Feds Urged to Rate ‘Unrated’ Trucking Companies for Safety as Industry Debates New Rating System

Dec 10, 2023Supply Chain Chronicles

Summary

Trucking companies and brokers are urging the Federal Motor Carrier Safety Administration (FMCSA) to assign safety ratings to carriers operating without one, a situation affecting over 90% of the freight market. FMCSA is exploring a new method for determining safety fitness, as revealed in a preliminary advance notice of proposed rulemaking. Currently, a significant portion of carriers lack ratings, prompting concerns among industry leaders. Various stakeholders propose solutions, including a simplified fit/unfit system, a single “unfit” category, or a five-point rating system. However, achieving consensus on the best approach remains a challenge.

Following is a summary of an article written by John Gallagher, with FreightWaves reporting agency, 12/1/2023.

Feds told to start rating ‘unrated’ trucking companies for safety

Opinions vary on whether to transition to a two-tier rating regime.

Major players in the trucking industry are pushing the Federal Motor Carrier Safety Administration (FMCSA) to assign safety ratings to carriers without such designations, covering over 90% of the freight market. The move is prompted by concerns about the effectiveness of the current safety fitness determination (SFD) system, with 94% of eligible carriers lacking a safety rating, according to FMCSA data.

The Trucking Alliance, representing leading truckload carriers like J.B. Hunt and Schneider National, argues that leaving carriers unrated creates disparities and forces brokers and shippers to rely on alternative metrics for safety-based decisions. The Transportation Intermediaries Association supports a swift rulemaking process, citing challenges faced by the logistics industry due to the misuse of safety ratings, resulting in higher insurance rates and reputational damage.

FMCSA acknowledges regulatory loopholes in its current SFD system, allowing carriers with conditional ratings to continue operations despite safety concerns. The agency also concedes that its limited resources only allow a small percentage of carriers to receive safety ratings annually.

Industry stakeholders propose different solutions, from a simplified fit/unfit rating system to a more nuanced five-point scale. Tesla supports the latter, emphasizing the need for clarity in the current confusing system. The debate between a binary fit/unfit approach and retaining the existing three-tier system remains unresolved, with carrier groups like the National Motor Freight Traffic Association advocating for the latter to avoid compelling carriers to suspend operations during rating reconsiderations.

As FMCSA explores a new SFD system, opinions on the path forward diverge, with the industry seeking a more transparent and effective approach to ensure road safety.

(Credit) John Gallagher, FreightWaves. The original article can be found here.

FreightWaves is a price reporting agency (PRA) focused on the global freight market and the leading provider of high-frequency data for the global supply chain.

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