Logistics Viewpoints

A complete analysis of logistics trends, technologies, and services

A Loophole Protecting Impaired Truck Drivers is About to Close

Transportation | By •

My wife’s parents were killed by a drunk truck driver when she was just 12 years old. I’m in favor of just about any rule that makes our roads safer.  On January 6th, 2020 motor carriers will be required to begin using the Drug and Alcohol Clearinghouse to screen for drivers who are ineligible to operate a commercial motor vehicle based on failing a Department of Transportation (DOT) drug and alcohol test.

drug and alcohol test

Drivers are required to take a preemployment drug and alcohol screening test.  Drivers are then subject to random tests, which are usually given on a monthly basis.  This regulation is designed to make our roads safer.

But there has been a glaring loophole. A driver could fail a drug and alcohol test and then just mosey down the street and get a job with a different trucking firm. There was no mechanism to know that someone had failed the preemployment drug and alcohol test.

DriverReach, a Driver Recruiting Management System firm, has published a downloadable book on this topic. In the article that follows, I’ll summarize some of the main points from the book and the Federal Motor Carrier Safety Administration’s (FMCSA) website on this new regulation.

  1. The industry has been in favor of this regulation for a long time. Crashes that are judged to be the fault of a trucking firm can result in large judgements in law suits, fines, and higher insurance costs. “The trucking industry began calling on the federal government to create a central database, or clearinghouse, that catalogs the drug testing history of CMV drivers” more than 20 years ago. Finally, several pieces of legislations and a rulemaking later, the trucking industry is poised to get the regulation they have been asking for.
  2. The clearinghouse will collect not just all the instances where drivers test positive on drug or alcohol tests, but also refusals to take the test, and actual knowledge that a driver was driving impaired. The drugs tested for include marijuana, cocaine, opiates – opium and codeine derivatives, amphetamines and methamphetamines, and phencyclidine – PCP. A driver fails the alcohol test if the alcohol concentration is 0.04 or greater.
  3. Carriers will be required to query this central database as part of the hiring process. Further, on an annual basis, motor carriers will need to request a “limited query” of all their CDL drivers. “This ‘limited query’ tells the carrier if any information exists in the clearinghouse on the driver. If information exists, carriers will have 24 hours to request a ‘full query’ and review the information to determine if the driver is eligible to operate a CMV.”
  4. The law impacts an ecosystem that is bigger than just the drivers and the carriers. It affects the firms trucking companies hire to find drivers and all parties involved in drug and alcohol testing process such as medical review officers or substance abuse professionals.
  5. FMCSA, like all government agencies, is required to do an economic analysis before changing their regulations. FMCSA estimates the new rules will eliminate almost 900 crashes annually. After subtracting out the added regulatory costs, the new regulation will result in a total net benefit to society of approximately $196 million.
  6. There is a return-to-duty process. Drivers are not banned permanently from driving. The process begins with a face-to-face substance abuse evaluation conducted by a substance abuse professional that has met the required credentials mandated by the Department of Transportation. The professional makes treatment and education recommendations for the employee.  Once the employee has successfully complied with the recommendations, a follow-up face-to-face evaluation is scheduled with the same professional.  Based upon the follow-up evaluation, a written determination of the employee’s eligibility (or ineligibility) to perform the job is issued. The employee must then pass the drug tests. The trucking firm is not required to   return the employee to work.

This new rule seems obvious to me. It is shocking that it took twenty years to get this regulation on the books.

Proposed Transportation Regulations to Impact the Autonomous Vehicle Market

Automotive Industry | By •

The US National Highway Traffic Safety Administration (NHTSA) proposed new safety regulations that got very little coverage; perhaps because the proposed rule came out on December 13th just before the yearend holidays. These regulations would use a new technology – vehicle-to-vehicle (V2V) radio communications – that would allow vehicles to automatically send vehicle sensor data – the vehicle’s speed, heading, brake status and other information – to other vehicles to alert drivers to potential crash situations.

This is interesting technology that could impact the speed with which autonomous vehicles become viable. That is because the chief impediment to the viability of autonomous vehicles are fears that they are not safe enough.

