ROI – Not Just for Money

When we hear the word “investment” we almost always relate it to a financial tool. While it’s true that almost anything can be monetized, the investment in PROI is of a different nature. PROI is about the investment of personal resources (i.e. time, emotion and effort) to realize a particular change. It doesn’t matter if the change is a personal change or if it’s an organizational change initiative. Either way, there is time invested in getting to understand the change and what it really means to you. There is also emotion invested in how you feel within the context of the change. Finally, there is effort invested in how much are you really giving to effectuate the change.

“What’s In It for me” is all about the realization of a PROI and then taking full advantage of the opportunity to reap the greatest personal benefit. When presented in a personal change context, the PROI is obvious (stronger health, better quality of life, lower insurance premiums, greater personal happiness, etc.). When presented in a business change context, discovery of the PROI is highly dependent on the skill and awareness of the change team. We’ll talk more about this later.

In both cases, without the people affected by the change realizing their respective PROI’s, the change will likely not be successful. The argument is therefore quite strong, that in this case, selfish can and does translate to the greater good. This is additional reinforcement of our concept of selfish altruism.

However, most of us aren’t wired to do things or accept immediate changes for some pie-in-the-sky promise of long-term benefits or distant intangible benefits. We are comfortable with the status-quo. We know it well and it knows us. It’s predictable and we don’t want to mess it up. And even if the status-quo isn’t exactly the best, it’s still “the devil we know.” So we certainly are not going to turn our world upside-down even though we know it may benefit us much later on. We are going to fight those changes for as hard and as long as possible. And even if we have to reluctantly accept it, we won’t really accept it. We’ll scheme and plot ways to subvert it.

When discussing the concept of resistance to change, there are two fantastic non-business examples to illustrate this concept: Stopping smoking and losing weight.

Stopping Smoking

Most smokers know that smoking is unhealthy, expensive and will likely impact how long they live and their quality of life much later on. Despite the irrefutable scientific and medical evidence supporting this, none of that is important right now. Right now the cigarette provides comfort from the everyday stresses in the smoker’s life. For some it also provides extra breaks and perhaps a certain social credibility.

Many smokers have tried to stop but inevitably return to smoking again. Others simply can’t rationalize the future promise of better health if they have to give up what’s comfortable right now. Their response to our ever-increasing smokeless society is either one of resigning to the new realities or angrily protesting them. In this case, the smoker is aware of a long-term PROI, but doesn’t acknowledge a short-term PROI. In fact, the smoker might believe that there is a negative short-term PROI and will therefore increase his resistance to this change.

While there is the emotional consideration with smoking, there is also the physiological consideration. Nicotine is a drug and has addictive qualities to it. In many cases, it takes more than just the will and desire to stop smoking. With smoking cessation programs and related products, as well as other remedies, there are tools to slowly weaken and then break the addiction. Notwithstanding the physiological, the fact remains that mental and emotional resistance is the single biggest barrier to “kicking the habit.”

Losing Weight

Losing weight is another example of making significant changes to the everyday life in return for distant benefits. Food is the ultimate comfort pill. If we are emotional, scared, angry, sad, happy, festive, etc., food helps all. What’s different about eating from smoking is that we must eat to live. We can’t just stop eating altogether without having serious health impacts or simply not living period.

Losing weight is really a subset of being healthy. But to lose weight and maintain the weight loss, one has to undergo at least two radical changes; a change of eating habits and an increase in activity levels. Both of these require commitment to realize and sustain the gains. So in reality, there are two changes necessary to realize the future benefits.

This is why losing weight is so difficult for so many people. This is also what’s made the reality weight loss television shows so popular. We see the hard work and dedication that the participants must give to lose weight and sustain. In some ways, we project ourselves to the show’s competitors but then when it comes to emulating those habits, we stop. “I can’t give up sweetened carbonated beverages.” “I can’t give up fried food or white bread or sugary treats.” “I can’t exercise vigorously once a week let alone twice or three times.” “I don’t have time.”

Every excuse in the book is used in an effort to resist changes that will help. Again, the over-weight person understands that there is a long-term PROI, but refuses to acknowledge a short-term PROI. In fact, this person believes that there is a negative short-term PROI and thus will either fight the change or only half-heartedly engage.

