Profitable Trucking By Johnny Schrunk

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THE Basic Foundation of a Successful Trucking Company...Brief Overview of the Essential Elements a Trucking Entrepreneur Must Be Knowledgeable of...and a little more!

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Profitable Trucking By Johnny Schrunk

  1. 1. By Johnny Schrunk “ The Nations #1 Trucking Business Coach” All Rights Reserved. ©2009
  2. 2. The Essential Elements of Safety & Security Regulatory Insurability Risk Control 2009
  3. 3. Regulations..errrr <ul><li>FMCSR </li></ul><ul><li>OSHA Recordkeeping </li></ul>
  4. 4. Federal Motor Carrier Safety Regulations <ul><li>Driver Qualification & Selection </li></ul><ul><li>Drug & Alcohol Testing </li></ul><ul><li>Hours of Service </li></ul><ul><li>Regulatory Updates </li></ul><ul><li>Compliance </li></ul>
  5. 5. The Qualification Process <ul><li>Requirements </li></ul><ul><li>Application </li></ul><ul><li>Background Checks </li></ul><ul><ul><li>Employment History </li></ul></ul><ul><ul><li>Drug/Alcohol History </li></ul></ul><ul><li>Motor Vehicle Records </li></ul><ul><li>Drug Test & Physical Exam </li></ul><ul><li>Testing & Training </li></ul>
  6. 6. Minimum Requirements for Driver Qualifications <ul><li>Written form </li></ul><ul><ul><li>Minimum age </li></ul></ul><ul><ul><li>Minimum experience </li></ul></ul><ul><ul><li>MVR standards </li></ul></ul><ul><li>Meet or exceed DOT requirements </li></ul><ul><li>Meet or exceed insurance company standards </li></ul><ul><li>Followed without exception </li></ul>
  7. 7. The Application <ul><li>Completed in its entirety </li></ul><ul><li>Must list: </li></ul><ul><ul><li>All employers in past 3 years </li></ul></ul><ul><ul><li>All commercial driving experience for the 7 years preceding this 3-year period </li></ul></ul><ul><ul><li>All accidents & violations in past 3 years </li></ul></ul><ul><ul><li>All other required information </li></ul></ul>
  8. 8. Background Checks: Employment History <ul><li>Investigation must be made within 30 days of the date employment begins </li></ul><ul><li>Written record </li></ul><ul><ul><li>Past employer’s name & address </li></ul></ul><ul><ul><li>Date of contact </li></ul></ul><ul><ul><li>Comments made regarding the driver </li></ul></ul>
  9. 9. <ul><li>Previous employers for prior 2 years </li></ul><ul><li>Driver’s written authorization </li></ul><ul><li>Inquire about: </li></ul><ul><ul><li>Alcohol test results of 0.04 alcohol concentration or greater </li></ul></ul><ul><ul><li>Positive drug test results </li></ul></ul><ul><ul><li>Refusals to test </li></ul></ul><ul><ul><li>Positive pre-employment tests </li></ul></ul>Background Checks: Drug/Alcohol History
  10. 10. Motor Vehicle Records <ul><li>Pre-hire </li></ul><ul><ul><li>Obtained within 30 days of qualification </li></ul></ul><ul><ul><li>Kept while driver is employed </li></ul></ul><ul><li>Annual </li></ul><ul><ul><li>Annual reviews kept for 3 years </li></ul></ul>
  11. 11. 10 Basic Rules of Employee Recruiting <ul><li>If you DO NOT need new employees, DO NOT recruit & accept applications. </li></ul><ul><li>If you DO need new employees, first recruit from within. </li></ul><ul><li>Give all prospective applicants an equal opportunity for selection. </li></ul><ul><li>Accept only official company employment application forms. </li></ul><ul><li>Ensure that your employment application is legally sound & protects your interests. </li></ul>
  12. 12. 10 Basic Rules of Employee Recruiting (cont’d) <ul><li>Interviewers trained to ask the right questions </li></ul><ul><ul><ul><li>Avoid questions about: </li></ul></ul></ul><ul><ul><ul><ul><li>Race </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Religion </li></ul></ul></ul></ul><ul><ul><ul><ul><li>National origin </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Sex </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Age </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Disability </li></ul></ul></ul></ul>
  13. 13. <ul><li>Conduct background investigations & reference checks. </li></ul><ul><li>Evaluate candidates on objective criteria. </li></ul><ul><li>Ensure the right person(s) make the final decision. </li></ul><ul><li>Be consistent & fair throughout the process. </li></ul>10 Basic Rules of Employee Recruiting (cont’d)
  14. 14. How to Attract QUALITY Drivers <ul><li>REFERRALS </li></ul><ul><li>Advertising </li></ul><ul><li>Recruitment Firms/Employment Agencies </li></ul><ul><li>Johnny’s SOCIAL MEDIA MATRIX </li></ul>
