"How are you going to defend those suits?" he asked. "That's punitive damages. It's big dollars," he said, highlighting a potential negative consequence for insurers.

Referring to a new set of safety measures known as safety fitness determinations, or SFDs, which will be assigned under CSA, Joe Hutelmyer, president of AmWINS Transportation Underwriters in Burlington, N.C., expressed a similar concern.

"How would you like to defend an insured that the federal government says is 'unfit,'" he asked, referring to the lowest of the three SFDs, which are "continue to operate," "marginal" or "unfit."

"Almost in our upfront underwriting, we're going to have to stipulate that our trucking clients maintain a rating of 'continue to operate' or 'marginal'–and if the rating is 'unfit,' then we're going to have to be able to get off," Mr. Hutelmyer said.

While FMCSA did not respond to an NU query before press time about whether the operations of "unfit" motor carriers would be immediately suspended, Mr. Hutelmyer and other insurance experts believe that they will still be allowed to operate in advance of a complete evaluation by authorities.

"Probably every time they pass a weigh station, they'll be inspected," Mr. Hutelmyer said, raising concerns from shippers that their goods may be sitting out in inspection stations rather than being delivered. "We're seeing shippers already taking a proactive approach and requiring that anybody hauling for them maintain 'continue to operate' or 'marginal' ratings," he noted.

The two men and other trucking insurance specialists were quick to point out that in spite of these concerns, on balance they believe the implications of CSA are overwhelmingly positive for insurers, motor carriers and the general public. (For more details of how CSA will work, see the related article on page 14 and the brief bulleted outline contained in this article below.)

"We won't know until we actually get our hands on the data," [but] there's a general feeling [among] insurance carriers that things are going to get better as a result of CSA," according to Deane Sager, trucking industry specialist for Northland Insurance in St. Paul, Minn. "Even the American Trucking Association backs CSA. I have yet to talk to anybody who sees the information CSA provides as a bad thing."

One of the FMCSA's stated goals is to achieve a greater reduction in large truck and bus crashes, noted Mr. Sager. "I think everybody agrees the overall effect is going to be positive for the trucking industry," he said.

SAFER ROADS AHEAD

Among the positive aspects of CSA that experts highlighted for NU are:

o Greater focus on driver behavior in a new Driver Safety Measurement System, or DSMS. The DSMS and a CSMS, or Carrier Safety Measurement system, will replace FMCSA's current system, known as SafeStat, which evaluates carriers only.

o More frequent scoring of driver and motor carriers using a system of six Behavior Analysis and Safety Improvement Categories, or BASICs, and a crash indicator, based on reportable accidents.

Scores on the BASICs, such as "driver fitness" and "fatigued driving," are updated monthly, and for motor carriers, performance measures will be "normalized"–in other words, they will be evaluated against peer companies through percentile rankings. Peers will be determined based on factors such as the number of power units and miles driven.

o A higher level of contact from enforcers through early interventions such as warning letters and off-site interventions, as well as targeted on-site interventions focused on specific safety issues, instead of full-blown compliance audits.

"Before CSA, a motor carrier's interaction with the DOT was pretty negligible," Mr. Sager said–noting, for example, that involvement in a fatal accident would flag a trucking company for a full compliance review.

Now with the same amount of people, the DOT–based on [SMS] scores–will be able to send out a letter instead of performing a full three-to-four-day compliance review. The letter will tell the motor carrier what areas it is deficient in and will require the carrier to respond to a plan to correct the deficiency, he said.

"So where a DOT officer could see 1- or 2 percent of motor carriers in a state in a given year, their touches now will be multiple-times higher," Mr. Sager said.

Bob Hart, risk control specialist for Northand, explained that under the current SafeStat system, only data tracking out-of-service violations and moving violations from roadside inspections was used and organized into four broad categories or Safety Evaluation Areas–accident, driver, vehicle and safety management.

In contrast, CSA's SMS will emphasize on-road performance by using all safety-based inspection violations to calculate BASICs, and there will be a more direct link between the ratings and interventions.

Before CSA, a DOT officer might perform a roadside inspection for trucks whose carriers had SafeStat scores in the 75-to-100 range, Mr. Ruke said. "But the officer had to have a reason to put the DOT number into the system" to see the score–for example, if a truck was going too fast or its loads weren't properly secured.

That inspection could turn up areas that need to be improved, or the DOT officer could even put a truck out of service until the unsafe condition was corrected. Some conditions also generated fines, but none of this was a factor in the FMCSA rating of a trucking company, he said.

The only time a trucking company got a rating that under the old system was either "satisfactory," "unsatisfactory," or "conditional" was when an FMCSA officer knocked on a carrier's door to perform an on-site, multiday compliance review, so the two were disconnected, he explained.

