New FMCSA SFD Regulations

Sam. Hi, welcome to today's webinar on the FMCSA's proposed safety fitness determination regulations that were just put out on January 21st. We've just entered the 60 day comment period and we're gonna see some of the fun ins and outs of what's going on with that. But first let me introduce myself to you. For those who don't know me, I am Sam Tucker. I'm the CEO of Carrier Risk Solutions Incorporated, based in Suwannee, Georgia. We're a full service risk management firm specializing in the transportation logistics industry. Originally I'm Georgia native but I'm here at a Yankee. My wife is from Connecticut, originally attended Georgia Southern University, took two degrees in business economics and then finance and risk management. 13 years in insurance underwriting. So I had quite an interesting career to say the least in terms of, you know, the things I've seen. Of those 13 years, about 11 of them have been in underwriting and transportation risks, especially big trucks, long haul trucking, those kind of fun things, some public auto garage and of course all the kinds of auto related wheels business throughout the years. You can see here my wife and my two lovely kids and our little dog Barkley too. Here's a picture of me when I was younger. I had a lot more hair then and I was enjoying my professional wrestling career. Actually that really wasn't me. But the true story is a lot less fun than that. I actually spent two and a half years at Safeco Insurance doing personal lines underwriting, then worked for National Interstate, Berkshire Hathaway, Homestate companies and then most recently for the last five years or so, Travelers Insurance underwriting in the marine business, mostly cargo and transportation logistics business. I was actually before I left, the largest provider or underwriter of cargo and transportation insurance in the country. So that was kind of fun too. Again, you see, I'm a huge insurance education junkie. Huge education junkie entirely. You can see all my different affiliations there as well as the 10 different insurance related designations the whole too. So been a busy boy throughout my 13 years in the industry. But again too I'm just a huge geek so I enjoy this tremendously. I like big trucks and I cannot lie, so spare you the remainder of my singing today, but I do, I absolutely love big trucks. This is my passion and so I love being able to talk with folks about it and share things found out throughout the years and always just want to do everything I can to help out and help expand everybody else's knowledge base. So that's what we're doing here today and I'm glad you joined us. That's just tremendous. I think you're all rock stars. Back In October of 2015, I actually founded Carrier Risk Solutions and that was a startup again, transportation related risk management consulting firm. Do a lot of different things, do all kinds of different safety related services, risk management related services. We don't actually sell insurance, but we do provide a lot of good information and education for the folks who do business with us. Apart from that too, we also have an online community. It's called My SafetyManager. It can be found at mysafetymanager.com when you went and signed up for this webinar, you found mysafetymanager.com with the webinar address. That's actually part of our overall community which I host and lead. And as of this day, we've launched about two weeks ago, we're already up to like 136 members. So really stoked about that. Had tremendous success so far. If you have any of your clients or if you want to join the community, it's $19 a month. You have a webinar access like this every month at least. We're going to probably try to do one every two weeks or so. Additional to that, there's all kinds of other cool stuff on there. I encourage you to please go check it out at www.mysafetymanager.com. apart from everything else too, you get a free hour of consulting with me. So what you're here for today, let's talk about FMCSA's proposed safety fitness Determination regulations. So that's a definite mouthful to say the least. Long time coming on this particular one. I know everything's been stalled out and different things have been occurring. You know, we had the FAST act passed in December. That was a big thing. I think after they got that off the regulatory plate, the FMCSA was, you know, ready to move on and press on. And I know that newly appointed Commissioner Darling, he's trying to get out there and press his agenda and press the Obama administration's agenda as far as they can. So we'll see how it continues to play out as time goes on. Again, this is the proposed safety and fitness determinant regulations. These aren't final yet. What we've done is we've analyzed the 267 or so page document that the FMCSA put out as the proposed regulations and we try to bring that to you today to talk about and also to give you a little more ammunition too. To actually physically go back and comment during their 60 day period. So without further ado, let's chat about it a little bit. Okay. Again, like we said, 121, 2016, just last week or two weeks ago, sorry, the notice of proposed rulemaking was published in the Federal Register. That started a period of 60 days where the general stakeholders in the industry, other stakeholders or anybody else can go in there and do a comment about how they feel about the new regulations and the proposal that the FMCSA has made. So I wholeheartedly encourage you to do. I'm drafting my comments as we speak, going through everything and hopefully this webinar today will help you prepare some more thoughts behind everything and help you be able to provide more genuine comments to those folks. Just chatting a little bit about the legal basis for these changes. A lot of people say, well, are these laws, what's going on? It's just really administrative law for the federal government. I'm not going to bore you to death with this, this isn't crazy or anything, but the Motor carry Act of 1984 is where this all came. Secretary of Transportation essentially was given the ability to determine whether an owner operator is fit to operate a commercial motor vehicle and to maintain by regulation of procedure for determining safety and fitness of an owner operator. So I promise I'm not going to read all the slides to you. This is just a very important one. Just kind