  15. 15. Employee Screening <ul><li>Preliminary Interviews </li></ul><ul><li>Written Applications </li></ul><ul><ul><li>Consistent policy for unsolicited employment inquiries </li></ul></ul><ul><ul><li>Accept only applications on company-approved forms (no resumes) </li></ul></ul><ul><ul><li>Time limit on considering applications </li></ul></ul><ul><li>Planned or Scheduled Interviews </li></ul>
  16. 16. Interviewing Guidelines <ul><li>Be prepared </li></ul><ul><li>Be a DAMN GOOD listener </li></ul><ul><li>Be consistent </li></ul><ul><li>Be objective </li></ul><ul><li>Interview defensively </li></ul><ul><li>Hire Offensively </li></ul><ul><li>USE PROFILING!!! </li></ul>
  17. 17. Negligent Entrustment…bad deal <ul><li>Entrusting a vehicle to someone without completing proper steps </li></ul><ul><li>Closely related to: </li></ul><ul><ul><li>Respondeat Superior = Holds employer responsible for the conduct of an employee </li></ul></ul><ul><ul><li>Negligent Hiring = Failure to check for a poor driving record </li></ul></ul>
  18. 18. Negligent Entrustment Issues <ul><li>In a case alleging Negligent Entrustment: </li></ul><ul><ul><li>Driver must be incompetent </li></ul></ul><ul><ul><li>Employer knew or should have known this incompetence </li></ul></ul><ul><ul><li>Employer entrusted the vehicle to the driver </li></ul></ul><ul><ul><li>Driver was negligent on the occasion in question </li></ul></ul><ul><ul><li>Driver’s negligence caused the crash </li></ul></ul>
  19. 19. What Makes a Driver Competent? After all, common sense is not that common today! <ul><li>FMCSR driver requirements: </li></ul><ul><ul><li>Legal driving age for the state where license issued </li></ul></ul><ul><ul><li>Able to read & speak English </li></ul></ul><ul><ul><li>Able to safely operate the vehicle </li></ul></ul><ul><ul><li>Able to safely load & secure the cargo </li></ul></ul><ul><ul><li>Good health/physically able to operate vehicle </li></ul></ul><ul><ul><li>Holds a valid driver’s license </li></ul></ul><ul><ul><li>Completed application form for employment </li></ul></ul><ul><ul><li>Pass a driving test for the type of vehicle to be operated </li></ul></ul><ul><ul><li>No CDL Disqualifications </li></ul></ul>
  20. 20. CDL Disqualifications <ul><li>Driving CMV while under influence of controlled substance or alcohol </li></ul><ul><ul><li>Alcohol concentration of 0.04% or more </li></ul></ul><ul><ul><li>As prescribed by state law </li></ul></ul><ul><ul><li>Refusal to undergo testing </li></ul></ul><ul><li>Transportation, possession or unlawful use of controlled substance or drugs </li></ul><ul><li>Leaving the scene of an accident while operating a CMV </li></ul><ul><li>Committing a felony involving the use of a CMV </li></ul><ul><li>Violating out-of-service orders </li></ul><ul><li>Convicted of 2 or more “serious traffic violations” in less than 3 years </li></ul>
  21. 21. Knowledge of Driver’s Incompetence <ul><li>Employment record </li></ul><ul><li>Driver’s background </li></ul><ul><li>Driving record </li></ul><ul><li>You are negligent if: </li></ul><ul><ul><li>Records are missing or incomplete </li></ul></ul><ul><ul><li>Records show poor driving history </li></ul></ul>
  22. 22. Proof of Vehicle Entrustment <ul><li>Driver was within the scope of job duties </li></ul><ul><li>Vehicle not taken without permission </li></ul>
  23. 23. Was the Driver Negligent? <ul><li>Accident scene investigation </li></ul><ul><li>Interviews with involved parties & witnesses </li></ul><ul><li>Other evidence </li></ul><ul><ul><li>Citations </li></ul></ul>
  24. 24. Did Driver Negligence Cause Crash? <ul><li>Citation </li></ul><ul><li>Criminally charged </li></ul><ul><li>Otherwise ruled “at-fault” </li></ul>
  25. 25. Ways to Reduce Exposures <ul><li>Driver recruiting & selection practices </li></ul><ul><li>New hire evaluation & orientation </li></ul><ul><li>Ongoing driver reviews & training </li></ul><ul><li>Post-accident reviews & training </li></ul>
  26. 26. Other Exposures to Negligent Entrustment <ul><li>Loans of vehicles to non-employees </li></ul><ul><li>Contracted employees </li></ul><ul><ul><li>Security guard </li></ul></ul><ul><ul><li>Maintenance contractor </li></ul></ul><ul><ul><li>Owner/operator under your authority </li></ul></ul><ul><ul><li>Temporary employee from employment service </li></ul></ul><ul><li>Trip leasing </li></ul>
  27. 27. Drug & Alcohol Testing <ul><li>Part 40 Revisions </li></ul><ul><li>Violations </li></ul><ul><li>Substance Abuse Professional (SAP) </li></ul><ul><li>Return-to-Duty Process </li></ul>
