MVR monitoring programs provide an interconnected network that can be advantageous when working on an interstate basis.

The fact is, in today’s day and age, motor carriers need to be utilizing every safety and monitoring measure they can. To compete with other motor carriers who are demonstrating a commitment to safety through every means possible, fleets should be investing in low-cost, high-safety programs like continuous MVR monitoring. Having it as part of your comprehensive safety management portfolio could be just what your business needs to reach new heights.

Your Ultimate ELD Mandate Guide – Part II

Welcome back to Part two of our ultimate ELD guide. As this mandate has become real, it is incumbent on our industry to ensure we are fully compliant, whether we like or not. Let this guide, both Parts I and II, be your final resource for making your way through the new ELD landscape

In our previous post, we talked about the mandate and the ELD itself, how it works and what it is supposed to do. Today we will dig deeper into how a fleet or owner-operator should go about choosing the ELD that is right for their trucking application.

ELD Compliance and Third-Party Verification

While most motor carriers have already picked their ideal ELD candidate, some still have not. Whatever you do, make sure you don’t cut corners or use a non-compliant device in the hopes that it will make do. In the eyes of law enforcement, an ELD is either compliant or it is not.

The FMCSA specifically states on their website that “prior to purchasing an ELD, carriers and drivers should confirm that the device is certified and registered with FMCSA.” To find out if a device is compliant, follow this link.

It is important to note that ELDs not vendor-certified through the process laid out by the FMCSA may still be compliant. Of course, self-certified ELDs come with no guarantee, so motor carriers must make sure they do all the proper research before making a final decision.

The FMCSA clearly states that it is the motor carrier’s responsibility to ensure the ELD they are using fully complies with the law. The FMCSA will make attempts to let the public know if a device is removed from the list, but motor carriers are still advised to check the list or sign up for ELD updates. For more information on what the FMCSA specifically requires, you can view their checklist here.

Fleets may use a third-party to verify their ELD meets all the compliance rules, but it is not specifically required within the outlines of the mandate. For many fleets, third-party verification is not necessary, simply because the requirements are not to complex that a fleet can’t easily ascertain compliance validity themselves.

A critical aspect of ensuring ELD compliance is utilizing a device that can communicate with law enforcement. Inspection officials should be able to quickly and easily read the ELD’s data transfer. One way to ensure your device is compatible with this requirement is to check the ELD File Validator on the FMCSA’s website. This is not a mandatory requirement, but it will help vendors properly verify whether their ELD has a data transfer read option. Motor carriers can request that their ELD supplier provides them with a data file. If the data file transfer works, then the ELD can be verified as in compliance.

ELD Usage and Truck Driver Harassment

If there is one rule that relates to the ELD rule where truck driver harassment and coercion are concerned, it is the January 2016 “Prohibiting Coercion of Commercial Motor Vehicle Drivers” rule.

This rule was specifically designed to prevent motor carriers, shippers, receivers, and anyone else working within the transportation or trucking industries from coercing truck drivers to violate any of the FMCSA’s trucking safety regulations.

The interesting thing is the truck driver harassment and coercion provisions – as important as they are – might be one of the least understood parts of the mandate. The definition of harassment is clearly defined by the FMCSA as any action that would result in a truck driver violating FMCSRs 49 CFR 395 or 49 CFR 392.3. Those sections of the FMCSRs specifically forbid motor carriers from requiring a truck driver to operate a commercial motor vehicle if they are impaired due to fatigue, illness or anything else that could adversely affect their ability to operate the vehicle safely.

If an action is to be considered harassment, the offending action needs to include information generated or available through an ELD. If a motor carrier instructs a truck driver to falsify a change of duty status or any other aspect of ELD data recording, it is considered harassment and carries severe penalties. If a truck driver feels they have been a victim of harassment under the FMCSA’s definition, they may file a written complaint under 49 CFR 386.12(b).

Fortunately, ELDs were specifically mandated so that it would be much harder for a motor carrier or truck driver to falsify log information. ELDs are designed to allow only a limited number of edits and even then, within certain circumstances. If a motor carrier tries to force a truck driver to falsify information, a digital paper trail would easily lead right back to them, thus incentivizing any form of cheating or coercion.