There are already advanced crash avoidance technologies available that employ on-board sensor technologies – such as vehicle camera systems, RADAR, and LIDAR – to monitor a vehicles’ surroundings. That sensor data can then be used to warn the driver of impending danger so the driver can take appropriate action to avoid or mitigate a crash. Examples of the alerts include forward collision warnings, blind spot warnings, and lane change warnings. These sensors can also be used for driver assist and allow a vehicle to automatically apply braking in a potential collision scenario.

The NHTSA is proposing that Basic Safety Message data should be shared with other nearby vehicles so that other types of potential accidents can be prevented. The Basic Safety Message will use vehicle-to-vehicle technology to communicate data on the vehicle’s speed, heading, brake status and other vehicle information to surrounding vehicles and receive the same information from them. Sharing this data will help to prevent the types of accidents current technologies help prevent, but also accidents current technologies don’t address, such as a vehicle about to turn in front of yours at an intersection. The NHTSA also argues that the current technologies have limitations in terms of sensor range and inability to fully cope with sensor obstructions that vehicle-to-vehicle systems will not.

V2V Technology Will Reduce Crashes

The NHTSA calls existing technologies “vehicle resident systems,” and believes that the combination of vehicle resident systems and new “communication-based systems” are complementary because the combined data sets will add preventative capabilities. The draft argues “in the longer-term, the agency believes this fusion of V2V and vehicle-resident technologies will advance the further development of vehicle automation systems, including the potential for truly self-driving vehicles.”

Proposed regulatory agency rules must include a cost benefit analysis. The NHSTA foresees savings much, much larger than costs; 30 years out from when the mandate takes effect they are projecting $2.2 billion to $5 billion in costs ($135 to $300 per vehicle), but savings of $53 to $71 billion based on reduced costs associated with crashes.

But don’t expect a major impediment to autonomous vehicles to disappear quickly. Governmental agencies proposed rule makings progress incrementally. This first phase would require this technology only for new light-duty vehicles; clearly full benefits won’t be present until all vehicles are subject to the same regulations. Further out, the NHSTA also wants to have vehicles communicate with transportation infrastructure such as traffic lights, stop signs, and works zones to reduce congestion and improve safety. And the proposal, if not slowed by law suits (and it will be), foresees a phased implementation with a final ruling in 2019, a phased in period beginning in 2021, and all light-duty vehicles subject to the rule in 2023. If we assume that this ruling is a key piece of the puzzle needed to make autonomous vehicles a reality, most of the 2.5 million or so US truck driving jobs that a White House Artificial Intelligence report warns may be threatened by automation should be safe through at least 2025.

 

 

Autonomous Fork Lifts Make the Warehouse Safer

Logistics Technologies | By •

The viability of autonomous mobility for the industrial market has been catalyzed by the success of Kiva Solutions and iRobot.  The commercial success of autonomous mobile robotics from these companies has transformed the technology from a novelty and curiosity status to a technology to be taken seriously.  While these companies garner considerable media attention, the use of autonomous mobility remains under the media radar in automatic guided vehicles (AGVs) and forklifts.  AGV and forklift truck technology has largely undergone a transformation over the last 6 years in which many of the well-entrenched material handling companies have integrated more robust navigation systems into these mobile platforms.  Labor costs, an increased spotlight on employee safety and ergonomics, and the desire for improved operational efficiency are major drivers for this progression.

robforkMobile technology has been in use in the warehouse for many years, as forklift truck OEMs have incorporated navigational capabilities in these vehicles, but in some ways the navigation was limited.  Today many of the well-entrenched material handling companies offer products using navigation technology with a more robust form of navigations with autonomous decision-making capabilities.  This is a departure from older AGV solutions, which navigated on wires or guided tape physically affixed to the warehouse.

While wire-guided AGVs have been utilized for decades, autonomous AGVs and forklifts using laser scanning and other sensing methods are providing more flexibility without the associated cost of infrastructure changes.  Additional technology trends include the transformation from simple environmentally-aware vehicles primarily used for transportation from point A to point B, to vehicles which come bundled with much more sophisticated software design, including warehouse organization, pallet building, etc.

The next step for this market is natural feature recognition, which will be the next evolution in autonomous vehicle mobility.  The use of low cost camera technology could lead to the demise of laser-based guidance.  Laser-based systems have relied upon placing of reflective tape in key locations in the facility to enable the autonomous vehicle to determine its coordinates; camera technology will instead utilize object recognition in the facility for guidance purposes.