of sets the stage for how this all came about. So with part of that rulemaking comes along, the further part of that also gave the Secretary the administrative broad powers passed down to the actual gave the Secretary the broad powers to start with. And then in turn the Secretary passed on to the head of fmcsa. So the authority is now on the FMCSA administrators web or hands. And that has been like that for quite some time now. So these are regulations. It goes through the administrative law process. It's not involved with Congress. If any lawsuits are proposed to the, to this, it all have to go through administrative courts. And that's gonna be a little bit different than anything else. The other cool thing too, or the most interesting about administrative courts is historically a lot of folks who have brought issues or had different things come up, everybody's on the administrative court circuit has been really reluctant to actually change regulations that have been put out by what the federal government considers to be experts in the field. So the technical experts here, the FMCSA in the government's eyes, or generally speaking, that's the law to the administrative law folks. So when you talk about judicial circuitry and how that will work out. I'm sure there's going to be lawsuits to this. I'm sure different carrier groups are going to be involved in saying, oh, this isn't going to work, or this isn't going to work, or the state. I can't even see some state groups jumping in on the bandwagon too. Or even possibly owner operators or the oida. I know they continue to lobby for different things. So this is just a brand new thing. So a lot of folks are still trying to digest it, understand what it is to start with. But I've heard from different folks, a lot of resources that I know personally, they've actually said that if things go according to plan, this could actually be launched out, finalized in the next probably six to seven months. So realistically, CSA 2010 could become CSA 2016. It's going to have to stay tuned to see how that turns out, but we'll keep monitoring for it and let you know. To start with, let's chat about what's wrong with the old Safety Fitness Determination. What's going on with that? Why are the needs for these changes? Obviously, crash preventability is a big one. Crash preventability has never been taken into consideration when you're looking at the Safety Fitness determination on a grand scale, the actual preventability of the crash versus the actual crash involvement. So when the CSA or the FMCSA goes in and does an on site compliance review, currently they will look at crash involvement, but they won't necessarily assign preventability or non preventability to those losses or to those accidents. So that's actually a very big part of heated debate on it. Non uniform enforcement between the states. There's huge state disparities between how each individual states and how each individual counties within the states actually enforce the law. So it's actually interesting to see just a couple stats around that around. For the unsafe driving basic score, 4.5% of all CSA points came from three counties across the country. Those are two in Illinois and Indiana and then one in the port of Baltimore. That's like 45 times the expected amount of unsafe driving CSA points for those for a general location. So that's just crazy. Kind of defer to that point too. If you look at the hours of service, it gets a little bit different. 9.5% of all CSA points on the hours of service basic come from 10 counties across the country. 10 counties. That's 29 times the expected amount, which is still just an astronomical number. It doesn't get much Better. If you look at vehicle maintenance, 11.7% of all CSA points come from just two counties in the country that's just wild, and that's El Paso, Texas, and Webb County, Texas, which where the Bridge to America is. So a good idea just kind of to check the light to speed ratio. If you want to see what, you know, the violation records look like, the safety records look like for different states on enforcement, check the amount of speeding ratio or speeding violations given to the amount of light violations given. You kind of get a better idea from that perspective as to, you know, which states are focusing more on things that don't necessarily matter from a safety standpoint versus those that would or, you know, we would consider would. So, like for instance, Texas has gives on average one speeding violation for every 49 lighting violations. So that's a little bit different. A little bit different. There are CSA inspection quotas. Every state agency who takes part in the FMCSA system, they have quotas that they have to meet every year. That's a rumor I've heard. I can't substantiate that. But my understanding is there is an actual kind of quota that these enforcement officers have to abide by. So it's interesting to see how that turns out. And then, you know, in other words, too, some jurisdictions just won't give clean inspections. You know, they just see it as their job to get out there and actually physically enforce the laws. And if they're not finding something that's wrong with that rig or that trailer, then they're not doing their job. So we found that there are just some folks who just simply don't do clean inspections. A lot of that information, the statistical information, came from Steve Bryant at Visualo. He's really incredible guy. I don't know if anybody knows him, but if you don't reach out to him, he's just incredible to learn from and understand. The safety event groups are flawed. Currently there are 29 safety event groups out there. So it's just wild. Of those 29, that contains 245,000 different carriers. And so if you look just based on the number of inspections per the group, that's how they're all grouped together. The real problem is that even one extra inspection or one less inspection can shift you into one group or another. So the score can spike or decrease based on just nothing more than just receiving one more inspection, be it clean or be it having one or more violations. So that's just a little crazy. A lot of folks, and that's something that we Definitely see was wrong with the old safety fitness determination regulations as well. Less than 100,000 carriers actually have a CSA score. Generally, on average, there's less than one inspection per truck per year