View
220
Download
2
Category
Tags:
Preview:
Citation preview
Best Practices for Acquiring Transportation Services
Surviving Capacity “Crunches” & The Impact of CSA 2010
GSA’s 2011 Transportation ForumWashington, DC, April 20, 2011
Jeffrey TuckerCEO, Tucker Company Worldwide, Inc.CEO, QualifiedCarriers.com Board Member & Treasurer, Transportation Intermediaries AssociationBoard Member, National Industrial Transportation League
Shrunken and weakened marketplace meets surging economy and freight volumes Fuel costs escalating Rapid-fire new regulations
Hours of Service (HOS) EOBRs Possible legislation Panic over CSA (formerly CSA 2010)
Many “Moving Parts”
Great Recession Trucking industry shrank over 15% Equipment purchasing nearly halted
Recovery 210% increase in Feb Class 8 truck sales –FTR Associates & ACT
Research 84% of carriers expect higher contract rates this year –UBS Investment 55% increase in “spot market” volume 4Q2010 –TransCore 8% growth in Jan. truck tonnage – American Trucking Associations 11.4% increase in Feb number of shipments YOY—Cass Freight Index 35% increase in Feb total freight expenditures YOY –Cass Freight Index
Freight Indices Improved
DOE Nat Avg. Retail Diesel: 4/18/2011 $4.105 Prior Year $3.015 vs. 4/18/2010 $1.031 Increase 33.5%
Factors at play: Middle East & North Africa events US cold winter Significant increase in freight moving (LA/Long Beach activity
increased 25% in 2010 vs. 2009, a record YOY increase) US EIA expected record $85.17 per bl. in 2011 ($101.13 on 3/11) Transport industry increases use/demand
Fuel Costs
FMCSA (USDOT) launched first phase12/12/10 Replaced SafeStat (SEA Scores) Enormous new emphasis on driver behavior
Bad drivers fired, driver pool reduced, safer drivers sought ($$$) 2 driver scores (unsafe driving & fatigued driving) were correlated to crash
risk in first study Behavior of some shippers and brokers: overreaction
Some rewriting contracts to eliminate carriers with a BASIC Alert before they understand the program, or the consequences
Shippers are afraid of costly litigation (negligent hiring & vicarious liability for carriers’ accidents
CSA (formerly CSA 2010)
What are CSA BASICs?
SMS 6 BASICs + Crash Indicator
Examples of violations include:
Unsafe Driving Speeding, reckless driving, improper lane change, and inattention
Fatigued Driving HOS, ill, fatigued, logbook errors
Driver Fitness Invalid/no CDL; endorsements, medical cert.
Controlled Substances & Alcohol
Use/possession alcohol, illegal drugs, misuse of Rx
Vehicle Maintenance Brakes, lights, mechanical defects, failure to repair
* Improper Loading/Cargo Securement
Shifting Loads, spilled or dropped cargo, unsafe HM
* Crash Indicator Histories/patterns of high crash involvement
* Not available to the pubic to view
Total “For Hire” Motor Carriers: 155,240
Of Carriers with at least 1 BASIC score reported: Carriers with at least 1 score: 54,813
(35% of Total) Carriers w/ 1 BASIC Alert: 21,640 (40%) Carriers w/ 2 BASIC Alerts: 7,594 (14%)
Carriers w/ Unsafe Driving Alert: 8,448 (15%) Carriers w/ Fatigued Driving Alert: 21,837 (40%)
Sources: USDOT & QualifiedCarriers.com, through April 7, 2011
Current State of U.S. Truck Safety Data
* FMCSA Safety Rating alone determines a motor carrier’s fitness for use, and should always take precedence over, and clearly outweigh, any single score, or collection of scores, or data set, including CSA’s SMS or BASIC scores.
* Some courts may differ, so why has TIA arrived at this determination?
Collectively, all of FMCSA’s data, and all of its law enforcement designed data and processes, its carefully designed, internal, non-public processes applied to all of its data, still do not arrive at a Safety Rating for a motor carrier.
* FMCSA new guidance (March 2010):
“Unless a motor carrier in the SMS has received an UNSATISFACTORY safety rating pursuant to 49 CFR Part 385, or has otherwise been ordered to discontinue operations by the FMCSA, it is authorized to operate on the nation’s roadways.”
TIA Formal Position on FMCSA Safety Data
Expect and build increases to your freight budgets 5-15% each of the next two to three years (*)
Introduce and encourage flexibility in your operations and freight expectations
Build your transportation resources carefully. Quality of relationships matters most.
Rely on existing partnerships that work. Encourage your Agency leadership to contact
FMCSA.
(*) Sources: Baird, FTR, BB&T
“Crunch” Survival 2011-2012
Be attractive to carriers and service providers Carriers are firing shippers Use drop trailers if volume can sustain it Shorten or eliminate driver waiting time (keep drivers
happy) Add lead time to orders. Pre-book as often as possible
& beat the competition to the truck. Prohibit your carriers from using other carriers
on your freight. This is double-brokering. It’s illegal, voids most cargo insurance & eliminates SOP & security training.
“Crunch” Survival 2011-2012
Introduce new service providers now If you wait, it will be too late Relationships must be built before capacity becomes precious Brokers & 3PLs with strong procedures can become your most
precious resource Consider CSA BASIC scores as a good service indicator
Tends to find better performers Provides limited quantifiable evidence regarding the carrier’s
operation Spend on-going resources to train service providers on
your needs, SOPs, Security. Then go audit them.
“Crunch” Survival 2011-2012
Jeffrey Tuckerjefft@TuckerCo.com www.TuckerCo.com
www.QualifiedCarriers.comwww.tianet.org
856-317-9600, ext. 122
Thank you
Recommended