While the requirements an ELD must make to comply with truck driver harassment and coercion provisions may seem insignificant, their impact is quite important. When evaluating your ELD provider, make sure you ensure it is compliant with them.

Enforcement and the ELD Mandate

One major change to a recent rule is in how truck drivers or fleets are dinged if they do not have an ELD. The FMCSA and CVSA recently announced that truck drivers will not incur points on their CSA score if they are not utilizing a compliant ELD, provided they are still in compliance with the overall hours of service rule.

Expect fines for violations of hours of service rules to be pretty much what they are today. One thing to note is that ELDs are not designed to automatically report violations to law enforcement, however law enforcement should be able to quickly view a truck driver’s logs, whether it be at a roadside inspection or FMCSA audit.

The benefit here is that inspections will start to flow a lot smother once the ELD mandate goes into full effect, relieving fleets and truck drivers of a cumbersome task that often took up far more time than will be needed with the ELD mandate in place.

Federal ELD specifications allow for a USB transfer of information, but many local jurisdictions will not allow sensitive data to be stored on an external device. For this reason, many states will likely go back to what they are doing now, which is to analyze the necessary data using email, wireless web transfer, the device display, or a printout of the HOS graph.

Truck drivers will also be required to have documentation in the vehicle describing the ELD and a manual regarding its use. Data transfer instructions, a blank copy of the truck drivers record of duty status, and a written method for reporting ELD malfunctions also must be on hand. If an ELD stops working, the truck driver must immediately not the malfunction, date, and time and then provide a written notice to their motor carrier within 24 hours.

Other ELD Features

If you look at the FMCSA’s list of approved ELDs, the first thing you will notice is that there are a lot of them. There certainly is no absence of choice where ELD selection is concerned. And as we mentioned in Part I, they have many different features, so we will look closer at those today.

Choosing additional features for your ELD should be based on the job your fleet does. Do you require an ELD with sensors that can monitor temperature, vibration, fluid levels or more? Some fleets may use systems that can only talk to a Windows or Android-based interface. If required, a fleet can option an ELD with a feature to mark a signature for proof of delivery. Other ELDs can be spec’d for situations where interstate rules apply and, as we mentioned in Part I, manage cross-country rule changes.

One major consideration when choosing an ELD is evaluating how it will interact with other software platforms your fleet uses. Modern motor carriers generally utilize advanced transportation management systems. Will your ELD solution integrate and communicate with the transportation management software you are using?

Some ELD providers also specialize in fleet management software. Going down this road ensures compatibility, but may also come with higher costs. Motor carriers must make careful evaluations of the systems they have in place, the systems they plan to use, and any potential interoperability problems.

How big you plan to grow your fleet is another consideration. Will your ELD be scalable from a few trucks to a much larger fleet? If you can’t accommodate future growth, look to another provider. What kind of customer service and technical support can you expect to receive from your ELD provider?

For those who decide that they don’t need an ELD with all the features, it is most important that the ELD automatically log hours of service information for truck drivers. It also must accommodate displaying those records upon request.

With so required for trucking companies to be in compliance with the ELD mandate, many are wondering if they will be ready in time. If you need assistance figuring out your avenue of approach, refer back to our handy guide!

Your Ultimate ELD Mandate Guide – Part I

We’ve written about it a lot, but with the ELD mandate now upon us, we wanted to take a moment to put together what we hope is one of the most comprehensive guides to navigating the ELD mandate in existence. There is a lot to consider as one of the largest new regulations governing the trucking industry in a generation goes into effect and it is important to be prepared. Are you fully aware of every aspect of the ELD mandate? Get ready to bookmark these blogs!

Whether you are a fleet manager, owner-operator, or shop technician, the ELD mandate touches some aspect of what you do. What are some of your top ELD mandate questions? In Part I of our two-part series on the topic, we will go line-by-line to address what we hope are all the questions you could possibly have. Let’s dive in.

What is the ELD Mandate?

