Changes in Hours of Service For Truck Drivers/ CSA 2010 ramifications

The FMCSA has been busy this month. The new proposed hours of service rules have now been released. There is not much that was changed. While the hours have been reduced to 13 hours, a driver can now take a one hour rest and then continue to complete 14 hours of service. The 34 hour restart rule also applies, provided that there are 2 rest periods – from midnight to 6 a.m. A restart will only be allowed once in a seven day period. The proposed regulations will not be open for public comment curiously.

It will be interesting to see how CSA 2010 grades hours of service non-compliance and what insurance carriers do about it.

It is early days with CSA where in the first days the system had 22,000(!) hits in one hour. Nobody knows what percentage of truckers are getting alerts for failing BASIC scores.

Happy New Year to all!

What Shippers and Brokers Need to Know to Manage Their Liability Exposure and The Effects of CSA 2010

I watched a fantastic webinar put on by American Shipper in November that pointed to ( although they did not specifically mention) two presently underinsured or uninsured exposures- broker liability and contingent auto liability and why coverage is needed today. ( As in right now!)

Both coverages are not understood and frankly not part of the mainstream trucking insurance marketplace. With the current economy, many truck sales professionals are setting up brokerage authority or expanding brokerage sales-as trucking capacity is still tight in many areas. Even today's truckers, who are at an all-time high with respect to operating efficiencies, have found they do not either have the equipment or drivers to keep up with their shippers' needs or demands- and that is poor business. So they are setting up and expanding their brokerage operations both within and autonomous to their existing operating authority.

CSA 2010 will make capacity even tighter as crappy trucking operations and crappy drivers will not have long to fix it. And that spells bad news to the brokerage community- who even with best practices will find their operations exposed.

Some information I learned from the webinar corroborates the need for coverage. The Transportation Intermediaries Association understands that brokers need and will be required to have broker liability ( primary coverage) or contingent auto coverage ( secondary coverage). Why?

Truckers who continue to hire or retain unfit drivers will face litigation for negligent hiring and retention. Note a now famous court decision against the nation's largest brokerage operation C. H. Robinson further necessitates the need for coverage ( the Schramm decision).

Attorney Clay Porter, a true pro in the truck broker/ insurance arena has described the truck liability "vortex" well where there is a constant duty to supervise and retain records amongst other things from a best practices context.

Broker/ Shipper Liability can today be summarized by 6 exposures

* Respondeat Superior- the employer ( the truck broker) is responsible for the employee( the carrier). Even though the broker in all cases acts as an independent contractor, the courts are becoming sensitive to this bringing vicarious liability whereby one party is responsible for the actions of others
* Negligent Entrustment- causing injury due to instrumentality( a poor driver operating a extra heavy tractor)
* Claims under the Motor Carrier Act
* Claims that a Broker acted as a Motor Carrier
* Aiding and Abetting
* Negligent Hiring

While I want to emphasize I am no lawyer, it is pretty clear to me the biggest exposure to a broker is negligent hiring- and that a best practices approach needs to be delivered to the truck brokerage community- along with appropriate insurance ( yes we provide same so this may seem a tad self-serving which is not my intention).

Federal laws also necessitate coverage. Which ones?

+49 USC 14704- Rights and Remedies of Persons injured by carriers or brokers- Both the carrier or broker is liable for damages sustained by a person as an act or omission of that carrier or broker in violation of this part


+49 CFR 387.307- Broker surety bond or trust fund- the broker is liable to payments to shippers or motor carriers if the broker fails to carry out its contracts or agreements for supplying of transportation by authorized motor carriers.

Shippers are going to make their brokers have insurance. Attorney Porter says that the indemnity agreements that brokers and truckers are being forced to sign do not hold up in 23 states, meaning shippers will require insurance, waivers of subrogation, and additional insured requirements across the board.

One of the failures of the industry is that there is a fine line between liability exposure either on a primary or contingent basis versus a professional liability exposure ( yes we insure that too). Clearly its early days from a professional liability perspective and few shippers are requiring same of their brokers and virtually none of their truckers. You will see those products as well.


While I have not commented much about CSA 2010, suffice it to say that these factors in a large loss or claim will have impact on the broker that hired them:

^Unsafe Driving
^Fatigued Driving
^Poor Driver Fitness
^Drug and Alcohol Use
^Poor Vehicle Maintenance
^Cargo Securement
^Higher than Average Crash Indicator

These are primarilly no brainers for a plaintiff's attorney to go to war against a trucker or broker but the crash indicator of a trucker is not something available to the broker or general public as I understand it at this stage in time.

You can bet the truck insurance agents will be hit with insurance requests, waiver of subrogation requests, hold harmless contracts, and additional insured requests. And today, no one knows what to do with the exposure when there is more than one broker involved in the transaction.

Keep in touch on this and Happy Holidays.

