Drew Wilder: Guest Contributor - Transportation regulations, and keeping America’s highways safe.

A note from Bill:

The Shipper Report was created to share hard earned expertise and to provide a platform for different points of view embodied by shippers, asset and non-asset carriers, and logistics companies. Over the coming weeks and months, the shipper report will feature guest contributors in areas where they have expertise that brings value to our industry and to shippers. Contributor’s areas of expertise will range and cover topics such as COIs, insurance, safety, operations, technology, etc., and all guests will be members of the transportation community who dedicate their own time to support and strengthen our industry.

Our first guest contributor is Drew Singleton Wilder , Master of Jurisprudence, University of Washington School of Law. Drew has an extensive CV. To shortlist, Drew is Certified Cargo Claims Acc, completes DOT/FMCSA Suspicious Training for supervisors, and Tractor Trailer Accident Prevention Training Certified for safety managers. He was previously a Cargo Claims Arbitrator, and held a position on the Transportation Arbitration Board, he is occasionally retained by law firms as subject matter expert in transportation.

Currently, Drew is the CEO of Vicarious Liability Risk Management LLC. He has created a proprietary vetting process of COIs and auditing insurance exclusions. VLRM’s clients include primarily freight brokers (3PLs and 4PLs) and trailer leasing companies.

For more details on Drew’s career and qualifications, take a look at his LinkedIn profile here .

This week, using the ‘dispatch office’ as an example, Drew will be discussing the public safety impacts that poor regulatory requirements and insurance gaps are creating. Dispatch offices remain a hot topic as Anne Reinke the President of the TIA has addressed congress last week and Drew is here to provide additional insight from a risk management and compliance perspective.

Drew Wilder: Guest Contributor

Transportation regulations, and keeping America’s highways safe.

A quick history lesson:

The Motor Carrier Act of 1980 deregulated and opened the door to more competition, competitive rates, and better service in trucking.[1] However, deregulation also provided a pathway for people with little to no experience to start a trucking company without supervision and no governmental oversight, as the Federal Motor Carrier Safety Administration (FMCSA) was not established until January 1, 2000.[3] , it was left primarily to the insurance industry to make sure motor carriers regulated themselves in highway safety.

As you can imagine, the insurance industry bore a heavy burden. Between 1979 and 2015, the ten deadliest years in the motor carrier industry were spread between 1979 and 2000. (National Highway Traffic Safety Administration’s) (Fatality Analysis Reporting System) (Insurance Institute for Highway Safety).[5] Year 2000 was the eighth deadliest year on record, and subsequently the year the FMCSA was established.?

What is threatening safety on the roads today?

The motor carrier industry has come a long way, however, the recent decision by the FMCSA regarding freight dispatch services is a perfect example of how new unregulated markets are still emerging and operating under the nose of our current regulations.

As the FMCSA recently decided, freight dispatch services must have, but are still in no way limited to:

1??A written legal contractual relationship with a motor carrier that clearly reflects the motor carrier is appointing the dispatch service as a licensed agent for the motor carrier.

2??The written legal contract specifies the insurance and liability responsibilities of the dispatch service and motor carrier. The dispatch service must also meet all licensing requirements.

Where do the problems lie with this decision? Like the Motor Carrier act of 1980, we’re looking at legislation that still hesitates to clearly define or categorize different transportation entities to stop dispatch offices from brokering (and essentially double brokering in the eyes of most insurance policies) and fails to ask freight dispatchers to meet the same regulations as motor carriers dispatching just the same.

The safety and liability problem? When investigating accidents over the past forty-years, there have been many vehicle fatality accidents involving tractor trailers. When investigated, the root cause of many of these accidents were traced to a dispatcher putting pressure on the driver, or dispatching a driver they knew should not be operating a vehicle at the time of dispatch or driver check in calls.

In reviewing several dispatch service websites, one of the services advertised, is taking on the role of the motor carriers inhouse dispatcher. Depending on the extent of that role and lack of experience that some of these freight dispatch services have, this use of unregulated dispatchers should be of great concern to the Public, FMCSA, Motor Carriers, and Insurers.

Insurance policies are falling through:

Most people understand that insurance underwriters rely on the information provided by the insurance agents and broker when underwriting a policy. If a motor carrier does not disclose a dispatch office and if the contract between the dispatch office and carrier has not been provided to the insurer, coverage issues are almost certain when an accident does occur.

Dispatch offices are not surety bonded and are relying on the motor carriers primary auto liability policy or contingent policy. Contingent commercial auto liability policies are just that, contingent, and only trigger if the primary policy falls short or does not pay at all. However, if a dispatch service brokers a load without the motor carrier knowledge, could possibly lead to coverage issues. Therefore, it is likely that the insurer of the primary and contingent policies would deny coverage. The result is no coverage and no recourse for the parties affected.

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Conclusion:

Motor carriers who contract a freight dispatch service could be setting themselves up to lose their business and everything they’ve worked for if a vehicle accident occurs involving bodily injury or wrongful death. The fact that most dispatch services are operating like a regulated broker or motor carrier is expanding the risk and liability to the shipper. Worse, it is adding to an unsafe environment on our roadways and ultimately impacting the public. It’s time to increase regulations surrounding dispatch offices or prohibit them until the capacity to regulate them exists and they can operate safely.

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Drew Singleton Wilder

Vicarious Liability Risk Mgt. LLC

https://www.dhirubhai.net/feed/

Thank you for reading our first guest contribution, and a big thank you to Drew Wilder for his insight and expertise! We will see you for another article soon.

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[1] https://www.gao.gov/products/122840#:~:text=The%20act%20substantially%20reduced%20Government,greater%20price%20competition%20among%20carriers.

[3] https://www.fmcsa.dot.gov/mission/about-us#:~:text=The%20Federal%20Motor%20Carrier%20Safety,Act%20of%201999%20(49%20U.S.C.

[5] National Highway Traffic Safety Administration’s Fatality Analysis Reporting System, Insurance Institute for Highway Safety, ?