The real strength of PROI is in its immediate benefits. Find the immediate benefits (short-term PROI) and the resistance to change is significantly diminished.

The truth is that there are short-term PROI’s in both of these cases.

What are the short-term PROI’s?

For stopping smoking, there is the immediate money savings, especially with the current trend of increased taxes. There is also the end of smoker’s breath and smoker’s clothing. There is an immediate start to the recovery of the lungs and overall health.

For losing weight, there is the immediate feeling of more energy. People who feel more energetic are better able to do more things. With the reduction of sluggishness, there is also the short term benefit of looking better, which only increases as the pounds are shed. As we feel better, we convey a stronger sense of confidence which strangely enough manifests itself to external appearance. We feel better, therefore, we look better.

With the realization of immediate benefits and a strong support team of family and friends, there should be little resistance to at least attempting these healthy changes. So what are you waiting for?

Author: Moe Glenner

Sleep Studies – Are you fit to drive?

Sleep Studies and HOS Regulations

The provisions that took effect more than a year ago limit the maximum average work week for truck drivers to 70 hours, a decrease from the previous maximum of 82 hours.   Truck drivers who reach the maximum 70 hours of driving within a week must rest for 34 consecutive hours, including at least two periods from 1 a.m. to 5 a.m., which the FMCSA states is a time when “the body clock demands the most sleep.”  Also truck drivers are required to take a 30-minute break during the first eight hours of a shift for a meal/rest break.  The question has been asked, “How did the FMCSA come to the conclusion that these guidelines would help a driver’s ability to be fit to drive”?

A look into the HOS changes and the study conducted by Washington State University Sleep and Performance Research Center shows they performed a “real world, third party study.”   Scientists measured sleep, reaction time, sleepiness and driving performance in the study.  They found that drivers who began the break with one night of rest compared to two exhibited more lapses of attention, greater sleepiness, and increased lane deviation in the morning, afternoon and at night.  The study included 106 drivers, 1,260 days of driving and 400,000-plus miles of driving recorded by the truck-based data acquisition system.

On the flip side, the Owner-Operator Independent Driver’s Association argues what the report doesn’t say may be more significant than what it does say.  In a statement regarding the HOS changes Norita Taylor, media spokesperson for OOIDA said, “The study does not appear to us to be representative of those actually affected by the newer HOS so we are skeptical it can be applied to the larger population within the industry.”

It seems the FMCSA is telling millions of truckers when they are tired, but the study only examined a few of the 100 drivers from three companies.  Another concern is the two consecutive rest breaks are forcing truckers to work in the morning rush hour when roads are most congested and dangerous.  At a recent conference in September of this year the FMCSA stated they had not done any studies since the rule change to see if the rush hour congestion has proven to be more dangerous than before the change.  While it is unlikely the HOS changes will go back to the old guidelines anytime soon, it will be interesting to see how it effects drivers and roadways in the next three to five years.

Author: Nick Reed, General Manager uDrove

4 Ways to Secure Carrier Capacity

Four Ways to Secure Carrier Capacity Using Bid Optimization

Ask any trucking company how their business is going. The response you’ll likely hear is: “Great! Maybe the best it’s ever been, except we can’t find drivers.” The driver shortage, it turns out, is a backhanded sign of prosperity.

The American Trucking Associations recently estimated that the industry could fill 30,000 to 35,000 driving jobs immediately. The shortage has been intensified by a rebounding economy. Freight volumes have exceeded pre-recession levels with the ATA Tonnage Index setting record highs the past two months.

To secure capacity in this very tight market, companies seeking carriers are paying closer attention to bid optimization solutions as a means of aligning interests from both parties. Here are four ways brokers, 3PLs and shippers can use the technology to procure fair and reasonable rates across all modes of transportation, especially from carriers that hold the upper hand.

Customized bidding.

Rather than use a shotgun approach for bidding, companies seeking to secure capacity for their managed freight networks can use bid optimization solutions to analyze their carrier databases. Only the lanes that make sense to each carrier should be presented in a bid package to avoid wasting their time.

For truckload carriers in the freight network, a bid package could be set up to offer lanes the carriers have done in the past and those where they have equipment domiciles. Lanes that are less desirable can be offered up as continuous moves to position their trucks in desired markets.