  28. 28. Part 40 Revisions Effective January 18, 2001 <ul><li>Validity Testing </li></ul><ul><ul><li>MRO review of substitution and adulteration test results & split specimen testing </li></ul></ul><ul><li>Public Interest Exclusions (PIE) </li></ul><ul><ul><li>Protects public from the effects of serious non-compliance by service agents </li></ul></ul>
  29. 29. Part 40 Revisions Effective August 1, 2001 <ul><li>Validity Testing </li></ul><ul><ul><li>All specimens </li></ul></ul><ul><li>Stand-Down </li></ul><ul><ul><li>Temporary removal of employees from safety-sensitive duties after a MRO-confirmed positive, adulterated or substituted test result </li></ul></ul><ul><li>Training </li></ul><ul><ul><li>Enhanced training requirements for collectors, BATs, STTs, MROs & SAPs </li></ul></ul><ul><ul><li>Refresher training every 5 years for collectors, BATs & STTs </li></ul></ul><ul><ul><li>Continuing education for MROs & SAPs </li></ul></ul>
  30. 30. Part 40 Revisions Effective August 1, 2001 (cont’d) <ul><li>Laboratory Process </li></ul><ul><ul><li>Initiate validity testing on all specimens </li></ul></ul><ul><li>Medical Review Officer (MRO) </li></ul><ul><ul><li>Prohibits MRO & laboratory relationship which may create a conflict of interest </li></ul></ul><ul><ul><li>Required to personally conduct a verification interview with employee </li></ul></ul><ul><li>Alcohol Testing </li></ul><ul><ul><li>New Breath Testing Form </li></ul></ul><ul><ul><li>Procedures to correct problems in the testing process </li></ul></ul>
  31. 31. Part 40 Revisions Effective August 1, 2001 (cont’d) <ul><li>Substance Abuse Professional (SAP) & Return-to-Duty Process </li></ul><ul><ul><li>Required education and/or treatment program for all positive tests & refusals to test </li></ul></ul><ul><li>Other Issues </li></ul><ul><ul><li>Employers required to obtain drug & alcohol testing information from an applicant’s employers in the past 2 years </li></ul></ul><ul><ul><li>“ Blanket Releases” still prohibited </li></ul></ul>
  32. 32. Drug/Alcohol Rule Violations <ul><li>Verified positive drug test result </li></ul><ul><li>DOT alcohol test result of 0.04 or greater </li></ul><ul><li>Refusal to test </li></ul><ul><li>Violation of drug/alcohol use under a DOT agency regulation </li></ul>
  33. 33. Employer Responsibilities <ul><li>Provide a listing of available SAPs </li></ul><ul><li>Driver cannot perform safety-sensitive duties until SAP evaluation, referral & education/treatment completed </li></ul>
  34. 34. Substance Abuse Professional (SAP) <ul><li>Who is qualified? </li></ul><ul><ul><li>A licensed physician (Doctor of Medicine or Osteopathy) </li></ul></ul><ul><ul><li>A licensed or certified social worker </li></ul></ul><ul><ul><li>A licensed or certified psychologist </li></ul></ul><ul><ul><li>A licensed or certified employee assistance professional </li></ul></ul><ul><ul><li>A certified drug and alcohol counselor </li></ul></ul>
  35. 35. Substance Abuse Professional (SAP) <ul><li>Any other requirements? </li></ul><ul><ul><li>Basic knowledge </li></ul></ul><ul><ul><li>Qualification training </li></ul></ul><ul><ul><li>Continuing education </li></ul></ul><ul><ul><li>Documentation </li></ul></ul>
  36. 36. Return-to-Duty Process <ul><li>SAP Evaluation </li></ul><ul><li>SAP referral to appropriate education and/or treatment program </li></ul><ul><li>Completion of prescribed program </li></ul><ul><li>Return-to-duty test </li></ul><ul><li>“ Fitness for duty” determination by employer </li></ul>
  37. 37. Follow-Up Tests <ul><li>SAP functions </li></ul><ul><ul><li>Written follow-up testing plan presented to Designated Employee Representative (DER) </li></ul></ul><ul><ul><li>Determines the frequency & types of tests </li></ul></ul><ul><ul><li>Requires 6 unannounced tests in the first 12 months of safety-sensitive duty </li></ul></ul>
  38. 38. Follow-Up Tests <ul><li>Employer responsibilities </li></ul><ul><ul><li>Carry out SAP testing plan </li></ul></ul><ul><ul><li>Schedule testing dates </li></ul></ul><ul><ul><ul><li>Unannounced & without advance notice </li></ul></ul></ul><ul><li>Other tests cannot be substituted (i.e. random testing program) </li></ul><ul><li>A cancelled follow-up test does not count as completed </li></ul>