under the CSA system. So not a lot of carriers are actually getting only about 20%. Not a lot of carriers are actually getting inspected under the CSA inspection system. So you have to look at it and say, okay, well, how effective is this really taking care of everything, folks? Actually being able to see the actual safety of the entire population of the transportation community. And I think arguably they're not. So those are a lot of things that are precipitated these changes. And that's a lot of the reasons what we're seeing these days too. A good kind of, you know, they just actually added 81 new violations to the CSA system as well just towards the end of last year. So it's only getting harder, you know, in terms of actually being able to physically comply with the regulations that are being put out there. It's only getting harder. So as time goes on, it's. It's just more and more important to actually go out there and try to figure out what is being taken care of, what's not being taken care of. Inspect your units, take care of your drivers, make sure everything's good to go, and make sure they actually understand what they're going to be inspected upon. Part of the federal regulations are to ensure that every transportation company actually physically trains their drivers and not just says, hey, here's a copy of your inspection regs and this is what's going to happen, or here's a copy of the regulations, go learn them and then sign this document. There's an actual code of federal regulations that says you actually have to physically train your drivers. So that's part of the inspection process, investigation process as well. And it's interesting to see one quick tip too. Utilize prepass system across the country, especially if you have an issue of vehicle maintenance inspections. Definitely utilize the prepass system if at all possible. The more times you can avoid ducking in and getting the potential of having the inspections done, you know, the better. And I know that's not perfect in every case, but again, too, it's, you know, kind of law of large numbers in a lot of situations. There's over 525,000 active carriers out there these days. In 2014 alone, only 6,000 motor carriers were given a new safety fitness determination by the FMCSA. Of those 6,000, 2,700 were conditionals. So take a look at everything and looking at the general sphere of the transportation industry, 6000 or even 2700 don't really represent the entire 525,000 active carriers that are out there today. So what you have to look at is say, okay, well, of those 6,000 motor carriers out there who actually did receive it, you know, how representative of that is a sample is? It makes sense. Does it not make sense? And even so far, the 2700 that were deemed conditional by the FMCSA. Two, it's like, how representative is that? And I think that that's another huge gripe that a lot of folks with the current safety fitness determination system and one of the main reasons that the FMCSA wants to expand it and wants to change it under the new regulations, you can see on the screen, new regulations will allow for 75,000 motor carriers to be reviewed every month. So it's not even an annual basis. You know, the old system physically had to have boots on the ground. You had to have an on site comprehensive investigation completed to be able to get a safety fitness determination by the fmcsa. Now it's going to be a little bit different. We'll get into that a little bit later too. But looking at it too, again, it's just a snapshot of the carrier safety record at that time. So when you have the investigation, that's great. But you know, that didn't really speak to how good that safety operation or how good the operation is, how well the operation is doing. Now from a safety perspective, even if it was two or three months ago, lots changed in two or three months. And even if it was a year ago and some of that outdated information may or may not really represent their current state of safe operation. So I think that's another large, you know, kind of tick mark that the FMCSA was looking to address when they came out with any regulations. All right, so currently, you know, we have satisfactory conditional and unsatisfactory safety fitness determination ratings. Really, you know, at the end of the day, this is not very easy to understand. Okay, so what's a conditional versus unsatisfactory? What's satisfactory versus conditional? How does that really work out? So what they've done is they really kind kind of scrapped that entire thought process and said, you're only going to have one safety fitness determination, one sft, it's going to be unfit. So it's going to be unfit carriers and everybody else. And that's purposely done to actually try to eliminate confusion amongst shippers, amongst household goods consumers, folks who are trying to Hire household good movers, even passenger carriers, too, trying to give people a good understanding of what unfit means versus what's not unfit. So you can kind of get that situation thought of that way. Along the same token, too, if you're found to be unfit, you know, it's a little bit different. Now. If you're found to be unfit, carriers are not going to be allowed to operate in interstate commerce or transportation that affects interstate commerce. So we're going to talk about that a little bit more later and dive into that a little bit. But that's just a little bit more teeth, I guess, is a way to put it, than it was previously. Under the current system, if you have a conditional rating or satisfactory rating, it really has no impact. From a regulatory perspective, you kind of pass by, you know, if you get a conditional, it's a kind of slap on the wrist from a regular, from a regulatory standpoint, from an operational standpoint, it's a little bit different. I think everybody can understand that too, and we've seen a lot of that when I was on the insurance side of the House as well. Obviously, from an operational perspective, conditional can have dire consequences. And it's what I like to call the regulatory purgatory as well. And we'll talk about that. That means essentially, regulatory purgatories. Once you get that conditional rating, it's impossible, almost impossible, to get back to a satisfactory rating. A lot of folks go from conditional and try to get the conditional move to just simply unrate it, which is good and that's okay. But at