The top 20 less-than-truckload carriers move about 95 percent of LTL freight in the market. Ideally, the company seeking carriers should blend a mix of LTL carriers with both large and small footprints in a bid package to attain the best cost and service experience.

The shipments offered up for bid should match the locations and type of freight that each carrier is looking for to improve the efficiency of their networks.

Consistent experience.

The cover of a bid package is used to communicate the general requirements of the bid in terms of its duration, seasonality factors, accessorial charges, fuel surcharge agreements, etc. The bid package itself should be structured in a way that makes sense to each business. The online, spreadsheet-style interface that carriers use to enter rates should mirror the same structure they use internally for rating and pricing.

For all parties involved, the user experience should be the same each time. This standard procedure for communication allows the company conducting the bid to complete a package involving 100 carriers nearly as easily as a one that involves 10 carriers.

Transportation centric.

A number of software systems are used to procure bids from suppliers and contractors in various industries, but transportation is a world of its own. Only bid procurement tools that are specifically designed for transportation have the means to capture freight classification codes, tariff discounts and other idiosyncrasies of rates in an accurate and meaningful way.

Instant analysis.

Unless a bid optimization solution is specifically enabled for transportation rating and analysis, it will take tremendous effort after the fact to determine which bid responses are better than others. The instant analysis tools in bid optimization solutions compare the rate responses from truckload, LTL, rail intermodal and other capacity providers to determine which company, or group of companies, offers the best cost experience for each shipment and lane.

 

Bid projects can be a large and intimidating process without the right technology. The greatest benefit of bid optimization solutions is to funnel all of the communications, data and analysis of a very complex process into a single, easy-to-use management system.

With this system at the helm, shippers and logistics providers can find ways to operate more profitably and differentiate themselves in the minds of carriers and with their own customers.

 

Author: John Martin serves as the 3PL Practice Leader for MercuryGate International, Inc.  Prior to joining MercuryGate, John worked for a 3PL that utilized the MercuryGate TMS to improves their efficiencies and grow their business for nearly a decade.   Before finding a career home in the Logistics field, John held Management positions in the Insurance and Software Development Industries.

 

[Tech Talk] Healthy Applications

I am an avid distance runner.  I run when it is hot in the summer, and in the winter when it is below 0.  I will dress based on the weather, but run regardless. I have run like this for 20-plus years.  Many people call me crazy, but I am addicted to how it feels to be at least a little fit and healthy.

When I approach a race there are a number of items I try to manage so I can perform my best.  These are indicative of what it takes to maintain health and fitness.  First, I will alter my training to match what I anticipate the race to be.  Maybe I will add more hill training, or speed work to build appropriate muscle, attitude and skill.  I will try and control my diet as the race approaches.  Although difficult, this helps to ensure I have the correct balance of nutrients, and fuel for the race. It is a bit complicated, but if I plan well, train well, and can control my diet it all comes together for a great race.

I see the health of an application similarly including a lot of elements.  There are a number of hardware pieces. From the server systems hosting the application, to the internet connection, to the client you use to access the application. We constantly monitor performance and availability of our systems to ensure application health. This monitoring allows us to see trends affecting performance, and move to accommodate these.  We also get early warnings when outages occur, and jump to correct these as quickly as possible. A healthy infrastructure is key to application health.

Just like a healthy athlete will work to improve their strength, conditioning, and skill, I see application health including changes and updates to improved usability and speed.  From building new features, to supporting new devices, to fixing the issues we find in the application,  updates and changes are important for an application to perform at its best.

As I will vary my training to match upcoming contests, Truckstop changes our applications to better suit the market.  We hear customers requesting more information and new elements are added to Truckstop. Recent additions include Carrier on-boarding, and Carrier Insurance Verification.  We see market trends pushing to mobile device applications, and are improving Truckstop offerings there.  At Truckstop we listen and are looking for ways to help improve your business.

At Truckstop we take application health very seriously.  We work at the many facets required to ensure our applications are healthy.  Once you have worked with Truckstop applications, used the full gamut of services we offer, and talked with our excellent customer support, you will appreciate how useful these applications can be.  You too will become addicted to Truckstop’s healthy applications.