We get it, you likely don’t have this question because if you work in the trucking industry, you probably know exactly what it is. A trucker would have to be spending most of his or her time in a cave to have not yet heard of the ELD mandate. Passed by the Obama Administration – and one of the remaining regulations under the Trump Administration – the electronic logging device mandate, as it is called in long-form, will have gone into effect on December 18, 2017.

The mandate itself requires most fleets to cease using paper logs and begin using electronic logging devices. In cases where a fleet is using an AOBRD – or automatic on-board recording device – they will be able to continue using the devices for up to two more years. The final date by which AOBRDs will need to be switched out for an ELD is December 16, 2019.

The ELD mandate was born out of a need to replace the legacy process of tracking time and movements by paper. While there have been many sides taken in the debate over the ELD, from both within the trucking industry and without, if the ELD mandate was intended for a benign reason, it was to streamline a process that had become quite cumbersome.

While many do not agree with the ELD mandate, it certainly is here. With the industry required to comply with it, let’s take a closer look at the device itself.

Examining the ELD

An electronic logging device is a technical piece of equipment designed to record specific vehicle parameters and information. It is generally synchronized with the vehicle’s engine and may or may not also be in communication with other sensors around the truck – or with dispatch.

ELDs come from many different manufacturers, and finding one compatible with your fleet- and use-type is extremely important. ELDs should also allow truck drivers to add entries where their record of duty status (RODS) is concerned.

A primary function of an ELD should also be to communicate with law enforcement where required. It should be able to adequately show compliance with existing hours of service regulations.

ELDs are also quite different from the previously mentioned AOBRDs. It is important for fleets to remember that not all AOBRDs meet the specifications laid out by the FMCSA. ELDs are held to a higher standard. ELDs must be able to handle log edits, annotations, and communication with other systems, those used by both manufacturers, fleets and law enforcement.

Yet, where ELDs must provide a new set of information, some fleets can still convert their AOBRDs into ELDs. There are cases where they look different, but they can still produce much the same information, depending on the application.

Another question many have asked is whether an ELD must be its own specific device or not, or if can be a piece of software on a smartphone or other device, and the answer is yes. If the device being used meets the reporting and editing requirements set forth by the FMCSA, it is clear for use as an ELD device in a commercial motor vehicle.

It is important to note that if you are using a smartphone or other wireless device, it must be mounted in an upright position during vehicle operation. Although smartphones and other devices can be used, in many cases they cannot meet some of the core mandate requirements. For example, without proper software, a smartphone by itself cannot record distance. Always ensure you are staying compliant by using the proper device. Specifically, the device must meet the requirements of 49 CFR 395.15.

Yet, an even more important thing is to ensure fleets know what the key components of the regulation are that their ELD must follow. It is one thing to have the device, but it is another to follow the rules.

Examining the Regulation

While installing an ELD device that conforms to FMCSA-guided specifications sits at the core of the ELD mandate, there is a regulatory sub-surface driving the enforcement component. The regulatory component includes the following:

  1. Commercial truck drivers must use an ELD to prepare HOS records.
  2. ELD manufacturers and the ELDs themselves must be certified and registered by the FMCSA.
  3. Commercial truck drivers and motor carriers must have a specific set of supporting documents to cross-reference information contained within the ELD or requested by law enforcement.
  4. Commercial truck drivers cannot be harassed based on ELD data.
  5. A recourse for truck drivers who feel that they have been a party to harassment.

Expect both state and federal law enforcement to immediately begin applying specific regulatory guidelines regarding the rule come December 18.

How Does the ELD Do Its Job?

An ELD designed to the correct specifications should do several different things. There are many different data sets that it tracks, and they include:

  • Date
  • Time
  • Location
  • Engine hours
  • Vehicle miles
  • Truck driver identification/fleet information
  • User
  • Vehicle and type

While ELDs are not required by the mandate to gather information on things like speed, braking, steering and other operational functions, many ELD manufacturers are recognizing the multi-faceted potential of their devices and are making ELDs much more versatile. As part of a comprehensive in-cab safety system, ELDs carry great benefit.