the same time, too, if you're a conditional carrier or you have a conditional sfd, from a regulatory standpoint, it's a slap on the wrist. From an operational standpoint, it's a lot different. A lot of folks look at you differently. Insurance carriers look at you differently. Shippers look at you differently. Brokers look at you differently for multiple reasons. And so conditional is kind of the new unsatisfactory, a lot of the ways. Unsatisfactory, those obviously don't sell the row because they're not typically operating much anymore. But the conditional, that's like the new unsatisfactory. So you have satisfactory and you have to the conditionals, which in a lot of ways are the new unsatisfactory. And essentially, if you look at your ISSD scores for when you're pulling in the way stations or basic scores, if they start running hot, you have more inspections, and those inspections lead to potentially higher CSA basic numbers. And then you get to the point where the FMCSA they don't want to just let you continue going on and on thinking that nothing's going to happen. So they'll come in, they'll do an audit and you'll probably receive a conditional rating. At that point, you know, your customers start dropping, your brokers start avoiding the carriers like the plague. Insurers take either high rate action, so they start getting a lot more money for the risk that they face or they perceive that they face, or they'll just cancel the policy entirely, forcing the motor carrier to go to a different, more higher priced insurance carrier. Your costs escalate from that point. Revenue decreases, cause a lot of customers are leaving. You can't get the loads that the brokers want to give you. Your competitors are trying to improve out there, generally speaking, and with that the carriers can improve. But the problem is again too is that that whole re rating process, the administrative process behind that is very, very slow. Now the FMCSA under the new regulatory scheme they've come up with, they say that that process is going to be more streamlined in the future. But again, it's only time will tell, right? So I mean, as it is these days, I mean, if you receive a conditional rating, that's almost a death. So let's talk about how the regulatory scope has increased a little bit too. So previously you could only get a sfd, like we said a few minutes ago, if they actually have a physical on site comprehensive investigation of the motor carrier and if the motor carrier gets a satisfactory conditional or whatever the case is, that's the only way it was happening. And that's why there was only 6,000 granted last year or 2014 rather. So if you look at that and turn around and look at the, under the new system, what they're trying to do is again try and go from that 6,000 they hit in 2014 and trying to bump that up to 75,000amonth, moving it from an annual basis to a monthly basis, that's just a crazy thing to begin with. And being able to use the systems and information that they have currently and taking that into consideration too, that's one of the biggest things. Roadside inspections. The introduction of roadside inspections to the whole process makes it incredibly more interesting. This is something that the other parts of the federal government and other safety organizations have been begging for for at least the last 10 years. And so it's been interest and see how it all turns out. But I mean they finally said, okay, we, I think we have enough information to be able to physically use the roadside inspections. As a viable means of determining safe, safe operations. So in addition to the roadside inspections, you'll still have off site investigations, the on site focused investigations, which are just as they say, they focus on one area of compliance versus multiple areas of compliance and then you still have the onsite comprehensive investigations too. So those, you know, four different types of, or really just two different types, you know, previously had just, you could just fail or you just get a safety fitness determination if you actually had an on site investigation. And now it's quite different to say the least. And it's going to be interesting to see how it all turns out and so how you become unfit. You fail two or more basic categories and that can either be straight up from roadside everything but alcohol or the controlled substance and alcohol basics and crash basics, those are being admitted, those are only going to be taken into consideration under actual investigations. So if you fail any of the five other basic categories on a roadside inspection, and we'll get into that a little bit too, or if you actually have an investigation and fail any of the two of the seven basic categories that there are, then those are the things that can lead you to failing the two basics and then being deemed, potentially being deemed unfit on the roadside deal. You actually have to have 11 violations in a basic category in order to have that potentially be to potentially fail that particular basic. So is it a little bit different than it was in the past again too no app that there are new absolute failure thresholds, whereas in the past you had safety event groups and the 29 that we talked about previously that you could be a part of those are decreasing. It's going to be a lot different now than it was previously. But they say, you know, to get any kind of statistical significance, you have to have 11 violations in that actual basic category to be able to even think about having a good representative sample of being able to understand if they're going to fail or not fail. That basic from the roadside perspective, that's up from about three or five previously. So I think that's probably a good thing. As the industry sees it, more data is required to rate the carriers from a roadside basis. And it's going to be interesting to see how it turns out. But essentially what they're going to do still is 24 months of the motor carriers data is what they're going to use. That's the proposal. The FMCSA is asking for a number of different questions to be answered or input on a specific number of questions. And that's one of them is 24 months enough? Should we use 36 months? Should it be 12 months? And trying to really get a good threshold understanding of that proven pattern non compliance, that's a mouthful for you, right? That's what the FMCSA is looking for