Reality Check For Your Business Model
Living easy, Loving free
Season ticket for a one way ride
Asking nothing, Leave me be
Taken everything in my stride
Don't need reason, Don't need rhyme
Ain't nothin' I would rather do
Going down, party time
My friends are gonna be there too,I'm on a highway to hell
No stop signs, Speed limit
Nobody's gonna slow me down
Like a wheel, Gonna spin it
Nobody's gonna mess me 'round
Hey Satan, Paid my dues
Playin' in a rockin' band
Hey momma, Look at me
I'm on my way to the Promised Land,
I'm on the highway to hell!
Don't Stop Me! ACDC
49 CFR Section 395.3 provides "No motor carrier shall permit or require any driver used by it to drive a property carrying commercial motor vehicle, nor shall any driver drive such a property carrying commercial motor vehicle," beyond the limits in the hours of service regulations. This places an affirmative duty on carriers to take reasonable steps to prevent their drivers from violating the hours of service regulations. It mandates that drivers comply. If a carrier fails to comply, the FMCSA can issue fines, revoke authority to operate, downgrade a safety rating, or require installation of Electronic On Board Recorders (EOBR's) throughout the fleet. Plaintiffs' attorneys are well versed in these regulations. In the event of a lawsuit, logs and supporting documents or satellite positioning reports will be the first thing they request in discovery.
Before CSA, log violations were of little consequence to the driver unless the carrier had a very robust log audit and progressive disciplinary program. Now, if during an audit, a carrier has done a good job of log compliance, the FMCSA may decide to go after the driver. Thanks to CSA, violations directly affect the driver and his or her future employability. This is a game changer because for the first time drivers now have an incentive to comply. There has been an increased trend of drivers contacting the FMCSA to turn a carrier in who is forced them to run illegally.
If you have an alert in "Fatigued Driving" under CSA, it is time for a reality check. When the FMCSA does a log audit, they know exactly which drivers' logs to review because under the CSA system they know which drivers are causing the problem. They will demand those drivers' logs and the mobile communication positioning reports. As a result, many carriers fail the audit. Last week, I spoke with a representative from mobile communications company that sells EOBR's. He tells me that their sales are going through the roof, largely as a result of carriers failing audits and being required as a settlement with the FMCSA to install EOBR's in a very short period of time throughout their fleet. I have several friends who have experienced this. They complain of a loss in productivity and a sudden exodus of drivers.
The same EOBR representative also mentioned that they have had about 60 fleets pull out their mobile communication units entirely in a thinly disguised effort to make it more difficult for the FMCSA to catch their drivers evading the law. This is an egregious attempt to go from passive acceptance of violations to actively trying to help drivers evade the law. This forces the FMCSA in a log audit to rely on traditional supporting documents in an audit, instead of satellite positioning reports. This makes their job more time consuming, but they can still find violations and the extra work probably doesn't improve the auditor's attitude. If a lawyer or auditor knows you ripped these devices out, they will crucify you.
Others are encouraging their owner operators to get their own authority and plan to broker freight to them, in a feeble attempt to shift regulatory responsibility from the company to drivers. Recent court cases have placed liability on a broker for negligent hiring of a carrier. Does anyone really think that regulators and trial attorneys can't see through this subterfuge? If someone is really hurt badly in an accident when a driver was operating outside the hours of service regulations, do you want to explain these actions to a judge or a jury? Do you really want to lose control over compliance and still have the liability for outlaws?
The past two years have witnessed a lot of whining and consternation from carriers and drivers about new CSA and EOBR regulations.OOIDA successfully sued the FMCSA on new EOBR regulations claiming that these devices will lead to driver harassment. The court ordered the FMCSA to explain in their rulemaking how they have addressed driver harassment issues. Given the drivers' existing duty to follow the hours of service regulations, where is the harassment? I would venture that these things are only a problem if your drivers are not operating legally. CSA and EOBR's are simply just data mining and technology. Think about how much time and money we spend each week, filling out logs, scanning them and transmitting or mailing them in, auditing those logs, and counseling or taking action against violators. Think of how work that is done by planners trying to figure out how many hours each driver has before offering loads. CSA and EOBR's are more efficient methods to match loads and drivers while helping carriers and drivers meet regulatory responsibilities. They streamline and simply the log compliance programs within a company. They help drivers plan their time.
So, now how ridiculous is all this? Why are many in the industry are getting so twisted up on something that seems so simple? Compliance with regulations is nothing new. Hours of Service regulations have been on the books for decades. Unless you are in the mob, it is pretty basic that for any business to be successful must be able to generate a profit without breaking the law. Employees have, as part of their job, an obligation to follow the law. Owner Operators agree in their independent contractor operating agreements to comply with all laws. Failure to do so is a breach of contract. So how did many in the industry get to a place, where the simple requirement of following the law has them so challenged? No one likes to admit it, but the problem appears to be that so many carriers and drivers have not been following the law. These initiatives are threatening because they bring many carriers and drivers within compliance, with the resulting loss of miles for carriers and drivers.
Drivers and carriers who violate regulations and cut corners are polluting the rates for carriers and making drivers work harder for their pay. They are the skunks of the industry. Rates and driver pay must be set in the context of regulatory realities. To the extent loss of productivity and drivers is a problem for you, your business model is wrong. It will be corrected in time either through planning on your part or, in the absence of planning, by circumstances. I don't recommend waiting to fix this until you are ordered to install EOBR's throughout your fleet within 45 days. If you have an alert in "fatigued driving" and you don't make some quick improvement, you may expect a focused intervention from the FMCSA. It is only a matter of time.
A lane, pick up appointments and delivery appointments must be designed within the hours of service regulations. It must be priced to bring in a certain amount of revenue per day, regardless of the miles. It should not be priced as a one day run, if, after considering the hours of service, terrain, loading and unloading time, congestion, road construction, weather and other factors it takes more than a day perform. This should be priced as a two day run. Driver's pay and owner operator's contractual rate must be sufficient to provide them with a good living within whatever miles the hours of service regulations allow. Rates must be sufficient to pay these folks and provide a reasonable profit to the carriers.
In this business, by the time you realize you're in trouble, it's too late to save yourself. Unless you're running scared all the time, you're gone. -Bill Gates
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