ELDs are also designed to determine and track driving and non-driving statuses. The threshold for when an ELD starts recording in “drive mode” is any time the vehicle goes over 5 mph. If it is stopped at zero miles per hour for at least three consecutive seconds, it should be recorded as “at a stop” by the device.

If a commercial vehicle is in “drive mode” for at least five consecutive minutes, the ELD will prompt the truck driver to confirm the status, and if it is wrong, to enter the correct status. The truck driver will have one minute to respond to the prompt before the ELD switches the status to on-duty/not driving.

When recording location information, the ELD will take a new record at 60-minute intervals if the vehicle is in drive mode. It will also make a digital location note whenever the operator turns the vehicle on or off or changes the duty status.

ELDs should be designed to record location to within an approximate one-mile radius, although there is a provision in the mandate stating when a commercial motor vehicle is marked for personal use, the ELD reporting accuracy should expand out to a 10-mile radius. This change was written in to protect truck driver privacy.

One thing the location function of the ELD does not do is identify specific street addresses. Instead, the ELD converts change of duty status location information as latitudinal/longitudinal coordinates. The software will then use a GPS component to identify where the vehicle is. While ELDs are not required to be designed for real-time vehicle tracking, motor carriers can opt for the option provided it does not violate the anti-harassment guideline set out within the mandate.

There are situations where American truck drivers will need to cross a border, say into Canada. Happens all the time, so what do they do? The FMCSA ruled that the ELD manufacturer or provider can make the ELD able to meet the requirements of the country where monitoring hours of service is concerned, but they don’t have to, and few do.

The difference here is that Canada does not have a rule in place governing ELDs, although it is expected to in the future. Since U.S. regulations don’t require ELDs to conform to another state’s rules, it is important for fleets and truck drivers to make sure they are always in compliance wherever they are operating.

Wow! That was a lot of ELD information, but guess what? There’s more. The fact is, the ELD mandate is a big deal, and there are a lot of new things truck drivers and motor carriers must learn to make sure they are following it. Not complying can result in expensive fines or worse. So, why not join us in Part II of this series, where we continue our deep dive into the ELD mandate, what you need to know about it, and how it will impact fleet operations.

Crazy Happenings In The World Of GHG Phase 2 And Trailers

While they may initially seem like not-too-exciting topics, GHG Phase 2 rules and trailers have been heating up in the news lately. Court filings have begun to stack up as GHG Phase 2 rules are challenged on trailer-related provisions.

The newest of these came in the form of an October 12 filing, in which the Environmental Defense Fund, along with a coalition of health advocacy groups, asked that the U.S. Court of Appeals for the District of Columbia Circuit reject another motion filed by the Truck Trailer Manufacturers Association (TTMA).

The statement released by the group argued that the Phase 2 trailer provision motion to stay “attempts to artificially divide the tractor from the trailer to claim that TTMA’s members cannot be regulated directly because they are not manufacturers of motor vehicles.”

The group went on to note that the TTMA “has likewise failed to demonstrate that its members will be irreparably harmed absent a stay of standards that simply require manufacturers to equip more of their trailers with widely used technologies that deliver fuel savings.”

So, What’s the Deal?

As you likely know, business people really dislike uncertainty. And they got a full dose of it when the Environmental Protection Agency (EPA) announced it would potentially roll back the trailer and glider kit provisions spelled out in the GHG Phase two fuel efficiency regulations.

Jointly written by the National Highway Traffic Safety Administration (NHTSA) and put to paper October of 2016, GHG Phase 2 was designed to reduce carbon emissions. It builds on the work previously completed on GHG Phase 1 regulations.

As the rule is laid out, Phase two rules were set to go into effect for trailers beginning in January of 2018. Limitation of glider kit production began last January. The rule also spells out how manufacturers should design equipment for the next decade. The goal of the rule was to reach emissions reductions by cutting the amount of fuel burned while sidelining older technologies – thus clearing the way for newer, more fuel-efficient technologies.

The change comes in the form of an August announcement from both the EPA and NHTSA that they may in fact reconsider the rules. Specifically, targeted were regulations regarding box-type trailers. This definition includes dry and refrigerated freight and glider kits.