Often the hurdle with an emerging technology is ensuring that there is a ROI for a large capital investment.  Fully-autonomous forklifts do not require any obtrusive infrastructure around them and this makes investments in this technology more scalable – i.e. you can start small and add new equipment as needed.

Obviously, automation is frequently put in place to reduce labor costs. But the safety benefits of this technology are often overlooked. There are approximately one million forklifts in the United States alone, with around twice as many operators.  These one million forklifts are involved in 110,000 accidents per year causing 94,750 injuries, according to statistics from the Occupational Safety and Health Administration (OSHA).  In fact, one in six workplace fatalities involve forklifts in some capacity.  Though many of these accidents could be prevented through more thorough safety measures, safety is a driver for automation in the warehouse.  Many companies have started to transition away from traditional forklifts, instead adding automation to their forklifts.

Tasks such as loading and unloading forklifts, moving around inventory, etc. can cause a wide range of injuries to warehouse or factory workers. By automating these tasks with mobile robots, the factory or warehouse becomes a safer place for employees.

Scott Evans is an Analyst at the ARC Advisory Group. Scott’s focus areas include Additive Manufacturing/3D Printing, 3D Laser Scanning, Machine Vision, and Autonomous Mobile Robotics. He is also a member of ARC’s Internet of Things (IoT) team.

Guest Commentary: Suit Filed Alleging FMCSA Overreach on Publication of SMS Methodology

Guest Commentary | By •

On July 16, 2012, ASECTT (the Alliance for Safe, Efficient and Competitive Truck Transportation), four other trade associations and twelve named plaintiffs sued the FMCSA over its May 16th publication of “New Resources Available for Shippers, Brokers, and Insurers” on its website. This guidance makes clear that the FMCSA does not intend to perform its job under existing statute of determining which carriers are fit to operate on the highways and shutting down the rest. Through the publication of CSA/SMS data and this guidance, the FMCSA is harming safe small carriers who are not inspected often enough to generate a reliable score; large safe carriers who happen to operate in the five states that generate 46 percent of all speeding tickets or warnings; and shippers and brokers who are targeted by lawyers for negligent hiring and vicarious liability lawsuits despite contracting with carriers that have been authorized by the DOT to operate in interstate commerce.

The worst aspect of this is that SMS scores have no correlation to accident frequency rates for individual carriers, so all of this damage is being done without any positive impact on highway safety. There are now three studies that conclusively show the lack of correlation. On July 2, Anthony Gallo of Wells Fargo published “CSA: Another Look with Similar Conclusions”  which stated, “…, we do not believe stakeholders should rely on CSA BASIC scores as an indicator of carrier safety performance or future crash risk.” The study was based on SMS scores and accident frequency data for 4,600 carriers with a minimum of 25 trucks and 50 inspections in the last 24 months. Also in early July, James Gimpel, a professor at the University of Maryland published “Statistical Issues in the Safety Measurement and Inspection of Motor Carriers.” The study points out numerous geographic deficiencies of the methodology that penalize carriers for where they operate, not how safely they operate. The study also challenges the deficiencies of SMS with regard to large versus small carriers. Data with fewer than 20 observations are not considered to meet a sufficient level of accuracy and most studies would not even publish such sparse data, but only 5 roadside inspections in the last 24 months are deemed sufficient under FMCSA’s methodology to brand a carrier as high risk. Analyzing data for tens of thousands of carriers the study showed little or no correlation between SMS scores and accident frequency. Finally, Transplace’s Director of Engineering, Inam Iyoob, published a study that also measured data for tens of thousands of carriers and found no relationship between SMS scores and individual carrier accident frequency.

The FMCSA continues to tout its studies showing a positive correlation between SMS scores and accident frequency, but to get that result they average the accident frequency of hundreds of carriers in each of 100 different percentiles and then calculate a regression of the average values. The purpose of regression analysis is to explain variation. Averaging hundreds of carriers at each percentile eliminates most of the variation in the data.

Logically, unsafe driving and driver fatigue do impact crashes. However, the way the SMS BASICs Unsafe Driving and Fatigued Driving are captured, calculated and interpreted by FMCSA does not show any correlation to crashes. Hence, usage of SMS data for carrier selection will unduly favor some and penalize others, and thus should be avoided.