Author: Chip Olsen, ITS Operations Manager

Allie Knight – FTW

Allie KnightAllie Knight, a driver for USA Truck, was named the People’s Choice winner of the I Heart (Love) Trucking video contest, which was announced at the Great American Trucking Show in Dallas Aug. 21-23.

The I Heart Trucking video contest was put on the Women in Trucking and sponsored by Internet Truckstop® and AllTruckJobs.com.

Knight, who refers to herself as a rookie driver, has been driving for just under a year and is a bundle of energy who loves her job and the ability to experience different places thanks to her driving.  Her two-minute video for the competition was a compilation of several videos segments she put together.  Knight makes a video log of her life in trucking daily and used portions of those for her winning video.

“I got an email that said ‘You need to check out the ihearttrucking.com. They’re doing a competition. … It’s a great idea. I think you’d really like it,” Knight said about entering the competition. “I took videos of clips I had done in the past of my daily driving and put together a little two-minute montage of this is what my life is every day and I love it.”

Knight comes off the same in person as she does on her video.  That, she said, was exactly what she was shooting for in the video.

“What I was trying to do, right from the get-go, was to show exactly what my every day is like,” she said.  “The person you get on the videos is exactly the person you’re going to get when I’m not on camera.”

Knight’s home base is the Boston area, a small town about an hour north of Boston.  That, however, does not restrict her to the New England area.

“I go all over the place,” she said. “I absolutely love it. I’m not going to do anything else.”

As of late August, Knight had been in about three quarters of the lower 48 states and had her sights set on the rest.

“Let’s go out West,” she said. “I have 12 more states to get before I have done all 48.”

To catch up on more of Knight’s travels, check out her YouTube videos at www.allieknight.com.

The Judge’s Choice award went to Guadalupe (Lupe) Potter, who has been driving for Bennett International Group for 26 years.

Potter said she began riding with her husband as a passenger in his truck, but soon became bored with that and went to driving school. At that point, she began driving team with her husband before eventually getting her own truck. She said she likes having her own truck because, “I can do what I want.”

“I started driving because it is a challenging job,” Potter says in her video. “Every day is different.

“The open road: I love that. You go and get to see everything around you.”

Potter says if she had to do anything different she “wouldn’t be doing it because this is what I love.”

An honorable mention award was given to Jan McCarter, who says she and her husband have been married for 20 years and most of their married life has been spent in a truck.

“When people meet us, I want people to know that truck drivers are good people,” McCarter says in her video. “I wouldn’t trade my life for anything. I absolutely love trucking.”

Brent Hutto, chief market officer for Internet Truckstop, said it didn’t take long to figure out sponsoring the I Heart Trucking contest was a good idea. Trucking, he said, offers outstanding opportunities for women and will continue to do so well into the future.

“In the male dominated market of trucking, women can do anything that men can do in this market,” Hutto said.

 

Author: Larry Hurrle, IT Magazine Editor

Information Overload – How truckers can become part of the future

The trucking industry is the lifeblood of the U.S. economy. Nearly 70 percent of all the freight tonnage moved in the U.S. goes on trucks. Without the industry and our truck drivers, the economy would come to a standstill. To move 9.2 billion tons of freight annually requires nearly 3 million heavy-duty Class 8 trucks logging about 132 billion miles and over 3 million truck drivers to operate them. Another 7 million support people work in trucking related jobs.

That being said, the trucking industry is facing a shortage of drivers. Despite the national unemployment rate being over 7 percent, the industry struggles to find enough qualified drivers. The current shortage of roughly 25,000 drivers is due to a multitude of reasons, including regulatory, and the fact that drivers are away from home for a long period of time. The proposed mandate of Electronic Logging Devices is causing a high percentage of current drivers to consider leaving the industry completely.

Some other important trucking data should be up for consideration. It takes more than 37 billion gallons of diesel fuel at a total cost of more than $143 billion to move all of that freight and paying over 47 cents in fuel taxes per gallon, federal and state combined. Between the federal and state tax increase to come this year, the trucking industry alone is looking at an increase in fuel expenses of nearly $8 billion. This tax money is used to repair roads and keep the infrastructure in good shape. Simply – without trucks, America stops.