While neither agency has come out with specifics on what a potential rollback may look like, they have clearly laid out there intent to review the rules, which are set to go into effect in less than 60 days. This is where the uncertainty question comes in.

The original fight started when the TTMA filed a lawsuit in December of 2016 requesting that the D.C. Circuit throw out the trailer section of the GHG Phase 2 rule set to go into effect in January 2018.

In their initial argument, TTMA stated that “most heavy-duty trailers are custom-ordered, and the required lead time for scheduling production means that trailer manufacturers are having to quote orders for 2018 delivery that will force customers to purchase equipment they do not want and that will not produce any fuel efficiencies in the customers’ operations.”

The case has also been joined by California – who we will talk more about later – and Connecticut, Washington, Vermont, Iowa, Massachusetts, Rhode Island, Oregon and Vermont. In a joint statement released by the EDF, associated groups and the states represented, the groups stated that granting a stay of the rule would “delay these critical health and environmental protections for the duration of the litigation, which could last for years.”

The attorney representing the groups released a separate stating that “the trailer provisions of the [GHG Phase 2] Clean Truck Standards are based on cost-effective and widely available measures that have long been used by industry leaders, and have been effectively incorporated into state standards for the past decade. It is critical that these common-sense protections remain in place to reduce the dangerous pollution that causes climate change and save money for American families by reducing the costs for shipping goods.”

At the same time, the TTMA has been hard at work lobbying on behalf of regulatory relief across the board where trucking rules are concerned. Still, neither agency involved has yet taken any action, despite notifying the TTMA that they agree further rulemaking is needed.

Despite the recent litigation, many companies are operating as though there will be no change. In fact, most large fleets have already invested a lot of time and energy into complying with a rule most in the industry expected to stay intact. Still, that doesn’t mean everyone is on board.

The Trailer Industry Speaks Out

The trailer industry itself has had mixed reactions to the news. While one manufacturer was quotes in a news outlet as saying that they “We are encouraged by the EPA’s decision to reconsider the trailer provision in the GHG2 regulation,” others have complained that they need more certainty, for both them and their customers. Not knowing what equipment to include or not include puts some manufacturers in a bind.

Still, the TTMA couldn’t be more pleased by the news, arguing that the rule puts onerous requirements on trailer manufacturers whether the benefits of said requirements are proven or not. They specifically mention:

  • Aerodynamic enhancers
  • Special tires
  • Tire-pressure-monitoring systems

In their argument, the agency stated that many trailers operate at very low average speeds or sit a lot while loading and unloading. In these scenarios, they argue there would be little to no gain in fuel savings under the GHG Phase 2 trailer rules.

Another trailer manufacturer was quotes as saying that while they support efforts to make trailers more efficient, “the current EPA regulation for trailers is flawed in that it takes a ‘one size fits all’ approach, which in some cases offers no fuel savings and arguably increases fuel consumption, and even puts some fleets at a disadvantage.”

In the meantime, the other big player in the room, the American Trucking Associations (ATA) came out strongly against the move to squash the regulation, saying that rolling back the regulation would “upset national uniformity.”

In a statement released by their CEO, the ATA stated that in their belief, “by reopening the rule to reexamine trailers and glider kits, EPA has opened the door to California taking the lead, and a more aggressive track, in setting trailer standards. As representatives of an interstate industry. ATA believes a single national standard, set by federal regulators, is preferable to at worst, a patchwork of state standards or at best, a de facto national standard that is set without the appropriate opportunity for the entire regulated community – many members of which are not based in California – to weigh in.”

So, what, exactly, does California have to say?

The California Air Resources Board (CARB) has certainly made a statement regarding all this action around an otherwise back-of-the-room rule. According to an industry insider, CARB is quite likely to finalize its own regulations next year, lending credence to the ATA’s claim. It has even been reported that if the EPA plans on scrapping the rule, California may push even more aggressively on their regulations, setting up quite an intriguing showdown next year should all this come to pass.

Where many think there may be movement is in the area of glider kits.

What Are Glider Kits?

Glider kits are essentially new trucks powered by older, rebuilt or repurposed diesel engines and drivetrain components. Fleets operating specialty trucks have been known to utilize big rigs with reused engines and other components in a bid to save money. Certainly, there is nothing wrong with wanting to cut costs.