under the roadside inspections. Is there a proven pattern of non compliance to the regulations? Does this motor carrier continuously not abide by the law? Is essentially what they're looking for. The CSA points there can be time and severity weighted and the fatality injury claim or fatality injury losses as well as losses involving hazmat with a release are going to be weighted heavier than those without. Alright, like we said a minute ago too, safety event groups are not going away. So a lot of people, you know, it's a little bit of confusion around that safety event groups are not going away. It's going from 29 down to 4, which is probably better, I guess. I mean you get a larger statistical sample. As long as those are actually relevant and that's the most important thing, it's still yet to be seen. That's another big thing that the FMCSA is wanting information on. They want to know, do the safety event groups make sense? Is that a relatively reasonable way of going about it? Now, with only four, they seek to eliminate a lot of that bounce from group to group like we were talking about before. One of the main reasons that they were actually trying to move to a different regulatory regime. So your peers will still impact you and let's find out how that is. So the new basic failure thresholds. These are failure thresholds. You know, previously we had, you know, 65 or 80% just to assign as thresholds for the FMCSA to actually be able to go out and intervene with you. So if you pop to 65, you pop to 80. That's where the FMCSA regulators really started getting interested in what you were doing. From a safety perspective. These are absolute failure thresholds. So compared to your previous 24 months of roadside inspections, compared to your past 24 months, you're competing against yourself. Now, you're not competing necessarily on a direct basis with your peers. Now those safety event group peers will still determine who the worst 4 or 1% of the carriers within that group are. But it's going to be a lot less of an impact is what the idea is. So the thresholds are right there in front of you. Unsafe driving, 96% hours of service 96%. Obviously the FMCSA feels and they can quantify. Attri has quantified that those two particular basic scores have a greater impact on safety and losses and the general safety of the public than the other ones do. Hours of service is a little bit different. Unsafe driving is the only one. I think the actuary physically said yes, this is kind of a smoking gun. It makes perfect sense because you're talking about things like moving violations and, and real driver centric type operations. Hours of service is all over the board. I think we can all certainly agree with that. Driver fitness, hazmat, vehicle maintenance, those are moved to 99%. They want to make sure you're operating. You're not one that 1% of the worst of that safety event group. So it's going to be interesting to see how those turn out. I'm not sure if those are going to be the final numbers. I think that's a potential argument point for a lot of folks and some of those lawsuits may come from that. And that's again to one of the things that the FMCSA was requesting specific guidance from the industry on. So it'll be interesting to see how it turns out. All right. Like we said a minute ago too, motor carriers are now judged against their own history. So their own 24 months of information before versus the other folks in the safety event group. So previously like it was that you could have a perfectly safe operation be in one event group and other carriers in the event group that you ran one of the 29, they could be improving, you know, for that month. And that would make your scores look worse. Even though you didn't do anything differently, you were operating just as safely as you were previously. But the problem is is that those guys for whatever reason operate a little more safely and that major scores increase. So interesting to see how that is. You'll be interested to see how it all turns out too. And to see if those numbers continue to be at that level, I guess is a way to put it. The ISSD scores still do matter. You know, the FMCSA was reluctant to, but they were forced to remove those scores, I guess it was probably two years ago from public view. And then obviously with the FAST act passed in December, the CSA scores themselves, the basic scores and thresholds were removed from view as well. It'll be interesting to see how it goes. But again too with the vehicle maintenance, with the actual being able to pull over issd, that's still a prioritization tool that the state and local governments use to be able to determine who's going to be pulled over for inspection, you know. So with the new roadside versus actual on site investigation you know, kind of question mark. The FMCSA still says that 90% of the proposed unfit SFDS will still come from investigations. So that's kind of weird. Look at it too. But it will be interesting to see how it turns out. Focused versus unfocused, off site versus on site comprehensive are still going to be there. Again, like we said before, currently only the on site comprehensive review will actually result in a safety fitness determination. This kind of opens the Pandora's box, so it'll be interesting to see how it turns out. I mean again, it's all proposed regulations. We don't know what the finals are at this point, but we'll continue to monitor it. We'll see currently too. Just looking at a couple different ways the on site inspections and how they get to the satisfactory versus conditional versus unsatisfactory. I don't know if anybody else had seen this before or was really familiar with this table, but it was interesting for me. I think I'd seen it maybe once before. But it's essentially they say there are six factors when an auditor goes in and looks at different parts of the operation pertaining the drivers or vehicles and those types of things and they take those six. They also measure the out of service rates using the SMS data and the information for the mscis. Then they review crash involvement. Again, not preventability of the crashes, but just review the crash involvement to ensure that the information they have on file is correct. Then they take a look at the operations and say, okay, from an operations standpoint, how safely are you operating? And they do that using their acute regulations and