  39. 39. Hours of Service Rules HOURS-OF-SERVICE RULES Short-Haul Provision for non-CDL vehicles within a 150 air mile radius added. Allows two 16 hr days in a 7 day period, no logbook required provided motor carrier maintains time records. CMV drivers using the sleeper berth provision must take at least 8 consecutive hours in the sleeper berth, plus 2 consecutive hours either in the sleeper berth, off duty, or any combination of the two. Commercial motor vehicle (CMV) drivers using a sleeper berth must take 10 hours off duty, but may split sleeper-berth time into two periods provided neither is less than 2 hours. No Change <ul><li>May not drive after 60/70 hours on duty in 7/8 consecutive days. </li></ul><ul><li>A driver may restart a 7/8 consecutive day </li></ul><ul><li>period after taking 34 or more consecutive </li></ul><ul><li>hours off duty. </li></ul>No Change May not drive beyond the 14 th hour after coming on duty, following 10 consecutive hours off duty. No Change May drive a maximum of 11 hours after 10 consecutive hours off duty. 2005 Rule Property-Carrying CMV Drivers Compliance On & After 10/01/05 2003 Rule Property-Carrying CMV Drivers Compliance Through 09/30/05
  40. 40. Exemptions to Rules <ul><li>100-Air mile radius </li></ul><ul><li>Exempt from keeping a logbook if they meet the following 5 requirements found in the regulation: </li></ul><ul><ul><li>Remains within 100 air miles (115.08 statute miles) of their work reporting location. </li></ul></ul><ul><ul><li>Returns to the work reporting location within 12 consecutive hours of going on duty </li></ul></ul><ul><ul><li>Released within 12 hours, the driver must be afforded 10 consecutive hours off duty </li></ul></ul><ul><ul><li>May not drive more than 11 hours during the 12 hour period </li></ul></ul>
  41. 41. 100 air-mile radius driver 395.1(e)(1) (cont.) <ul><ul><li>The motor carrier that employs the driver maintains and retains, accurate and true time records that indicate: </li></ul></ul><ul><ul><li>The time the driver begins to work; </li></ul></ul><ul><ul><li>The total number of hours the driver works; </li></ul></ul><ul><ul><li>The time the driver is released from work; </li></ul></ul><ul><ul><li>And the preceding 7 days of work activities (time records) for drivers used the first time or intermittently </li></ul></ul>
  42. 42. Short - haul Operations Non CDL, 150 air mile radius 395.1(e)(2) <ul><li>Drivers of Non-CDL vehicles are exempt from keeping a log if they meet the following requirements found in the regulation: </li></ul><ul><ul><li>Operates within 150 air mile radius (172.6 statute miles) of where driver reports to and is released from work (normal work reporting location). </li></ul></ul><ul><ul><li>Returns to normal work location and is released at the end of each duty tour (14 or 16 hrs). </li></ul></ul><ul><ul><li>Has at least 10 consecutive hours off separating each on-duty period. </li></ul></ul><ul><ul><li>May not drive more than 11 hours following 10 hours off duty. </li></ul></ul>
  43. 43. Non CDL, 150 air mile radius 395.1(e)(2) (cont.) <ul><ul><li>The driver does not drive; </li></ul></ul><ul><ul><ul><li>(A) After the 14 th hour after coming on duty on 5 days of any period of 7 consecutive days; and </li></ul></ul></ul><ul><ul><ul><li>(B) After the 16 th hour on 2 days of any period of 7 consecutive days </li></ul></ul></ul><ul><ul><li>The motor carrier maintains and retains for 6 months true and accurate time records </li></ul></ul><ul><ul><ul><li>(The same as those required for the 100 air mile radius driver) </li></ul></ul></ul>
  44. 44. Management of Hours of Service <ul><li>Record retention - 6 months </li></ul><ul><li>Auditing logs </li></ul><ul><ul><li>Log for every day </li></ul></ul><ul><ul><li>Completion of logs/trip records </li></ul></ul><ul><ul><li>Falsification of logs </li></ul></ul><ul><ul><li>Logs to home terminal - 13 days </li></ul></ul><ul><ul><li>Form & manner </li></ul></ul><ul><ul><li>Accurate mileage </li></ul></ul><ul><ul><li>Check for speeding </li></ul></ul><ul><ul><li>Check for Hours violations </li></ul></ul>
  45. 45. Compliance with Regulations <ul><li>Enforcement Tools </li></ul><ul><ul><li>SAFER System </li></ul></ul><ul><ul><li>SafeStat System </li></ul></ul><ul><li>Inspections </li></ul><ul><ul><li>CVSA (Roadside) </li></ul></ul><ul><ul><li>FMCSA Compliance Reviews </li></ul></ul><ul><li>Safety Fitness </li></ul>
  46. 46. SAFER System <ul><li>S afety A nd F itness E lectronic R ecords System </li></ul><ul><li>www.safersys.org </li></ul><ul><li>“ Snapshot” - condensed Carrier Profile </li></ul><ul><ul><li>Location </li></ul></ul><ul><ul><li>Identification Numbers </li></ul></ul><ul><ul><li>Type </li></ul></ul><ul><ul><li>Commodities carried/shipped </li></ul></ul><ul><ul><li>Inspection Summary </li></ul></ul><ul><ul><li>Crash Summary </li></ul></ul><ul><ul><li>Safety Rating </li></ul></ul>