A 32-year veteran in the logistics technology, third-party logistics (3PL), and transportation industries, Tom Sanderson is CEO of Transplace, a leading provider of logistics management services and technology. Prior to joining Transplace, Mr. Sanderson held various leadership positions, including president and CEO of Clicklogistics, co-owner and president of PTCG, and he worked 8 years in the trucking industry, serving as president of J.B. Hunt Special Commodities, Inc., Vice President of Marketing for J. B. Hunt Transport, Vice President of J. B. Hunt Logistics (now Transplace), as well as marketing and IT roles at Schneider National. He has 6 years of consulting experience with Mercer Management Consulting and Andersen Consulting (now Accenture). He has an MBA from Indiana University, has been married for 30 years and has three children

Guest Commentary: Key CSA Scores May Be Poor Indicators of Carrier Safety

Guest Commentary | By •

Wells Fargo Senior Analyst Anthony Gallo published an excellent document on March 28 highlighting critical problems with CSA 2010. You can contact me or contact Anthony directly at anthony.gallo@wellsfargo.com for the full document, but I want to highlight a couple of key points. The analysis shows little or no correlation between the CSA BASIC scores for unsafe driving and fatigued driving and accidents per million miles. Everyone wants to see continued reductions in truck-related accidents. It appears, however, that the key CSA measures that would indicate a carrier should be a candidate for further scrutiny bear no relationship to the actual safety ratings of those carriers. This is one of numerous reasons why shippers should not use CSA data to create their own carrier credentialing methodologies. Here is an excerpt from the Wells Fargo publication.

FMCSA assigns a composite score in seven Behavior Analysis and Safety Improvement Categories (BASICs) along with a corresponding “limit” threshold. When a carrier breaches the threshold, corrective actions must be taken to remedy the violations. Serious or persistent violations can result in enforcement actions against either the driver or carrier. Motor carriers initially receive a “warning letter” informing them of their violations. According to several reports as many as 50,000 letters were expected to be sent in H1 2011.

 

When we dissected the underlying data in relation to the composite scores, we were somewhat surprised to see that there was little correlation between the scores and the actual number of accidents and injuries/fatalities. Specifically, we observed little correlation between poor scores in the Unsafe Drivers and Fatigued Drivers categories and the actual number of accidents or injuries/fatalities. Further, we could not find and are not aware of FMCSA data that statistically demonstrates a correlation behind these factors and accidents. Certainly, it is intuitive that “unsafe drivers” and “fatigued drivers” should be more prone to accidents. However, this does not appear to be the case. We feel this may be due, in part, to the methodology by which the categories are scored. For example, unfavorable Fatigued Drivers scores typically result from Hours of Service violations, but also include Logbook violations and errors. So while a fatigued/tired driver (assumed to be tired if outside of HOS criteria) may indeed be more likely to be involved in an accident, one with Logbook errors would perhaps not be. Thus, if an unfavorable Fatigued Driver score is in fact being driven by Logbook errors, the composite score would be less likely to correlate with accidents, in our view.

Accidents per Million Miles by Unsafe Driver Score (Source: Wells Fargo report; click to enlarge)
Accidents per Million Miles by Fatigued Driver Score (Source: Wells Fargo report; click to enlarge)

We understand the Unsafe Drivers/Driving category is meant to capture speeding, reckless driving, improper lane changes, etc. Certainly we think these behaviors should be captured and likely have some correlation with accidents. However, there are literally dozens of subcategories within the Unsafe Driving category, and a severity weight is given to each violation subcategory. This may help explain some of the disconnect between the scores and the actual number of accidents. For example, “reckless driving” and “texting while driving” both carry 10 point weights. Conversely, “failure to use a seatbelt” has a 7 weight whereas “improper lane change” and “following too close” each carry a 5 weight, although intuitively the latter two appear to be less safe activities, in our view.

The bottom line is that CSA is too new and unproven for shippers and brokers to be using the posted data to make carrier selection decisions. Shippers should avoid creating their own carrier credentialing methodologies that will open them up to challenges by trial lawyers when accidents do occur. It is the duty of the FMCSA to determine whether a carrier is fit for service. Shippers and brokers should be choosing carriers that provide good service at a competitive price and who maintain adequate insurance coverage.