"The FMCSA recognized that the old system was a reactive system. They really didn't pay attention to a motor carrier until they had gotten into trouble and had created crashes or instances that they had to investigate," he said. "The new system will be more proactive and have early intervention."

Northland experts speaking during a webinar earlier this year said that FMCSA will respond initially to carriers that have one or more deficient BASICs with warning letters and targeted roadside inspections.

Intermediate levels of intervention–such as off-site investigations (allowing motor carriers to send documentation) and targeted on-site investigations will be used when deficiencies show up in two or fewer BASICs, while full-blown audits are reserved for those with continually deficient BASICs, worsening multiple BASICs and fatal crashes or written complaints, they added.

Through this process, the FMCSA expects to perform seven-to-10 times more interventions overall, they said.

Another facet of CSA that should mean safer highways is the "normalization" or percentile ranking process, which works like grading curves used in schools.

"You're going to be compared against your peers, and when the bad ones either get better or go out of business, then you've got to get better to stay above the numbers," observed Mr. Ruke. "It's a self-fulfilling prophecy."

THE ROLLOUT BEGINS

Mr. Hart said actual scores started to be released in most states at the beginning of August, allowing motor carriers a first look at scores relative to peers. Initial warning letters won't be going out until December.

"Trucking companies should make every effort to find out where they stand," he said, noting that they should also take advantage of the scoring preview to identify if any data used to develop scores is inaccurate, such as an accident or a violation charged for somebody who never worked for the company. (See pages 14 and 19 for more on exactly what data motor carriers and third parties can access under CSA.)

"Based on communication with some of our customers, that has happened," he said. Mr. Sager explained that a truck motor carrier may be pulling a trailer with a different name on the side, which is mistakenly recorded by a police officer on a report at an accident scene.

Robert Moseley, a transportation attorney with Smith Moore Leatherwood in Greenville, S.C., highlighted existing flaws in roadside inspection data under SafeStat and expressed concerns that problems could persist as CSA moves forward. "The data is still the data. It is just being organized and treated differently," he said, suggesting that an existing system to handle discrepancies–a program known as Data Q–is ineffective.

"The way it should work is you should have the ability to appeal those decisions–this is not my truck, not my driver, whatever. But the problem is that you're giving an appeal to the same guys that gave you the ticket," he said.

The Northland specialists reported, however, that under CSA 2010, there's a process that makes it easy to question data issues, and they already have seen it work well for customers across the country.

As the rollout moves ahead, and as FMCSA starts using all roadside inspection data for motor carrier evaluations, experts also differ on the question of whether firms that were rated "satisfactory" under SafeStat will see their ratings move to "marginal" or "unfit" under CSA?

"I don't think anybody knows," said John Schrunck Sr., president of Professional Safety Consulting in Lincoln, Neb., a firm that performs motor carrier risk evaluations for firms themselves and for insurers.

"Nobody, including FMCSA, felt really good about the reliability of information [under SafeStat], and once they had it, and finally got out to a very small percentage of motor carriers to look at those operations, so much time has passed," he said.

He added that "the complexity of the entire program made it kind of a dinosaur to work with," contrasting that with the new system, which he suspects will feature the automated production of warning letters and more cursory safety audits performed in DOT offices with information at hand rather than traveling to motor carrier locations.

"If I were an insurance carrier today, I would watch it, I would learn about it, but I would not cancel a bunch of insureds because low and behold they got a warning letter or something else," he said.

"We've seen motor carriers when we went in after the DOT audit and we wondered why they passed," he reasoned, suggesting there was some subjectivity in the on-site audit process in the past.

"We have seen some very insurable operations that have gotten a bad rap, and conversely, some with great statistics that were an accident waiting to happen and probably already had," Mr. Schrunk said.

Mr. Moseley believes "CSA formulas are designed so that more motor carriers fail."

"From my practicing standpoint, we're going to see more in the nature of appeals from FMCSA decisions, ratings and inspections. The enforcement side is going to heat up," he predicted.

"I certainly don't disagree with the FMCSA's desire to continually do better, but our safety statistics over the last several years are really as good as they've ever been. So we were heading in that direction before CSA came about," he said, echoing an observation made by every transportation expert interviewed for this article, as well as a recent report from the DOT itself. (See related article, http://bit.ly/aSQcN3.)

At Northland, Mr. Sager and Mr. Hart highlighted awareness of CSA as a factor that will improve recent favorable trends.

"The old system, SafeStat, was not in the forefront of a motor carrier's mind," Mr. Sager said. "You didn't think about it all the time because it didn't change very often and it wasn't brought up very often."

With CSA, however, "the whole debate is front and center, and literally in the minds now of everyone," he said, referring to the webinar and seminars presented by insurers and by all 50 state trucking associations.

Mr. Hart reported that CSA is one of the first topics customers bring up when he visits. "I think just that by itself, more people taking this more seriously will begin to reduce accidents," he said.