Ben

Latest Trends in Trucking Loss Control Recommendations

The one consistency in trucking insurance is that change is an integral part of the game. If you cannot change or do not want to change, you will find that the status quo is the same as a trucker putting on the brakes. You have to be moving - and stay current to what is going on in the industry. Otherwise you become irrelevant and most importantly fail to add the value that differentiates you from the masses.

I thought it made sense to address very briefly what we are seeing from insurance companies writing trucking insurance from a loss control perspective. Here is what we see:

• Acknowledgement by trucking management that CSA 2010 has been reviewed and understood
• Within CSA 2010, insurance companies want to make sure CSA 2010 has been presented to drivers and that everyone understands the implications of a drivers safety record within the driver safety measurement system
• No texting policy and the acknowledgement that it is a disqualifying expense. They will want to see this put in the drivers manual
• Defensive driver training and programs must be implemented

While there are other trends in loss control, these are what we see in most loss control reports.

If you are not familiar with what these issues are about, it makes sense to get familiar with them.

A Trucker's Need for Best Practices- Quickly

While everyone is trying to get their arms around the ramifications of CSA 2010, new information is out that points to the need for truckers to fix themselves, rather than be made to do it.

New information compiled from industry giant Lexis says that half( yes that is 50%) of driver qualification files are incomplete- or wrong. Since most insurance carriers, truckers, and truck brokers are worried about vicarious liability that goes with such terms as negligent hiring and negligent entrustment, truckers would do well to invest and fix it now. Insurance agents should work with their insurance carriers to make a trucker look better- now. Without it, the potential for liability is unfortunately at an all time high.

Here is the article in the Journal of Commerce and the Transportation Intermediaries Association.

"The LexisNexis Commercial Driver Safety Report 2010 has revealed that up to 50 percent of commercial driver qualification files, required by the U.S. Department of Transportation (DOT) are incomplete or inaccurate. The report showed numerous instances of incomplete or inaccurate information being used by organizations to screen and qualify drivers, highlighting significant and troubling gaps in compliance and safety programs. Another troubling finding is that commercial drivers are increasingly testing positive for use of PCP, Marijuana, amphetamines and opiates since 2008.

The LexisNexis Commercial Driver Safety Report 2010 is designed to help commercial transportation fleet owners and managers address initiatives, such as the Federal Motor Carrier Safety Administration’s (FMCSA) Comprehensive Safety Analysis 2010 (CSA 2010), by highlighting the areas where existing driver safety and screening programs may be inadequate. The study also found that:

• In files that are compromised by missing documentation, driver licenses are missing 85 percent of the time.

• While use of most illegal substances appears to be on the rise, positive tests for cocaine use decreased 41 percent since 2008.

• Close to 50 percent of the driver motor vehicle reports analyzed by LexisNexis include an adverse motor vehicle history, such as a driving violation or suspended license. "

CSA 2010 - Work In Progress

There are a few things about CSA 2010 that you already know about and other things you may not know. When dealing with your insureds or insurance companies, it might help to be able to discuss the following:

1) What you should already know

On August 16, 2010, the FMCSA updated the Data Preview website to allow carriers to view an assessment of where they stand in each BASIC category based on roadside and investigative findings. The seven BASICS are:
-Unsafe Driving
-Fatigued Driving (hours of service)
-Driver Fitness
-Controlled Substances/Alcohol
-Vehicle Maintenance
-Cargo-Related
-Crash Indicator.

SafeStat’s Safety Evaluation Areas (SEAs) will be replaced
by the BASICS in December, 2010. This early assessment indicator will allow motor carriers an opportunity to understand and address their safety concerns right away.

What you probably do not know:

● Carriers will not inherit the past violations of a newly hired driver.
● All crashes and inspections that occur to a commercial driver while under the authority of a carrier will remain part of that carrier’s Safety Management Data for two years, even if the carrier terminates the driver.
● Tickets or warnings received by commercial drivers while operating their personal vehicles do not count in the Safety Measurement System.
● Carriers and commercial drivers do not need to register for the CSA 2010, nor is there a training requirement.

However, it is in their best interest to be aware of this program and its implications.

Truckers are going to be asking you if the insurance company can help with compliance. We will see what insurance companies can or cannot help in the process

Good Numbers- Truck Related Fatalities & Transportation Activity

In the face of higher average medical costs per claim is the fact that fatalities are now at a record low. What would be interesting and I do not have is to see the actual truck related deaths per mile ( interesting may be the wrong word). My hunch is that not only are fatalities lower but the overall fatalities per mile are down.
It will be interesting to see how truck insurers look at this as you would hear out of every one of them that severity is up. See the attached article below ( courtesy of Transport Topics)

The number of people killed in large-truck crashes dropped 20% in 2009 to the lowest level on record, the National Highway Traffic Safety Administration said Thursday.

Total fatalities fell to 3,380, from 4,245 in 2008, NHTSA said. The total includes truck occupants, occupants of other vehicles and people who were not in vehicles, such as pedestrians.