This data, these facts and statistics are continually being collected for reference or analysis and being used as a basis for intelligent decision making for our country and our individual trucking companies.

On a national level, we can easily see the impact that the trucking industry has on the nation’s economy. It helps us to have a better understanding of how a single new regulation, such as the hours of service change or other recent regulatory or future regulatory events may affect the industry.

As an industry or an individual company we must find ways to reduce costs and increase total revenue. Revenue management is data-driven decision making.

  • It is data that helped us understand that if you’re running 75 mph and slow to 65 mph that equates to a savings of 14 cents per mile or more than $16,000 per year.
  • It is gathered statistics (data) which illustrated that same 10 mph saves about 10 percent in tire life; 10 percent to 20 percent in engine life, and 20 percent in brake life.
  • It was gathered data that showed us how normal idle time can cost as much as $8,000 per year.
  • It is research and data collection that showed us that running your engine fan all of the time costs up to $4,000 per year.

What do you think, is data just a buzzword, or does it improve our understanding of what is required to be profitable? As truckers, we can no longer be the cowboys of the past. We must become a part of the future. But, we must be cautious about becoming data collecting fools. Information overload can be challenging and if we are not careful we can drown in wave after wave of data. By the way, where does good old common sense come into play these days?

Author: Pat Dickard

Proposals

Proposals

I know what you are thinking.  You see a heading like proposals and already your guts are tied in knots, you have broken out in a cold sweat, your thinking is going fuzzy, and it can only mean more work ahead!  Have no fear!  I am not going to be talking about difficult proposals like asking someone out on a date.  I am going to talk about proposals to do business.  We all get them.  They come in various forms, shapes, and sizes and most are unwanted.  I get them all the time in my e-mail.  Frequently they are lonely girls looking for company or wealthy foreigners looking for help to move $7 million out of their country and put it into my bank account.  All they need is my bank routing and account number and then I will see the money!

As a carrier, you get proposals all the time as well.  I frequently hear about proposals such as someone calling you asking if you can haul a load of ice cream from Los Angeles to Miami but all your trailers are open deck trailers, or you drive a van and someone contacts you about hauling a 200,000-pound road grater, or you only haul loads in Texas but someone contacts you to see if you are willing to take a load from Illinois to Alaska.  These may sound like extreme cases but they happen much more frequently than they need to.  As an industry, we need to do a better job of matching up freight-hauling opportunities with carriers, their capacities, and their capabilities.  To help solve these challenges; we have created the Internet Truckstop’s new Request for Proposal (RFP) product.

For our carrier customers, it is the easiest way to find new business that more closely matches what you are looking to haul.  Since deregulation began back in the late 1970s, the problem facing shippers is how to find carrier capacity and how much it will cost to move it.  Large fleets stepped in and put proposals in front of shippers and competed with other large fleets.  These companies didn’t know how to contact small or mid-sized fleets and as a result, small and mid-sized carriers rarely got to bid on freight lanes.  The new ITS RFP product allows all the small and mid-sized fleets the opportunity to start seeing these RFPs and to start bidding on lanes that work for them.

So how does all this work?  An RFP customer of Internet Truckstop will provide us a list of lanes and will give us the criteria of the carriers from whom they are interested in receiving proposals.  Those target carriers can be picked by fleet size, service area, Internet Truckstop CPR rating, trailer types, and more.  The system will then send out an invitation to those fleets via e-mail inviting them and their company to participate in the RFP being put out by the customer.  If you are interested, you simply click the link, place your bids, and await notification of award from the lanes on which you have bid.

Why should you be excited about this?  This is the first time, small and mid-sized carriers have had their service advertised for bid and you can get an invitation because you are an Internet Truckstop customer.  In one of the first RFPs to run through the system, the customer doing the RFP was used to getting about 40 proposals back.  By putting the RFP out to a targeted group of ITS carriers, they were able to get more than 2,000 proposals back which allowed them to increased their core carrier base from 25 to more than 200 core carriers—adding small and mid-sized carriers into their systems.

As a carrier who uses Internet Truckstop, you qualify for this service and it is part of your standard monthly membership fee.  So the next time you get an e-mail from the Internet Truckstop RFP system, open it right up because opportunity awaits!