The problem is that under current GHG rules, starting in January of 2021, they will only be allowed into circulation as reclaimed equipment from junked commercial motor vehicles. The EPA’s assertion at the time was that glider kits using older, less-efficient diesel combustion engines produced far more emissions.

The EPA in their original ruling sited an increase in sales of glider kits from just a few hundred per year a couple of decades ago to more than 200,000 a mere two years ago. While some may have been designed in an effort to get around emissions, most were from fleets who simply had a cost-analysis that required them to look at used components to ensure the bottom line didn’t lurk into the red.

Under the new Phase 2 regulations, glider kits were to come under increasing restriction, with a whole new round set to go into effect this coming January. If the rule does not go into effect, it is likely we will see environmental groups take this battle to the courts.

Once stuck in the courts, any changes to the rule’s publication could be drawn out for years, in which case manufacturers will have already shifted into the new paradigm. What does this mean for the trucking industry? That uncertainty we were talking about is sure to stick around for some time longer.

Why Have Commercial Insurance Costs Shot Through The Roof?

You would think that with all the new safety technologies being equipped on modern commercial motor vehicles these days that commercial motor vehicle insurance should be lower than ever. Unfortunately, you’d be wrong. If anything, they seem to be on a never-ending upward trajectory.

Whether you are an owner-operator or one of the largest fleets in the trucking industry, insurance costs are going to put you in a pinch. But why?

For many fleets, a major expense item is represented by specific claims on the insurance line. Yet, this increase is not because there have been more accidents, but rather a result of inflation and rising trucking industry litigation costs. Even for a fleet not impacted by these factors will see a hit in their insurance.

So, what’s the total cost? Well, for 2016 alone, more than $700 million in claims were made against commercial motor vehicles, including trucks., according to a report completed by American Public Media’s Marketplace. These losses directly translate into rising premiums for industry businesses.

According to another report completed by a San Diego-based insurance group explains that over the last few years, there have been almost uninterrupted rate increases, for both small and large motor carriers, no matter the insurance type.

Fleets across the nation have been hit with higher premiums as a result. Whether local, long-haul, general freight, reefer or otherwise, everyone is feeling the pinch. Of course, some business lines see a more rapid rise than others, but no industry player is spared.

A Confluence of Factors

The reason why this is happening can be seen in several factors that all converged at the same time. First, it is critical that you understand how insurance works. Insurance companies generally make money in two different ways.

First, they profit off underwritten policies. Second, they invest customers’ premiums. Now consider that it can take up to seven years to close a claim. As a result, insurance companies will sometimes have to play the long game, with seven years to make money in the premiums paid until the claim must be settled.

Why does this matter? Remember the two ways insurance companies make money. If they aren’t making it on underwriting, they must make it back investing in the premiums paid. Since margins are so low on either, if there are inflationary trends or a greater number of claims coming in, the insurer has little choice but to hike rates to stay competitive.

In today’s case, these headwinds remain. Return on insurer investments have been low, which forces them to then look to make that money back on the policies they underwrite. Insurance costs to cover accident claims have also spiked in recent years.

Why? Because the economic recovery has put a lot more cars and trucks on our nation’s roads, which – by the law of averages – results in a higher rate of accidents.

It is true that highway fatalities had been on the decline for nearly a decade, thanks to safety advances, seat belt laws, new braking systems, and so much more. But in recent years, as we’ve reported, fatalities have risen alongside the rising national economy.

Shouldn’t Safety Cancel Out Increased Traffic?

One question on the mind of many an industry insider surrounds the reasons why fatalities have increased. Conventional wisdom says that even if there is more traffic on the roads, a far richer safety technology environment should mitigate any added risk, right? Wrong.

Remember, safety technology has come a long way, but so has technology in general. People behind the wheel are more distracted than ever, whether through a big, shiny tablet or smartphone or an in-dash entertainment system.

The increased frequency at which these technologies have invaded the space inside our vehicles directly correspond with an increased accident rate. When insurers evaluate claims, they do so based on the number of fatalities or severe injuries in an accident. Since 2010, the severity metric has been rising.

