Cost of Non-Compliance for DOT Regulations

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New regulations from the US DOT and the FMSCA will force trucking firms to invest in electronic onboard recording devices (EOBR), at considerable cost. However, the cost of non-compliance of these regulations is significantly higher. This presentation explores the costs to firms that do not fully comply with these new regulations.

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Cost of Non-Compliance for DOT Regulations

  1. 1. DOT Compliance What’s the true cost of non-compliance? Presented by Dispatching Solutions
  2. 2. Cost of Non-Compliance Overview New regulations from the US DOT and the FMSCA will force trucking firms to invest in electronic onboard recording devices (EOBR), at considerable cost. However, the cost of non-compliance of these regulations is significantly higher. This presentation explores the costs to firms that do not fully comply with these new regulations.
  3. 3. DOT Compliance Requirements The DOT’s requirements for Hours of Service reporting became effective on July 1, 2013: • Allows only one “34 Hour restart” per week and must include 2 - 1:00am to 5:00am periods • Old Rule: 82 Hours per week – New Rule: 70 • Drivers cannot drive after working 8 hours without having a 30 minute break • Electronic Onboard Recorders (EOBRs) for onsite inspection by DOT Officers
  4. 4. DOT Compliance Requirements The DOT’s requirements for Electronic On Board Recorders: • Mandate to take affect later in 2013 • Final ruling due out in October 2013 • Requires all motor carriers currently required to maintain records of duty status (RODS) for HOS recordkeeping to use EOBRs • These devices must be made available to inspectors during roadside inspections.
  5. 5. Cost of Non-Compliance The DOT/FMCSA has several remedies available to them for handling non-compliant firms: • Fines • Out-of-Service Violations • Lawsuits • Increased in Inspections/Detailed Inspections • Impact on Insurance Rates
  6. 6. Cost of Non-Compliance Fines • In 2011, DOT regulated companies paid $30,674,218 in fines for failure to comply with Federal Motor Carrier Safety Regulations (FMCSRs) • The average fine per case was $5,050 • The most costly violation was falsification of a driver log where carriers paid an average fine of $9,394.
  7. 7. Cost of Non-Compliance Fines Sample Fines from Actual DOT Compliance Reviews: • False reports of records of duty status = $26,250.00 • False reports of records of duty status = $17,480.00 • Failing to provide security awareness training $8,550.00 • Using a driver who has tested positive for a drug = $6,664.00 • Failing to do random drug tests at applicable annual rate = $5,340.00 • Failing to require driver to prepare vehicle inspection report = $4,070.00
  8. 8. Cost of Non-Compliance Out-of-Service • Lost revenue from drivers and vehicles being placed out of service for non-compliance is a large cost to carriers • Each hour of down time can cost up to $87.50 when you consider an average speed of 50 mph and revenue of $1.75 per mile • Being placed out of service for 10 hours due to a driver log violation can cost upwards of $870.00. • Costs for out of service roadside vehicle violation repairs can be three to five times the cost of the repair being performed at the home terminal
  9. 9. Cost of Non-Compliance Lawsuits • According to transportation legal experts, juries are relatively accepting of truck drivers who make mistakes. Juries are much less forgiving when safety issues are ignored. A trucking company gets to explain two problems or inconsistencies to the jury. After that, the jury doesn’t listen and will punish the trucking company with damages. • Not only will the carrier pay for damages but the costs associated with the legal defense. Attorneys, additional experts, and depositions can add tens of thousands of dollars to the cost of noncompliance.
  10. 10. Cost of Non-Compliance Additional Costs Other costs associated with non-compliance: • Increase in number of inspections • More detailed inspections • Impact on insurance rates • Loss of business due to poor CSA scores • Reduction in contracted rates because of poor CSA scores
  11. 11. Cost of Non-Compliance Summary • While the costs of compliance are considerable; the cost of non-compliance is significantly more • Carriers need to invest in compliance • Spending money on log auditing, drug and alcohol testing and training drivers is costly but, the bottom line is, it’s cheaper than non-compliance!
  12. 12. Cost of Non-Compliance Resources • FMCSA on Hours-of-Service - http://www.fmcsa.dot.gov/rules- regulations/topics/hos/index.htm • FMCSA on EOBRs - http://www.fmcsa.dot.gov/rules- regulations/administration/rulemakings/notices/EOB R-Intent.aspx
  13. 13. DOT Compliance Solution Overview DSi Offers a Solution for DOT Compliance • Web-based - view from anywhere, any device • Dashboard – drivers view & input data on their EOBR • Violation Warnings – divers provided early warning when approaching HoS limits • LOG Approval – driver’s approve their logs on their EOBR, Managers edit/approve logs on their dashboard
  14. 14. Dispatching Solutions, Inc. Contact: Vic Tohak Director of Sales On the Phone: 909-460-6404 x103 Cell: 757-708-8347 On the web: www.DispatchingSolutions.com By Email: vic@DispatchingSolutions.com 440 N. Mountain Ave. Suite 208, Upland, CA 91786

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