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Supply Chain Liability

TSC adamantly opposes efforts to limit shipper and broker responsibility/liability. Safety cannot be accomplished until the entire supply chain is accountable.  In recent efforts on behalf of shippers and brokers, legislation has been introduced that would set a standard for shippers and brokers at such a low threshold that it would actually serve to reduce safety accountability. The three actions required are so easily attained that many high-risk and chameleon carriers would qualify under this set of criteria.

Shippers and brokers who seek to limit their responsibility to merely ensuring that a carrier is registered with and (if applicable) authorized to operate as a motor carrier or household goods motor carrier by FMCSA; has the minimum insurance coverage required by federal regulation; and does not have an “unsatisfactory” safety rating issued by FMCSA, in force at the time of the verification, are not using all of the tools and data at their disposal to make an informed hiring determination.  If shippers and brokers are permitted to do the bare minimum of due diligence in their hiring practices, safety will be reduced and a race to the bottom will ensue.  The entire supply chain, including shippers and brokers, must be held accountable in order to elevate safety in the industry.

None of the criteria specified reflect on the current safety performance of a carrier. If safety is removed from the hiring decision, as it would with these pathetically low standards, it would lead to low-cost, unsafe carriers being selected, exposing the public to physical and financial risk. With low insurance coverage for the carrier and liability protections for whoever made the carrier selection, damage costs will go uncovered and the taxpayer will have to pick up the costs.

As to what data should be allowed in a civil action, it is for a judge to determine what is relevant to a case. Otherwise, the proposed changes would result in families and other affected parties (local city or county) not having access to critical information, and therefore adversely impacting their access to justice.

Safety Concerns:

Safety should be the focus for the entire supply chain and effort to limit supply chain liability would take safety out of the equation for the decision making process.

§  We should be elevating standards for carrier selection, not lowering them. This was the purpose of many of the MAP-21 provisions, which included amended financial security requirements for property brokers and created new requirements for freight forwarders by setting a minimum financial security of $75,000 and extended the bond requirement to freight forwarders. The language in the house bill is a huge step backwards.

§  Minimum levels of insurance for trucks and motor coaches have not been increased in over 35 years and are woefully insufficient. Bare minimum compliance should not be accepted as a standard of safety.

o   The minimum amounts set by Congress as the absolute floor are too low. They do not provide the intended underwriting supervision and protection for the public. 

o   The low original minimum amounts have provided less coverage for truck crash related damages as inflation, and especially medical care inflation has increased.

o   Truck size, weight, and speed have also increased during this time period, which can lead directly to increased crash severity (higher kinetic energy).

§  A satisfactory rating assigned at one point in time is just the bare minimum that allows a carrier to operate. A carrier or driver that has not yet been prohibited from driving cannot be assumed to uphold safe practices. Many ratings are 10 or 15 years old. It does mean that their background or recent performance based data should be ignored during the selection process. Shippers and brokers should be looking at and considering all information available to them in determining the safety of a carrier, rather than relying on criteria that does not reflect the safety of current operations.  A review of safety should include:

o   the last two years of violations that have a high correlation to crash risk, such as unsafe driving and hours of service data;

o   crash history including the number and severity of crashes;

o   carrier out of service rates for both vehicles  and drivers;

o   credit ratings and references;

o   safety audit results;

o   company safety and fatigue management plans.