Rep Cmte Small Business

Contact: DJ Jordan, Joel Hannahs 202-225-5821

Committee Hears Concerns of Small Businesses Regarding Possible Flaws in the Federal Trucking Safety Program

Washington, July 11, 2012 -

The House Small Business Committee, led by Chairman Sam Graves (R-MO), today held a hearing to examine the Federal Motor Carrier Safety Administration’s (FMCSA) Compliance, Safety, Accountability (CSA) program and its effects on small businesses. The hearing was titled, Is FMCSA’s CSA Program Driving Small Businesses Off the Road?

“Hearing directly from small business owners like we did today is always a real benefit,” said Chairman Graves. “Most trucking businesses are small fleets of fewer than 20 trucks. The Federal Motor Carrier Safety Administration has an important safety function, but the agency has failed to acknowledge and address serious problems with the new system that publicly identifies carriers as unsafe. Small trucking companies and independent analysts have raised legitimate concerns that the flawed system results in carriers being incorrectly designated as unsafe, which may jeopardize a small trucking firm’s future by increasing insurance rates or causing it to lose business.  We want this program to accurately identify unsafe carriers, and treat small firms fairly.”

The CSA is the federal government’s primary tool to improve commercial motor vehicle safety. Since the program's start in 2010, a number of small businesses in the highway commercial freight industry have questioned the overall accuracy of the government safety enforcement program and expressed concerns about its negative impact on small businesses. Some small trucking businesses insist that possible flaws in the program’s methodology may inaccurately identify motor carriers as unsafe, causing adverse consequences such as lost business and increased insurance rates. The Committee heard directly from small business owners, and expert testimony on the program.

Materials for the hearing are posted on the House Small Business Committee’s website

Notable witness quotes:

Daniel Miranda, an owner-operator truck driver and small business owner, Sacramento, California, said, “Once a small carrier gets into the system, the only way they stay relevant is by receiving only 100-percent clean inspections, but this is not a real-world scenario… As a small carrier, and I have seen this first-hand, just a few minor violations can send a score sky rocketing, putting the carrier nearly out of business as it becomes evident no one will employ your services because the system shows you are a risk, even though you operate safely.”

Jeffrey G. Tucker, Chief Executive Officer, Tucker Company Worldwide, Inc., said, “The BASICs are internal FMCSA tools with the express design and purpose to help FMCSA decide where and how it would spend most of its limited time, and resources. No combination of BASICs—even considering all seven BASICs—give even the FMCSA a clear-cut overall carrier safety assessment. BASICs were never intended, nor designed to be used by private industry for carrier selection… Statistical ratios, with ‘alert’ symbols, and other overly descriptive internal law enforcement language is not needed or wanted, nor does it provide business with anything positive. Quite the contrary, they only add gasoline to a bonfire already stoked by accident lawyers.”

Anthony P. Gallo, CFA, Wells Fargo Securities, LLC., said, “Small carriers are likely to frequent a fewer number of states than larger carriers, thereby increasing their exposure to the vagaries of any one state. Secondly, according to the FMCSA, only one-third of all inspections result in no violation being assigned. Small carriers appear to be inspected at greater than twice the frequency of large carriers. This has implications for productivity loss. Further, because two out of every three inspections typically result in a violation, the process can create a vicious cycle for the carrier. A threshold breach prompts more inspections, and two out of three inspections find violations, and so forth.”