Author: Scott Moscrip, CEO/Owner Internet Truckstop

Identity Theft: A Growing Concern for the Industry

IDTheft

Identity thieves will focus on and steal the identity of reputable carriers so that the broker will generally have no hesitation giving them the load.

Frauds and Scams

Industry professionals at all levels are reporting fraudulent activities to Internet Truckstop®.  These reports include unauthorized re-brokering of shipments, holding loads hostage and stolen loads, just to name a few. However, the latest trend is the growing number of reports on identity theft which is at an all-time high and of grave concern to those who have been victimized.

Internet Truckstop has published several identity theft related articles over the last few years in an attempt to share the experiences of others and to offer tips on how to reduce the chance of becoming a victim. Many of our readers have expressed their appreciation and have implemented enhanced security measures. Additional precautionary measures take a little extra time but have proven to significantly reduce the vulnerabilities that the identity theft perpetrators lie-in-wait to exploit.

Here is our perspective on the most common ways identify theft scenarios can unfold and who the potential victims are.

How it Starts:

Identity thieves will contact carriers representing themselves as a broker. The identity of the brokerage they are using and representing themselves as has been stolen. They will request a copy of the carrier packet from the carrier, stating that they want to get the carrier set-up and preapproved in their system for the current and any future loads. The identity thieves now have everything they need to begin the process of stealing advances which is their ultimate goal.

The Freight Transaction:

Identity thieves will then contact a legitimate broker and request to book a load using the identity and carrier packet they have acquired from the initial carrier. Identity thieves will focus on and steal the identity of reputable carriers so that the broker will generally have no hesitation giving them the load.

Having acquired the load and bond information from the new broker, identity thieves will then post loads on a load board, representing themselves as the broker they took the load from. This broker has now had their identity stolen as well. A carrier will find this load posted on the load board, and book the load with the identity thieves believing they are a legitimate broker. The loads are usually posted with a very good rate and the promise of an advance as further enticement. The end-carrier will then pick up the load and forward a copy of the bill of lading to the broker being fraudulently represented by the identity thieves.

Next, identity thieves will send the BOL that shows the pickup to the broker they originally booked the load with and request an advance. The broker will issue an advance electronically. The identity thieves will then cash the advance at one or more locations to keep the money request low and avoid suspicion.  They now have the advance which was their entire purpose for this fraudulent activity. At this point general communication by identity thieves will cease to all parties.

We are confident that if everyone works together and takes the needed precautionary measures, we can significantly reduce the risk of becoming victims.

The End Game:

The end-carrier who is actually doing the work by hauling the load will now attempt to make check calls. In doing so, they learn that they are not able to contact the broker they booked the load with. The end-carrier will usually contact the shipper to verify the broker on the shipment. The shipper informs the carrier that they gave the load to a different broker than the one the carrier acquired the load from. The carrier will then contact the originating broker and inform them of his possession of the load and that he will need to be the carrier paid for hauling the load.  The broker has no legally binding contract with the end-carrier that hauled the load and has also paid a generous advance to the identity thieve(s).

Nobody Wins:

So who are all the victims in an identity theft scenario such as this? We submit that all parties are victims of identity thieves. The original carrier and two brokers have had their identity stolen as well as the end-carrier who provided his packet to the identity thief in order to book the load. All these identities were used in the course of wire fraud, which can bring suspicion from the authorities on companies that may be totally innocent. The shipper is also a victim because their shipment is now jeopardized, as is the receiver because many cases result in the end-carrier refusing to deliver the shipment until they are paid.

Clean Up:

At this point all of the victims involved in an identity theft situation such as this need to work together to get the end-carrier that actually moved the freight paid. This can be very hard on the originating broker because they have already paid an advance to the identity thief and paying the end-carrier in full takes away from the brokers’ profitability.

The ultimate victim is the industry as a whole. Incidents like this are increasing across the nation at a very rapid rate and a distraction from the normal flow and movement of freight. It also promotes fear and distrust in the trucking community while interfering with commerce and the speedy and efficient movement of freight.

We are confident that if everyone works together and takes the needed precautionary measures, we can significantly reduce the risk of becoming victims of identity theft.