Tom Sanderson is chairman, president & CEO of Transplace, a leading provider of logistics technology and transportation management services. Sanderson’s nearly 30 years of experience includes senior executive roles at Clicklogistics and PTCG, Inc. He also spent several years in the trucking industry, holding management positions at J.B. Hunt Special Commodities, Inc., J. B. Hunt Transport, J. B. Hunt Logistics (now Transplace) and Schneider National. Sanderson also has consulting experience with Mercer Management Consulting and Andersen Consulting (now Accenture). Sanderson has a master’s in business from Indiana University, has been married for 28 years and has three children.

Mining the CSA Database

Regulations | By •

The Federal Motor Carrier Safety Administration (FMSCA) initially sold CSA 2010 as a tool for carriers to drive continuous improvement in driver safety, and it specifically said that this data was not intended for brokers, shippers, law firms, or insurance underwriters. But now that the data is publicly available, it is going to be used by everyone, not just carriers. (I can’t find any evidence of a lawsuit being filed yet based on this data, but I think it is inevitable).

As I researched the transportation management systems (TMS) market, I wondered if TMS software vendors were using this data in their solutions. I imagined they could access FMSCA’s public database, do some screen scrapping, import the data into a business intelligence engine, and then present near real time analytics to companies that own and operate fleets, as well as brokers and shippers that want to do business with safe carriers.

It turns out this is not only possible, it is also being done.

McLeod Software, a provider of fleet management solutions, has a product called Loadmaster Enterprise used by for-hire truckload carriers. This product is now linked to the CSA 2010 Driver Safety Measurement System (DSMS) portal. Mark Cubine of McLeod pointed out that carrier competitiveness for the next few years will be based, to a large extent, on having a composite view of driver performance. Loadmaster can make driver safety scores instantly available to a carrier with real time alerting. It also includes task management functionality that directs drivers to turn in road inspection forms before this data appears on the portal so that the carrier has advance warning.

Mark put me in touch with Steve Bryan, the President of Vigillo, a fascinating little company (eleven employees) that has built its entire business on CSA 2010. Vigillo was founded in 2007 by executives with backgrounds in risk management, and they applied their expertise to the looming CSA regulations. Vigillo offers a cloud-based solution to carriers, and with their authorization, collects data from the CSA database and prepares a series of over 100 different scorecards and reports. Initially, the reports focused on recompiling SafeStat scores and showing how that would translate into CSA scores. Now that CSA scores are being published, the focus is on providing carriers with reports to help them improve their scores. Vigillo’s most popular report, for example, ranks drivers from worst to best in terms of safety record, with the worst drivers appearing in the “red zone.” The company charges 50 cents per driver per month for these reports.

Vigillo plans to release a product this spring to help  shippers and brokers identify and work with safe carriers. Vigillo’s perspective is that brokers and shippers don’t want all the details; they just want to know if a particular carrier is safe to work with or not. They may want to review a list of 10,000 trucking companies to see who they should continue to tender to. To accomplish this, the broker or shipper will upload 10,000 DOT numbers into the Vigillo solution. Vigillo will then generate a report of carriers listed in green (good to go) or red (think twice before working with these carriers). This will be based on the public categories and checkbox data (for example, insurance in place). Customers will also be able to customize these scores by setting their green/red line higher or lower.

Finally, I talked to a team of folks from TransCore, the operator of the largest load board in North America. TransCore has a product called CarrierWatch that also accesses CSA data and makes it available to clients on a subscription basis. While it doesn’t provide a customizable “work with/don’t work with this carrier” style index, the company has integrated CarrierWatch with some leading TMS solutions, including TMW, McLeod Software, and MercuryGate. TransCore expects its software partners to eventually provide this kind of functionality based on the CarrierWatch data.

Where the CarrierWatch solution beats the other FMCSA content available is in the area of insurance. The FMCSA data basically tells a broker or shipper that a carrier has insurance, but not how much. CarrierWatch content is based on TransCore’s personnel going into the FMCSA lists, finding a carrier’s insurance company and policy number, getting permission from the carrier to contact the insurance company, and then collecting and providing data on how much and what types of insurance the carrier has. Good carriers tend to comply because brokers are required to do a certain amount of due diligence on the carriers they hire. This data can also help carriers get business if they have a reputation for minimizing the risks associated with tenders.

My view on all this is that it does not matter how the FMSCA initially sold CSA 2010 to carriers. The data is now public and it is valuable. It should be mined and used intelligently.

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