Tag Archives: FMCSA

FMCSA’s Proposed Safety Rules

In January of this year, the Federal Motor Carrier Safety Administration (FMCSA) announced a proposal to change truck fleet safety rules.

truck inspection

According to the FMCSA, the goal is to monitor a larger number of trucking fleets than it has in the past. This could have a big effect on truck fleets: Currently, the agency rates fleets as satisfactory, conditional, and unsatisfactory, and the current rules prevent unsatisfactory fleets from operating. Under the proposed safety rules, though, the FMCSA would eliminate the “conditional” rating. Any fleet that isn’t satisfactory would no longer be able to operate. This will mean that fleets in violation of safety standards would not be given a chance to make appropriate changes. (The FMCSA argues that, under the current system, it is often not able to monitor fleets rated “conditional,” and as a result, required safety changes are never made.) Furthermore, the FMCSA estimates that it would base its safety ratings on road-side inspection of 75,000 trucks per month.

Opponents of this proposal (including the American Truck Association and the Truckload Carriers Association) don’t like the changes for several reasons. First, they say, the proposed safety rule standards are arbitrary, and are the same as those under the current Safety Measurement System (which Congress said were unclear). The guidelines the FMCSA will use to determine safety are statistically flawed, they say. Additionally, removal of a “conditional” rating will mean that a fleet found unfit will be barred from operation, with no practical option to appeal or improve the unfit rating. Ultimately, opponents argue, the proposed safety rules will make it harder for fleets to be judged accurately while doing little to improve safety.

FMCSA Proposed Insurance Requirements For Trucking Companies

It’s well-known that, at the end of 2013, the Federal Motor Carrier Safety Administration increased the minimum insurance coverage requirements for freight brokers to $75,000. But it may be less widely known that the Department of Transportation has proposed increasing the insurance requirements for trucking companies as well. In a report issued in April 2014, the FMCSA suggested that, in the near future, the current minimum requirement of $750,000 could be increased to an amount much higher. (You can read the full report here.)

Volvo Truck, courtesy of Patrice Raunet Hollywood

Volvo Truck, courtesy of Patrice Raunet Hollywood

In its report, entitled Examining the Appropriateness of the Current Financial Responsibility and Security Requirements for Motor Carriers, Brokers, and Freight Forwarders – Report To Congress, the FMCSA suggested that current insurance minimums were not high enough. The previous minimums, the report says, were set during the 1980s, and the cost of damages over the past three decades has risen dramatically since then. During the same time, insurance rates have dropped a bit –meaning that an increase in the minimum insurance requirements may not bring trucking companies’ actual insurance costs to a level above what they were when the previous minimum was set. This led the authors of the report to conclude that:

”[T]he current financial responsibility minimums are inadequate to fully cover the costs of some crashes in light of increased medical costs and revised value of statistical life estimates.”

What is interesting about this conclusion, though, is that it does not appear to account for some other (possibly significant) numbers, which the report itself mentions a few pages earlier. There are 330,000 crashes per year involving trucks, but fewer than 3,300 of these crashes cause damage in excess of the current insurance minimum of $750,000. In effect, then, the FMCSA will increase its requirements for all trucking companies because fewer than one percent of accidents exceed the current minimums.

How much might the FMCSA increase the insurance requirements? It isn’t clear yet, because the agency has only begun the process of putting together a new rule. The report gives us a hint, though: it cites a study from the Pacific Institute for Research and Evaluation recommending a minimum policy limit of $10 million per crash.

We don’t know where the FMCSA will set the minimums in the future, or when they might do it. But we’ll have future posts on this issue, so make sure to check back.