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  49. 49. SafeStat System ( Safe ty Stat us) <ul><li>www.ai.volpe.dot.gov </li></ul><ul><li>Identifies carriers for Safety Improvement Programs </li></ul><ul><li>4 Safety Evaluation Areas (SEAs) </li></ul><ul><ul><li>Accident SEA </li></ul></ul><ul><ul><li>Driver SEA </li></ul></ul><ul><ul><li>Vehicle SEA </li></ul></ul><ul><ul><li>Safety Management SEA </li></ul></ul>
  50. 50. SafeStat Scoring <ul><li>Value from 0-100 determined for all carriers with sufficient data in each SEA </li></ul><ul><li>Value of 75-100 = Deficient </li></ul><ul><li>Carriers must be deficient in at least 2 SEA’s to have an Overall SafeStat Score </li></ul><ul><ul><li>FMCSA Compliance Reviews </li></ul></ul>
  51. 51. Sample SafeStat Report
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  54. 54. Driver OOS Inspections
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  60. 60. Inspection Selection System (ISS) <ul><li>Targets carriers with poor safety history </li></ul><ul><li>Used on roadside inspections </li></ul><ul><ul><li>Aids in the selection of “best” drivers/vehicles for inspection </li></ul></ul><ul><ul><li>Inspector enters DOT/ICC number for inspection value </li></ul></ul><ul><ul><li>Recommends specific regulatory areas to concentrate on – inspector makes final decision </li></ul></ul><ul><li>Currently used in 47 states </li></ul><ul><li>Uses a local database which is refreshed weekly via SAFER System </li></ul><ul><li>60% increase in OOS violations </li></ul>
  61. 61. ASPEN <ul><li>Driver/vehicle inspection software </li></ul><ul><li>Used by most States & FMCSA </li></ul><ul><li>Collects inspection details & prints inspection report </li></ul><ul><li>Transfers inspection information to SAFER System </li></ul><ul><li>Linked to ISS </li></ul>
  62. 62. PRISM <ul><li>P erformance & R egistration I nformation S ystems M anagement </li></ul><ul><ul><li>CMV registration process </li></ul></ul><ul><ul><li>Vehicle is identified with responsible carrier </li></ul></ul><ul><ul><li>Safety fitness required to obtain plates </li></ul></ul><ul><ul><li>Registration as incentive to improve </li></ul></ul>
  63. 63. CVSA Inspections <ul><li>Commercial Vehicle Safety Alliance (CVSA) - Non-profit organization that standardizes inspections of commercial vehicles </li></ul><ul><ul><li>Level I – North American Standard Inspection </li></ul></ul><ul><ul><ul><li>Full inspection of driver and vehicle </li></ul></ul></ul><ul><ul><li>Level II – Walk-around Driver/Vehicle Inspection </li></ul></ul><ul><ul><li>Level III – Driver-Only Inspection </li></ul></ul><ul><ul><li>Level IV – Special Inspections </li></ul></ul><ul><ul><li>Level V – Vehicle-Only Inspection </li></ul></ul>
  64. 64. OOS Violations <ul><li>Driver </li></ul><ul><ul><li>National average: 9.09% </li></ul></ul><ul><li>Vehicle </li></ul><ul><ul><li>National average: 33.33% (CRAPPY) </li></ul></ul><ul><li>HazMat </li></ul><ul><ul><li>National average: 4.76% </li></ul></ul>
  65. 65. FMCSA Compliance Review <ul><li>An on-site examination of motor carrier operations: </li></ul><ul><ul><li>Drivers’ hours of service </li></ul></ul><ul><ul><li>Maintenance/inspection </li></ul></ul><ul><ul><li>Driver qualification </li></ul></ul><ul><ul><li>CDL requirements </li></ul></ul><ul><ul><li>Financial responsibility </li></ul></ul><ul><ul><li>Accidents </li></ul></ul><ul><ul><li>Hazardous materials </li></ul></ul><ul><ul><li>Safety & transportation records </li></ul></ul><ul><li>Determines if carrier meets Safety Fitness Standards </li></ul>
  66. 66. What can trigger a Review? <ul><li>A request to change a Safety Rating </li></ul><ul><li>Potential violations of safety regulations </li></ul><ul><li>Complaint </li></ul><ul><li>Evidence of safety violations </li></ul><ul><li>Recordable Accident </li></ul>
  67. 67. Safety Fitness <ul><li>Demonstration of adequate Safety Management Controls , which function effectively to ensure compliance with applicable safety requirements. </li></ul>
  68. 68. Safety Management Controls <ul><li>Systems, policies, programs, practices & procedures </li></ul><ul><ul><li>Ensure compliance with applicable safety regulations </li></ul></ul><ul><ul><li>Ensure the safe transportation of products/passengers </li></ul></ul><ul><ul><li>Reduce the risk of highway accidents or HazMat incidents </li></ul></ul><ul><li>Evaluated through FMCSA Compliance Reviews </li></ul>
  69. 69. Safety Fitness Ratings Satisfactory Adequate safety management controls to meet Safety Fitness Standards Conditional Lacking adequate safety management controls to meet Safety Fitness Standards Unsatisfactory Lacking adequate safety management controls to meet Safety Fitness Standards, resulting in violations of the regulations.