their critical regulation framework and seeing how you stack up there too. So if you take a look at the table too, you can kind of see how unsatisfactory conditional versus have those play against one another to come up with the overall safety rating as well. So if you have in this instance two or fewer conditional or two or fewer violations in that particular basic, then it will lead to a conditional. Looking at it a little further, acute violations, according to the fmcsa, those are things that must be corrected immediately regardless of how well the safety of the operation is. Apart from that, critical violations are a little less severe. Those are mostly regarding management, operational systems compliance, type issues regarding driver files, medical cards and things like that. So a little less important but still most certainly interest in how it relates to the on site investigations. As we mentioned a few minutes ago too, controlled substance and alcohol basic, the FMCSA has come out and said, you know, from a roadside standpoint there's not enough Statistical data to be trusted. It's not statistically significant. We don't have a good understanding of those data points to be able to. Does this impact safety or does this not impact safety? So they reserved the right and said, we're not going to include that in roadside inspections. Also with a crash basin. So here's something that's very, very interesting. New preventability judgment is going to be added to the FMCSA's safety fitness determination. So what that means is they're going to have an actual, what they've deemed a certified safety investigator go out there and say, okay, yes, this is a preventable crash. This is a not preventable crash, and assign the blame for the accident one way or the other. A lot of the times it's going to be interesting to see how it really turns out. Steve Bryan, I mentioned him a few minutes ago, Vigilo again. They came out with the J UST system, the just system. I guess it's probably a couple months ago, maybe back in September, which is really cool. I mean, everything I've seen is really, really neat. And what that does is actually gives them the ability to have essentially an unbiased panel of folks to be able to go out there and. Or not go out there, but they actually review the accident, all the merits, and they'll make a judgment call and they'll promulgate a certificate saying, hey, yeah, this was not preventable. And whether or not that holds real weight in the marketplace I think is still yet to be seen. I think that the fact that the FMCSA is paying attention to things like that and actually saying, hey, this is kind of cool. Maybe this is a way to do it. And I guess it's one of those things where, you know, business innovates at a greater pace than government a lot of situations. So I mean, I hope that the, you know, the new system they come up with for the preventability certification looks a lot like visual OSjust program. You know, that'll be interesting to see how it turns out. But from what I can tell, that seems like a pretty neat deal and pretty good. Pretty good opportunity to have your stuff taken look at. So, all right, so say you're determined to be unfit. Now what? How is that going to happen? So just like today, under, you know, 49 Code of Federal Regulations, Section 385, 15, you have administrative review options. So those include things like, you know, if there's a material error, if there's missing data, you can take an opportunity to have an administrative review and provide that information to the FMCSA's field directors and they can take a look at that for you. And now there's a third thing that they're throwing in there is called compliance agreements. So instead where you have the consent agreements today in terms of, you know that we're talking about the process of moving from conditional to satisfactory is going back now and say, okay, now you have a compliance agreement. And that's a lot, got a lot more teeth to it from what I have been able to see. The information is essentially similar to the consent agreements of today, but it gives more carrier specific monitoring plans that they can put in place. Those could involve anything from installing technology like ELDs earlier than other folks would plan to greater inspection frequency document submission to the FMCSA that they may not have previously had to do before and other things like that, requiring their CSA basic scores to be under a certain threshold by X amount of time and just give them the opportunity, if they're deemed unfit to comply and to physically do that. Currently there's a 90 day compliance window. So if you have a satisfactory or if you have an unsatisfactory ruling, then you have 90 days to comply and submit evidence and make sure that goes through. Now under the new regulation guidelines that's going to be cut down to 15 days. So they're getting serious about it folks. It's not playing softball with everybody anymore. This is a little bit different of a situation. All right, let's chat a little bit. Just about some numbers too that are really interesting and just kind of dives in a little bit further about exactly what they're trying to figure out and why they're, why they're doing this. So previously, you know, under the new, under the current system you have essentially if you have four alerts or if you have one alert and unsafe driving the crash or hours of service basic and then above 85% threshold and one or more other ones, then that's where the FMCSA really tries to target folks for intervention. And that could be for any number of different interventions from the warning letter to all the way to a full on site comp review. The national crash rate is 2.1 crashes for every 100 power units. So that's two crashes essentially for every 100 power units for the carriers that they've identified as having conditional safety ratings. Currently that number goes to 3.9. So it's almost double. It's going from two to four crashes for every 100 power units you have on the road. Under the new situation. This is the, this is the most fun and interesting spot too. And I'm sure you've seen my post out there about, you know, 25 carriers per month will be put out of service. Well, that's not a joke and that's not just clickbait. It's, it's actually under the new regulatory regime, their target is going to be about 3,056 carriers are going to be deemed