Author: Sonny Smith – Internet Truckstop Assurance Services Director

 

ASECTT v. FMCSA – A Win, Lose or Draw?

 “It is time for the industry as a whole to put aside parochial interests and send clear and unified messages to Congress that broad legislation is needed.  Until then, ASECTT v. FMCSA must be seen as an important battle in a longer war, the results of which will have broad implications on competition, carrier choice, federalism and preemption.”

On June 17, 2014, the D.C. Court of Appeals issued its decision in ASECTT v. FMCSA.  At issue was whether the FMCSA’s guidance issued in May of 2012 amounted to a new rule directing shippers and brokers to use SMS methodology in credentialing carriers.  Petitioners’ arguments were supported by declarations showing that SMS methodology does not accurately measure carrier safety performance and that the guidance amounted to a new rule requiring shippers and brokers to use SMS methodology to bar from use thousands of carriers which the agency itself has found are fit to operate on the nation’s roadways.

The court ignored the effect the agency’s website publication and on procedural grounds denied petitioners’ relief finding that the agency’s guidance did not amount to a new rule for which relief could be granted. The press largely covered the court’s decision as a loss.  To be sure, the court which was not “astonished” by the agency’s action and missed an excellent opportunity to rein in a clear bureaucratic overreach of the type that has come to characterize the current administration and its agency.

Yet, was the decision a resounding defeat for petitioners as some pundits have concluded?

A close reading of the decision shows that the agency’s defense was based upon the argument, which the court accepted, that the agency did not intend its guidance as a new rule and the agency argued that its website advice and publication of SMS methodology does not change the agency’s duty to determine carrier safety fitness, nor does it trump the settlement in NASTC et al. v. FMCSA to which the agency agreed when suit was filed after the agency announced SMS scores would be made public.

Thus, in finding that the petitioners lacked the basis to sue because the “guidance” did not constitute a new rule, the court may have allayed petitioners’ and the industry’s worst fears.  That is, the agency through website guidance and a highly orchestrated publicity campaign, could abdicate its responsibility for determining carrier fitness, transferring that duty to shippers and brokers under peril of negligent selection liability.

Clearly, ASECTT v. FMCSA was not a resounding victory, but I believe it was not a defeat.

It drew clearly the battle lines between rulemaking and agency advocacy, forcing the Agency into a “rope-a-dope” posture of defending its website publications as having no legal effect in trumping existing regulations or rules.

In the meantime, after it was sued, the agency has buried the complained of “guidance document” and in shuffling its website, largely refrained from further pronouncements which could provide fodder for an activist plaintiff bar intent on using SMS methodology to sue upstream shippers and brokers for negligent selection in every fatality accident.

Hopefully ASECTT v. FMCSA will be seen in the light of history as just a draw – a necessary battle in a longer war.

In the two years it took to litigate this case, the agency’s industry support for SMS methodology has deteriorated.  In December 2013 the ATA publicly reversed its policy and issued a statement condemning the accuracy of SMS methodology.  It has seen the light and urges that scores be removed from public view.  OOIDA has issued a call for the administrator to step down because the website is being used for lobbying, not carrying out the agency’s existing regulatory duties.  The TIA, whose members are the object of “broker busting” classes by plaintiff’s bar have called for legislation to remove SMS methodology as an issue in tort suits.

Finally, the Inspector General and GAO studies of SMS methodology which were commissioned by House committees at the request of ASECTT and others have been completed. These independent studies confirm the mounting criticism of all who have studied SMS methodology.  It is systemically flawed and lacks sufficient data to statistically measure small carriers which make up the vast majority of carriers the FMCSA regulates.

It now seems doubtful that the agency can deliver a safety fitness determination rulemaking involving SMS methodology any time soon.  As a result of building pressure, the battlefront should move from the agency and the court to congressional oversight and regulation reining in the FMCSA.Congress needs to confirm, once and for all, that the Commerce Clause applies.  The sgency’s ultimate safety fitness determination is the sole standard for determining whether a carrier is fit to use.  The sgency’s finding preempts and trumps the effort by plaintiff’s bar to hold the shipping public liable for the negligent acts or omissions of authorized interstate carriers.