  70. 70. Measuring Safety Fitness <ul><li>CDL standard violations (Part 383) </li></ul><ul><li>Inadequate levels of financial responsibility (Part 387) </li></ul><ul><li>Use of unqualified drivers (Part 391) </li></ul><ul><li>Improper use & driving of motor vehicles (Part 392) </li></ul><ul><li>Unsafe vehicles operating on highways (Part 393) </li></ul><ul><li>Failure to maintain accident registers & copies of accident reports (Part 390) </li></ul>
  71. 71. Measuring Safety Fitness (cont’d) <ul><li>Use of fatigued drivers (Part 395) </li></ul><ul><li>Inadequate inspection, repair & maintenance of vehicles </li></ul><ul><li>Transportation of HazMat, driving & parking rule violations (Part 397) </li></ul><ul><li>Hazardous materials regulations violations (Parts 170-177) </li></ul><ul><li>Accidents & HazMat incidents </li></ul>
  72. 72. Unsatisfactory Safety Rating <ul><li>Means “Unfit” </li></ul><ul><li>Prohibited from operating CMVs in interstate commerce </li></ul><ul><li>Motor carriers have 60 days after determined “unfit” to improve or face shutdown </li></ul><ul><li>Passenger/HM carriers have 45 days to correct deficiencies </li></ul>
  73. 73. OSHA Recordkeeping <ul><li>Revised Rule </li></ul>
  74. 74. Revised Rule <ul><li>Published in the Federal Register on January 19, 2001 </li></ul><ul><li>Affects 1.4 million establishments </li></ul><ul><li>Effective January 1, 2002 </li></ul>
  75. 75. Benefits of the Revised Rule <ul><li>Improves employee involvement </li></ul><ul><li>Creates simpler forms </li></ul><ul><li>Provides clearer regulatory requirements </li></ul><ul><li>Increases employers’ flexibility to use computers </li></ul>
  76. 76. Forms <ul><li>OSHA Form 300 – Log of Work-Related Injuries and Illnesses </li></ul><ul><li>OSHA Form 301 – Injury and Illness Incident Report </li></ul><ul><li>OSHA Form 300A – Summary of Work-Related Injuries and Illnesses </li></ul>1904.29
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  80. 80. Recording Criteria <ul><li>Eliminates different criteria for recording work-related injuries and work-related illnesses </li></ul><ul><li>Former rule required employers to record all illnesses, regardless of severity </li></ul>1904.4
  81. 81. Recording Criteria Decision Tree 1904.4 Did the employee experience an injury or illness? Is the injury or illness a new case? Is the injury or illness work-related? Does the injury or illness meet the general recording criteria or the application to specific cases? Update the previously recorded injury or illness entry if necessary. NO YES YES Record the injury or illness. Do not record the injury or illness. NO YES NO YES NO
  82. 82. Work-Relatedness <ul><li>Cases are work-related if: </li></ul><ul><ul><li>An event or exposure in the work environment either caused or contributed to the resulting condition </li></ul></ul><ul><ul><li>An event or exposure in the work environment significantly aggravated a pre-existing injury or illness </li></ul></ul>1904.5
  83. 83. Work-Related Exceptions <ul><li>Adds additional exceptions to the definition of work relationship to limit recording of cases involving: </li></ul><ul><ul><li>Eating, drinking, or preparing food or drink for personal consumption </li></ul></ul><ul><ul><li>Common colds and flu </li></ul></ul><ul><ul><li>Voluntary participation in wellness or fitness programs </li></ul></ul><ul><ul><li>Personal grooming or self-medication </li></ul></ul>1904.5(b)(2)
  84. 84. General Recording Criteria <ul><li>Requires records to include any work-related injury or illness resulting in one of the following: </li></ul><ul><ul><li>Death </li></ul></ul><ul><ul><li>Days away from work </li></ul></ul><ul><ul><li>Restricted work or transfer to another job </li></ul></ul><ul><ul><li>Medical treatment beyond first aid </li></ul></ul><ul><ul><li>Loss of consciousness </li></ul></ul><ul><ul><li>Diagnosis of a significant injury/illness by a physician or other licensed health care professional </li></ul></ul>1904.7(a)
  85. 85. General Recording Criteria (cont’d) <ul><li>Includes new definitions of medical treatment and first aid to simplify recording decisions </li></ul><ul><li>Clarifies the recording of “light duty” or restricted work cases </li></ul>1904.7(b)(5)
  86. 86. Recording Needlesticks <ul><li>Requires employers to record all needlestick and sharps injuries involving contamination by another person’s blood or other potentially infectious material </li></ul>1904.8
  87. 87. Hearing Loss <ul><li>Requires employers to record 25 dB shifts in employees’ hearing during 2002 </li></ul><ul><li>OSHA will reconsider the hearing loss criteria for 2003 and beyond </li></ul>1904.10
  88. 88. Musculoskeletal Disorders <ul><li>Applies the same recording criteria to musculoskeletal disorders (MSDs) as to all other injuries and illnesses </li></ul><ul><li>Employer retains flexibility to determine whether an event or exposure in the work environment caused or contributed to the MSD </li></ul><ul><li>OSHA will use the one-year delay to develop definitions of ergonomic injury and MSD consistent with a comprehensive effort </li></ul>1904.12
  89. 89. Tuberculosis & Medical Removal <ul><li>Includes separate provisions describing the recording criteria for cases involving the work-related transmission of tuberculosis </li></ul><ul><li>Requires employers to record cases of medical removal under OSHA standards </li></ul>1904.11 & 1904.9