As trucks become more complex by the day, the costs associated with repairing such vehicles also rises. Since healthcare costs have also been rising at a rapid rate, situations where medical attention is required generates even more expense in litigation.

Believe it or not, insurance prices can also be directly correlated with the truck driver shortage. Since trucking companies have been hiring more and more younger, inexperienced truck drivers, accidents are happening in greater frequency. Truck drivers under 30 tend to get into more accidents than those over 30, and that trend is reflected in rising premiums.

Since there are few haven investments for insurers, as loss number increase, insurers are increasing truck insurance rates at a rapid clip. For insurance rates to fall, the insurance industry will need to see one or both of their income streams have a better long-term outlook.

This means insurers will have to start posting profits for several quarters before fleet premiums begin to drop. Any new insurance companies will likely face the same headwinds current market participants do, so added competition would do little to drop rates.

There is no Easy Answer

The problem is that there is no easy answer. It is a multifaceted issue. While continuing to increase safety technology usage is a start, it won’t go all the way. Whether it be through a reduction in distracted driving or a lowering of health insurance, a noticeable change in several factors would certainly help.

Consider that distracted driving is an easy one for fleets to address. One way is through creating and enforcing a policy banning cell phone use while driving. There are even apps that can be installed that will shut the phone down when the vehicle is in motion. Better training and incentives also go a long way in decreasing distracted driving.

Another problem easily addressed by a fleet, whether through technology or otherwise, is speeding. Fleets have turned to speed limiters, telematics, video-based training or otherwise, ensuring fleet vehicles run at a safe speed is not difficult.

It Isn’t Always a Novice Trucker

For many fleet managers, the automatic assumption when an accident occurs is that it was the work of a novice truck driver. Yet, it is just as important to pay close attention to behaviors of truck drivers who have been with the business for a long time.

As a matter of fact, the longer a truck driver gets away with a bad habit, the more ingrained and harder changed that habit becomes. Far too often, experienced truckers fail to take “near-miss” accidents seriously. When bad truck driving behaviors become hard-wired, crashes occur.

The best way to mitigate this effect is to address truck driver complacency in your training programs. Don’t hesitate to appeal to your truckers’ values and priorities as truck drivers. Make operating as safely and professionally as possible rewarding for your truck drivers. By showing them the impact they have on the road, you may get greater buy-in for your safety initiatives.

Relying on Safety Equipment

At some point, the rise in advanced safety technology use in trucking is going to start counteracting other factors that have results in insurance premium increases. Telematics, video and other safety technologies helps stop unsafe driving behaviors and provides guidance on how such behaviors should be addressed.

Another place where safety can play a key role is in spec’ing your vehicles for safety straight from the manufacturer. If anyone is taking safety technology seriously these days, it’s the OEMs. Utilize their expertise to your advantage.

There are seven major areas where safety technology can help you radically reduce your insurance premiums:

  1. Anti-lock brakes
  2. Stability control
  3. Lane-departure warnings
  4. Blind-spot warning devices
  5. Collision-avoidance systems
  6. Camera systems
  7. Sensor systems

GPS tracking technology has also proven itself in this arena. Stolen or lost freight does no favors for your insurance premiums. Having the technology in place to ensure your fleet assets can be tracked at all times will help lower costs.

In the case of lost or stolen vehicles, it is notable that law enforcement assigns a low priority to these cases. So, having technology in place that essentially does the job for them could help you big time in the long run.

In fact, fleets who choose to utilize GPS or other advanced safety technologies may find themselves on the receiving end of special rates or policy discounts from their insurer. Insurance companies often refer to these as anti-theft devices and the more of them you have installed in your fleet vehicles, the better.

In states where it is compulsory for insurers to offer discounts for using advanced safety technologies, installing them seems like a no-brainer, yet too few fleets actually do.

Is your fleet suffering under the burden of high insurance rates? If so, consider what you are doing to enhance the level of safety and security in your fleet. Are you doing enough to lower rates? Of course, there are many factors outside of your control, but that doesn’t mean you shouldn’t try.