unfit annually is what they figure that's going to be. That will be essentially two and a half times more than the folks that are currently conditional. So that 2700 number that we talked about previously, that's going to be 2.5 times more than that of those, they figure 262 of those were going to come from roadside inspections solely. So that's kind of where the additional or large part of that additional 300 carriers a year comes from the investigation side, again, here's where they're saying 90% so they're saying 2,674 of their, you know, kind of target class are going to come out of actual investigations. So it'll be interesting to see how that turns out. Again, if they're doing 6,000 in 2014, perhaps that's going to continue to be the case. And I know that probably still seeking different ways to get out there and visit with folks. I believe a lot more focus is going to be placed on the off site investigations where you're going to be able to, you know, send in information and documentation to talk about, you know, what's going on with Your operations and 120 of them are going to be combined. So you can fail one basic from a roadside and you can fail one basic from the, from an investigation review and then you're still in hot water and being deemed unfit. So 3,056 unfit carriers annually, still a very small portion of the population, entirely more than is conditional, currently less than, you know, the what you might typically think. But certainly of the 525,000 or so carriers that are actively out there operate in interstate commerce, that's still a significant amount. So it'll be interesting to see how that turns out as well. The average estimate crash rate of those 3056, 4.39. So you're essentially almost or it's a little more than double what the average crash rating would be for a carrier who would be deemed, you know, not unfit or just everybody else as we talked about previously. So 4.39. So for almost five crashes for every hundred units on the road versus just two with the standard carrier population. So we chatted a little bit earlier about the different questions that the FMCSA wants help on specifically. And here's that list. They want to know how many months of roadside inspection data should be used. That's a good one. The severity weightings, should they change those to low, medium and high was another question they want some specific guidance on from the industry. Whether they should remove English language proficiency violations. That's a little more probably germane to a lot of other places in the country. But it's another question that they had wanted some industry input on. Also, the failure standards, should those be dynamic or should they be fixed? Should it be 99% one year or one month combined with the overall safety group population or should that be a floating average of the group? So they definitely want some more information input about that as well. Should they set lower failure standards for passenger carriers or those folks hauling hazmat? So that was an interesting one to me too especially I've done a lot of insurance underwriting for passenger carriers over the past 10 or 12 years or so, 13 years. And that has been an interesting question too. I know obviously the FMCSA targets those haul in passengers a lot more than they target those hauling motor just on regular goods. But it'll be interesting to see if they choose that subset to go after in a way and target those folks more succinctly. It'll be interesting to see. I don't know. I don't know. I'm kind of on the fence about that. Another one is should they have different failure standards for different safety event groups. So that was kind of interesting to me too. I mean you have the new four different groups versus the 29 previously. But should they look at those differently? And I'm not sure. I think the jury's still out on that one. They also had some additional critical and acute violations that they wanted to talk about. And they have Those in the 276 page format on FMCSA's website that you can go out there and take a look and see what those are and they want to know if those are appropriate or should there be more or should there be less and kind of get a kind of pulse on what everybody feels about those and then an impact on the states implemented the program. They have a keen interest in understanding about how the implementation is going to go in and what all is going to happen out there and just how burdensome it's going to be for the states to jump on and participate in the interesting thing too. You know, for every regulation that they suggest passing, they have to come up with a cost benefit analysis. You know, kind of in a lot of ways it's probably a joke, but in this particular situation, it's kind of funny because they came up with a cost of $9.9 million is the number. They came up with almost $10 million to put this into effect annually. And that has to do with essentially the stickiness of drivers having to find a new job once their carrier is deemed unfit. And then that could also include the increased cost of compliance. But they said of that $10 million, they're trading that for a $240 million payoff of save time, saved energy in physically adjusting losses and things like that and try and go through the whole process. So it'll be interesting to see how it turns out. I'm not quite sold on that kind of a dividend payback, but we'll see how it turns out. The other thing, next steps, you know, 30 day comment period. Sorry, the 60 day comment period has already begun. After that, the FMCSA will have 30 complete days to reply back to all the comments that were made. So we'll see if you know, through that time period what happens. Based on the comments, they have the opportunity to go back and they'll come up with, you know, fnprm, which is essentially just a second edition of the proposed regulations. Or they could just go ahead and say, all right, we've taken your information into consideration, thank you, and we may adjust some minor things and we'll go ahead and issue a final rule. And then at that point too, once the final rule is set, the effector data set, and then it will roll on. Now get into, I mean, I could be wrong, often am. But it will be interesting to see if there are no lawsuits to this regulations. Administrative Procedure act, again, trying to get a little technical passed in 1946. I mean, it's a little old