It is time for the industry as a whole to put aside parochial interests and send clear and unified messages to Congress that broad legislation is needed.  Until then, ASECTT v. FMCSA must be seen as an important battle in a longer war, the results of which will have broad implications on competition, carrier choice, federalism and preemption.

I can only hope that the cavalry is on the hill.

P.S. — I am happy to report that the surety involved in the costly California interpleader of a $75,000 broker’s bond has dismissed that action to be re-filed in Federal Court where no filing fee for claimants is required.  Also, a coalition of responsible surety and bond beneficiaries will be pressing the FMCSA to implement the simplified procedures envisioned by the act for distributing future bond payments to claimants.

SeatonHenry E. Seaton, Esq., Seaton & Husk, LP
2240 Gallows Road, Vienna, VA 22182
Tel: 703-573-0700 | Fax: 703-573-9786
heseaton@aol.com
transportationlaw.net

Who is on your train?

“Any culture, whether it is one of innovation or anything else, is driven by senior management.”

Train

With all of the industry alphabet groups advocating for our best interests and best practices, we often forget that the best and most effective advocates are with us right now; in other words, the people in our organization. The people in your organization, through their efforts, demeanor and energy level, are (or at least should be) advancing your organization’s best interest. Of course, best interest is also those things that help contribute to the company’s long-term viability; things like sustainable innovation, etc.

In my work helping companies drive innovation and identify innovators, I am frequently astounded at how many organizations fail to identify innovators already on the team and fail to identify innovators when screening new applicants. Either these organizations do not want innovators or they don’t appreciate the importance of continuous, sustainable innovation.

While I do believe that there a select few organizations that truly don’t want innovation and/or innovators on their team (aka the way we do it now, is the way we did it before and the way that we’re going to continue doing it), I refuse to believe that most companies don’t want innovation and the innovators that drive them. So the first theory is out.

The second theory is also suspect. I believe every company wants to find that next great thing, process or idea and fully exploit it in the marketplace. As such, these companies appreciate the value of innovation but yet, still struggle to consistently and sustainably innovate. Nowhere is this more evident than in the old-line industries (i.e. commodities, logistics [especially trucking], etc.).

The failure in innovation execution is not with intent, rather with culture and the train drivers.

How does your organization stand up? Ask yourself and of your company, the following questions:

Does your organization have and robustly support a culture of innovation? Without it, there is no consistency or sustainability to any innovations that happen to occur.

Does it allow for risk when pursuing initiatives? There is no such thing as an initiative without inherent risk. Where does your company “draw-the-line” when it comes to risk management in new and potential initiatives? Are the only initiatives allowed forward, the ones that have been vetted extensively in an effort to drive out all risk?

Does it punish risk takers when their initiatives fail? This is the Achilles heel for most companies. They are willing to allow people to pursue initiatives, but if it fails, so do the risk takers. Instead of learning from the mistakes and proceeding forward, the risk takers are duly punished and flogged (many times publicly) for daring to take the risk. Are these people or those around them likely to take any future risk?

Does it have senior level support? Any culture, whether it is one of innovation or anything else, is driven by senior management. If they are not buying into it, any innovation that happens will be despite the culture and not because of it. In any event, it will not be consistent and likely not sustainable. As an ancillary point, a culture of innovation driven by senior management also recognizes that the innovation is likely to originate from outside the executive suite. As such, they provide the impetus, framework, support and resources for it to germinate and flourish at all levels.

Does it aggressively identify and pursue innovators? The standard interviewing questions and assessments likely do not reliably identify innovators and those with innovative inclination and potential. And simply asking point-blank about a candidate’s innovative ability will either produce an “I want to appear like one” answer or simply not answer the question in a satisfactory way. If your company wants innovators, it all starts with identification and then aggressive pursuit. How does your company identify innovators?

The most effective advocacy results from engagement. The most effective engagement comes from being part of an organization that is constantly and sustainably innovating. If that’s not your company, then you should be asking: Why aren’t we innovating? What do we need to do to get there? Where do we find and how do we identify the innovators already on our team train and outside candidates?

Author:
Moe Glenner provides corporate entrepreneurial workshops and consulting to companies seeking greater innovation with both their processes and products. He can be reached at Moe@MoeGlenner.com and on Twitter: @MoeGlenner.

MoeGlenner