  90. 90. Day Counts <ul><li>Eliminates the term “lost workdays” and focuses on days away or days restricted or transferred </li></ul><ul><li>Includes new rules for counting that rely on calendar days instead of workdays </li></ul>1904.7(b)(3)
  91. 91. Employee Involvement <ul><li>Requires employers to establish a procedure for employees to report injuries and illnesses and tell their employees how to report </li></ul><ul><li>Employers are prohibited from discriminating against employees who do report </li></ul><ul><li>Employee representatives will now have access to those parts of the OSHA 301 form relevant to workplace safety and health </li></ul>1904.35 & 36
  92. 92. Employee Privacy <ul><li>Prohibits employers from entering an individual’s name on Form 300 for certain types of injuries/illnesses </li></ul><ul><li>Provides employers the right not to describe the nature of sensitive injuries where the employee’s identity would be known </li></ul><ul><li>Gives employee representatives access only to the portion of Form 301 which contains no personal information </li></ul><ul><li>Requires employers to remove employees’ names before providing the data to persons not provided access rights under the rule </li></ul>1904.29(b)
  93. 93. Annual Summary <ul><li>Requires the annual summary to be posted for three months instead of one </li></ul><ul><li>Requires certification of the summary by a company executive </li></ul>1904.32
  94. 94. Reporting to OSHA <ul><li>Changes the reporting of fatalities and catastrophes to exclude some public transportation and motor vehicle accidents </li></ul>1904.39
  95. 95. For More Information <ul><li>Go to OSHA’s website: </li></ul><ul><li>www.osha.gov </li></ul><ul><li>for additional information about the new recordkeeping rule. </li></ul>
  96. 96. Insurance & Insurability <ul><li>State of the Market </li></ul><ul><li>Basis of Insurability </li></ul><ul><li>How to Improve Insurability </li></ul>
  97. 97. State of the Market <ul><li>Increase in Property & Casualty premiums </li></ul><ul><ul><li>Started increasing in 2000 </li></ul></ul><ul><ul><li>Accelerated in 2001 with renewals </li></ul></ul><ul><ul><li>September 11 pushed premiums higher </li></ul></ul><ul><ul><li>Soft Market after; many sub-rated markets </li></ul></ul><ul><li>Insurance companies forced to get better rate of return </li></ul><ul><li>Risk assessment getting more technical </li></ul>
  98. 98. State of the Market <ul><li>*Based on surveys from 1,000 carriers by ATA </li></ul>
  99. 99. Why the Increase in Premiums? <ul><li>“ Soft market” prevailed for many years </li></ul><ul><li>New insurance companies entered transportation market </li></ul><ul><ul><li>Cut rates </li></ul></ul><ul><li>Existing P&C insurance companies started “transportation programs” </li></ul><ul><ul><li>Increased competition & kept rates low </li></ul></ul><ul><li>Reduced investment income </li></ul><ul><li>Re-insurance premiums rose due to “shock losses” </li></ul><ul><ul><li>Primary rates increased </li></ul></ul>
  100. 100. Why the Increase in Premiums? (cont’d) <ul><li>Management & shareholders more “bottom-line” oriented </li></ul><ul><li>Insurance companies dropped transportation programs </li></ul><ul><li>Companies disappeared through acquisitions, mergers, etc. </li></ul><ul><ul><li>Reduced number of competing companies </li></ul></ul>
  101. 101. Basis of Insurability <ul><li>Underwriting = Process of reviewing your operation for insurance purposes: </li></ul><ul><ul><li>Insurance application </li></ul></ul><ul><ul><li>Nature of operation </li></ul></ul><ul><ul><li>Financial records & reports </li></ul></ul><ul><ul><li>Loss history </li></ul></ul><ul><ul><li>Location </li></ul></ul><ul><ul><li>Area of travel </li></ul></ul><ul><ul><li>Commodities </li></ul></ul><ul><ul><li>Type of equipment </li></ul></ul><ul><ul><li>Age of business </li></ul></ul><ul><ul><li>Driver qualifications & records </li></ul></ul>
  102. 102. How to Improve Insurability <ul><li>Risk Assessment </li></ul><ul><ul><li>Assess your operation </li></ul></ul><ul><ul><li>Reduce unnecessary risks </li></ul></ul><ul><li>Analyze all losses </li></ul><ul><ul><li>Develop & document programs to reduce losses </li></ul></ul><ul><li>Following good business practices </li></ul><ul><ul><li>Maintain proper documentation </li></ul></ul><ul><ul><li>Good claims handling, reporting, procedures & paper trails </li></ul></ul><ul><ul><li>Written policies/procedures & adhere to them </li></ul></ul><ul><li>Hire qualified drivers with good records </li></ul><ul><li>Train drivers & other employees </li></ul>
  103. 103. How to Improve Insurability (cont’d) <ul><li>Reduce driver/employee turnover </li></ul><ul><li>Track & reduce accidents </li></ul><ul><ul><li>Re-train drivers after accidents </li></ul></ul><ul><li>Frequently obtain your Carrier Safety Profile </li></ul><ul><ul><li>Track & reduce OOS rates </li></ul></ul><ul><li>Stay in compliance with regulations </li></ul><ul><li>Develop driver recognition programs </li></ul><ul><li>Develop & maintain an effective safety & loss control program </li></ul><ul><li>Adequate security measures </li></ul>
  104. 104. Elements of an Effective Safety Program <ul><li>Written Safety Policy/Statement </li></ul><ul><li>Company/Driver’s Manual </li></ul><ul><li>Written Disciplinary Policies </li></ul><ul><li>Safety Awards or Incentive Programs </li></ul><ul><ul><li>Recognition and/or Monetary </li></ul></ul><ul><li>Safety and Accident Review Committee </li></ul><ul><ul><li>Quarterly committee meetings </li></ul></ul><ul><li>Quarterly company-wide safety meetings </li></ul><ul><li>Safety Awareness Campaigns </li></ul><ul><ul><li>Newsletters </li></ul></ul><ul><ul><li>Paycheck stuffers </li></ul></ul><ul><ul><li>Wireless/Satellite communication </li></ul></ul>