to say the least, but it's tried and true and it's been there for years. It essentially says, you know, they're not going to change it. You know, even if it's, even if they're sued, it's going to be more a matter of procedures. So whether or not, you know, the FMCSA through the process, did they give the comment period enough time to sync again, do people make enough comments? Do they reply back to the comments in time versus actual substantial? Is this appropriate? Because again, too, like I said at the start of our discussions, that they're very reluctant to go back against what they consider to be the technical experts in the field and say, no, we don't think that's the case. If you're interested or you have clients that might be interested, the FMCSA actually put out on their website new safety fitness determination calculator. So you're able to go in there and there's actually some cool information on there. You can go in there with a tutorial and actually place in the inspections that you have the inspection data that you have. And if you've had a recent compliance review, you can put that information in. You can see how you'll be judged under the new regulations. So that'll be kind of interesting to see how it turns out as well. So what are some of the implications? Let's just chat about that for a second. Potential effects of this could be a huge one in my book is reduced litigation potential for freight brokers. You know, freight brokers have a few different ways they can become liable for freight loss or damage or any other kind of liability. Obviously, with a number of different high profile cases in the last, you know, five to eight years, negligent hiring of a motor carrier is a huge exposure. So now with the FMCSA stepping up at the plate and saying, yes, we will make an actual determination, we will say this carrier is fit, or rather this carrier is unfit, or he's not unfit or they're not unfit to carry. So that should, you know, kind of reduce that litigation potential. Hopefully it's yet to be seen again, but we'll, we'll keep our eye out for it. Reduce capacity. You know, we said 3,056 carriers each year are estimated going to be deemed unfit. So that obviously just in and of itself reduces capacity off the balance. But also too, with the increased increased compliance costs that are going to come along with that too, you know, that's going to drive up the cost of compliance, is going to drive up the cost. And you know, everybody knows what freight rates are like these days. Those aren't moving to lockstep with any kind of expenses that are increasing. So it'll be very interesting to see as time goes on whether or not that actually comes into play and what impact that has as well. Will it lead to safer roads? I don't know. Again, a very large yet to be seen looking at everything out there, if perfect world, if it holds true in the statistical analysis the FMCSA did is accurate. Yeah. Then if it goes from, you know, you know, four, you know, four crashes per hundred trucks down to two or more closer than Normal then yeah, maybe that's a good thing. Maybe it's not as it's hard to say. It'll be interesting to see what the, you know, the trade offs are as the cost benefits you continue to pile up. And then again, I just want to thank you for attending today. I really appreciate you joining us again. My name is Sam Tucker. I'm the CEO of Carrier Risk Solutions Incorporated. We're a full service transportation risk management firm. We also have my SafetyManager, which is our online community. And that community consists of motor carriers, freight brokers, insurance agents, risk management professionals, safety directors from large companies and other folks who just have a keen interest in transportation safety. A low monthly fee gets you access to all kinds of really cool content webinars like this one. It's only $19 a month and if you have any interest in that, please give me a call. 855-211-5550 is the phone number or s.tuckeraryrisksolutions.com and that's all we have for today. If. Anybody would like to add anything to the chat, please do. I don't see anything here so far, but we'll go ahead and give it a couple minutes and stick around to see if anybody wants to ask any questions, has any comments or concerns, any thoughts. Again, it's a very interesting regulation update and change. It'll be very interesting to see how long it takes again too. I know that a lot of folks have come out and said, you know, we're trying to get this thing passed through the regulatory process and then continue on and have it seen through final regulation before the November elections. This is what I've heard. So it'll be interesting to see that what actually turns out or not in most situations and circles, these things can take years, you know, and I think the fact that they've been talking about it for a few years now and getting this, get this entirely done and back on, it's, it's been interesting, it's been a process so we'll have to see how it turns out. We really will. It's still a work in progress at this point. Not sure what the final determination is going to be on everything. Will it look very different from what's on there currently? I doubt it. I really do doubt it. Despite the lawsuits that I'm sure will be filed, despite any kind of other inputs that other folks may offer the FMCSA on this, it looks like they've done their homework, or at least in their eyes they've done their homework and they have the ability to go in and now actually have some teeth, especially with the roadside inspections. So it'll be interesting to see how it turns out again too. We're going to be monitoring it very, very closely and we'll let you know as time goes on. Would love to see you in the My SafetyManager community group again. That's MySafetyManager.com if you have any needs or have any clients who have any needs that we could probably help with on safety, risk management, insurance consultant type opportunities, we'd love to help out again. It's stuckerarrierrisksolutions.com www.carrierrisksolutions.com www dot mysafetymanager.com or by phone at 855-211-5550. I really appreciate you attending today. Please don't hesitate to reach out to me, chat about anything again. Like I said, I'm a huge this is my passion life. I love chatting about it. Please don't ever hesitate to reach out and chat. Hope you have a great day. Thanks for joining. Bye.