  105. 105. Elements of an Effective Safety Program (cont’d) <ul><li>Annual Accident Analysis/Trending </li></ul><ul><ul><li>Accident Frequency Rates </li></ul></ul><ul><ul><ul><li>Overall Frequency Rate </li></ul></ul></ul><ul><ul><ul><li>DOT Recordable </li></ul></ul></ul><ul><ul><ul><li>DOT Recordable/Preventable </li></ul></ul></ul><ul><li>Determine accident causes/factors </li></ul><ul><li>Implement disciplinary policies </li></ul><ul><li>Re-training </li></ul><ul><li>Develop Action Plans </li></ul>
  106. 106. Security Measures <ul><li>More than physical security measures </li></ul><ul><ul><li>Institutional/Procedural control </li></ul></ul><ul><ul><li>Management resolve </li></ul></ul><ul><ul><ul><li>Carriers who place the most management emphasis on security have the most successful security programs. </li></ul></ul></ul><ul><li>Cargo/Equipment Security </li></ul><ul><ul><li>Personnel </li></ul></ul><ul><ul><li>Outside Vendors </li></ul></ul><ul><ul><li>Facility Access </li></ul></ul>
  107. 107. Personnel Screening <ul><li>Submit a detailed employment application </li></ul><ul><ul><li>Photograph of applicant </li></ul></ul><ul><ul><li>List of past residences </li></ul></ul><ul><ul><li>Prior employment history – 10 years </li></ul></ul><ul><li>Verify address & past employment </li></ul><ul><li>Credit record </li></ul><ul><li>Criminal record (if possible) </li></ul>
  108. 108. ID System <ul><li>Identifies personnel authorized to enter cargo/equipment handling areas </li></ul><ul><li>ID cards </li></ul><ul><ul><li>Physical description & photograph </li></ul></ul><ul><ul><li>Name & address </li></ul></ul><ul><ul><li>Date of birth </li></ul></ul><ul><ul><li>Signature </li></ul></ul><ul><ul><li>Credential expiration date </li></ul></ul><ul><li>Card security </li></ul><ul><ul><li>Laminate to prevent alterations </li></ul></ul><ul><ul><li>Assigned control number </li></ul></ul><ul><ul><li>Recover cards from terminated employees </li></ul></ul>
  109. 109. Training Topics <ul><li>Include in loss control policy, procedures manual & orientation </li></ul><ul><ul><li>Procedures for pre-loaded trailers </li></ul></ul><ul><ul><li>“ Live” loading </li></ul></ul><ul><ul><li>Proper loading & securement techniques for cargo </li></ul></ul><ul><ul><li>Theft prevention </li></ul></ul>
  110. 110. Additional Training Topics <ul><li>Notification procedures for cargo incidents </li></ul><ul><li>Multiple drop loads </li></ul><ul><li>Relay loads </li></ul><ul><li>Handling & unloading cargo at consignee </li></ul><ul><li>Cargo incidents while loading/unloading </li></ul><ul><li>Refused loads </li></ul><ul><li>High value loads </li></ul>
  111. 111. Outside Vendors <ul><li>Verify background </li></ul><ul><li>Examine contractor vehicles parked in or near cargo areas </li></ul><ul><li>Restrict entrance to necessary areas </li></ul><ul><li>Must display identification </li></ul>
  112. 112. Facility Access <ul><li>Reduce vulnerability to theft </li></ul><ul><li>Provide physical barrier against unauthorized access to cargo/equipment </li></ul><ul><li>Various access control measures </li></ul><ul><ul><li>Gates/fences </li></ul></ul><ul><ul><li>Intrusion-detection alarms </li></ul></ul><ul><ul><li>Electronic access control systems </li></ul></ul><ul><ul><li>Automated gatehouse systems </li></ul></ul>
  113. 113. Parking <ul><li>Prohibit private passenger vehicle parking in or near cargo areas </li></ul><ul><li>Security controls for access to employee parking areas </li></ul><ul><ul><li>Outside fenced operational areas </li></ul></ul><ul><ul><li>Substantial distance from cargo areas </li></ul></ul><ul><ul><li>Pass through a supervised area when exiting cargo areas </li></ul></ul><ul><ul><li>Notify management/security personnel during hours of employment </li></ul></ul><ul><ul><li>Parking by permit only </li></ul></ul><ul><ul><li>Temporary parking permits for visitors/vendors </li></ul></ul>
  114. 114. Risk Control
  115. 115. What is Risk? <ul><li>The measure of the probability & severity of a loss event taking place </li></ul>Risk = Probability x Severity
  116. 116. Risk Manager <ul><li>Responsible for insurance programs & other activities that minimize losses resulting from: </li></ul><ul><ul><li>Fire </li></ul></ul><ul><ul><li>Accidents </li></ul></ul><ul><ul><li>Other natural & man-made losses </li></ul></ul>
  117. 117. Probability <ul><li>Likelihood of event taking place </li></ul><ul><li>Can be classified as: </li></ul><ul><ul><li>Frequent </li></ul></ul><ul><ul><li>Probable </li></ul></ul><ul><ul><li>Occasional </li></ul></ul><ul><ul><li>Remote </li></ul></ul><ul><ul><li>Improbable </li></ul></ul>
  118. 118. Severity <ul><li>Magnitude of the loss in a given period of time </li></ul><ul><li>Can be classified as: </li></ul><ul><ul><li>Catastrophic </li></ul></ul><ul><ul><li>Critical </li></ul></ul><ul><ul><li>Marginal </li></ul></ul><ul><ul><li>Negligible </li></ul></ul>
  119. 119. Reducing Probability & Severity <ul><li>Factors in traffic accidents </li></ul><ul><ul><li>Equipment condition </li></ul></ul><ul><ul><li>Driver selection </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Supervision </li></ul></ul>
  120. 120. THANK YOU!

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