The figure is the lowest since records began in 1975. Large truck occupants saw the largest decrease in fatalities among all groups tracked by NHTSA, falling 26%.

Fatalities have declined by 2,000 since the Federal Motor Carrier Safety Administration was created in 1999.

They have dropped by 1,855 since 2004, when the current hours-of-service regulations were put into effect by FMCSA.

Both NHTSA and FMCSA are agencies of the U.S. Department of Transportation.

The numbers reported Thursday do not take into account total mileage among trucks, a figure DOT has not yet announced for 2009.

Other good news came from the Federal Reserve. ( Again courtesy of Transport Topics)

The number of people killed in large-truck crashes dropped 20% in 2009 to the lowest level on record, the National Highway Traffic Safety Administration said Thursday.

Total fatalities fell to 3,380, from 4,245 in 2008, NHTSA said. The total includes truck occupants, occupants of other vehicles and people who were not in vehicles, such as pedestrians.

The figure is the lowest since records began in 1975. Large truck occupants saw the largest decrease in fatalities among all groups tracked by NHTSA, falling 26%.

Fatalities have declined by 2,000 since the Federal Motor Carrier Safety Administration was created in 1999.

They have dropped by 1,855 since 2004, when the current hours-of-service regulations were put into effect by FMCSA.

Both NHTSA and FMCSA are agencies of the U.S. Department of Transportation.

The numbers reported Thursday do not take into account total mileage among trucks, a figure DOT has not yet announced for 2009.

Why Commercial ( and Personal) Auto Insurance Is Priced the Way It Is

Do you ever feel funny about how high the premiums are for commercial auto insurance? I would tell you to stop feeling that way based on the article I found in the Insurance Journal. What is interesting to me is that most underwriters are not aware of the medical costs associated with crashes- and obviously that is a factor in both claims and premiums. Certainly the general public is not aware of this and they should be. See the article below.

Motor Vehicle Crash Injuries Costing $99 Billion a Year, or $500 per Driver
August 27, 2010


In a one-year period, the cost of medical care and productivity losses associated with injuries from motor vehicle crashes exceeded $99 billion – with the cost of direct medical care accounting for $17 billion.

A new study by the Centers for Disease Control and Prevention says the total annual cost amounts to nearly $500 for each licensed driver in the U.S.

The study in the journal Traffic Injury Prevention found that the one-year costs of fatal and non-fatal crash-related injuries totaled $70 billion (71 percent of total costs) for people riding in motor vehicles, such as cars and light trucks, $12 billion for motorcyclists, $10 billion for pedestrians, and $5 billion for bicyclists.

CDC researchers said they used 2005 data because, at the study time, it provided the most current source of national fatal and non-fatal injury and cost data from multiple sources.

The data is for injuries only and does not include costs of vehicle or property damage.

"Every 10 seconds, someone in the United States is treated in an emergency department for crash-related injuries, and nearly 40,000 people die from these injuries each year. This study highlights the magnitude of the problem of crash-related injuries from a cost perspective, and the numbers are staggering," said Dr. Grant Baldwin, director of CDC's Division of Unintentional Injury Prevention, National Center for Injury Prevention and Control.

The study also found:

Costs related to fatal motor vehicle-related injuries totaled $58 billion. The cost of non-fatal injuries resulting in hospitalization amounted to $28 billion, and the cost of injuries to people treated in emergency departments and released was $14 billion.
More men were killed (70 percent) and injured (52 percent) in motor vehicle crashes than women. Injuries and deaths among men represented 74 percent ($74 billion) of all costs.
Teens and young adults made up 28 percent of all fatal and nonfatal motor vehicle injuries and 31 percent of the costs ($31 billion). These young people represented only 14 percent of the U.S. population.
Motorcyclists made up 6 percent of all fatalities and injuries but 12 percent of the costs, likely due to the severity of their injuries. Pedestrians, who have no protection when they are hit by vehicles and are also often severely injured, made up 5 percent of all injuries but 10 percent of total costs.
CDC's Injury Center supports strategies for prevention such as graduated driver licenses, child safety seats, primary seat belt laws, enhanced seat belt enforcement, motorcycle and bicycle helmet laws and sobriety checkpoints.

Pretty interesting is it not?

Technologies That Will Help Trucking

I think the Insurance Journal does a very nice job. While the editor, Andrew Simpson, was probably considering private passenger vehicles and consumer interest, I see his article discussing available technologies helping trucking in the future. This may pique your interest. Also think about the in-the-pallet technology already available to prevent cargo theft. The game is changing due to technology...

Technology-- cell phones and texting technologies to be precise--gets a bad rap when it comes to safety while driving. Of course, it’s not the technology that’s unsafe it’s people. Thus a number of states and the federal government have moved to
curtail drivers from dialing or texting while driving. While trying to stamp out unsafe use of technology, it’s important to keep in mind that technology can be used to make driving safer, too. Some of the exciting technologies available include:

Blind Spot and Cross-Traffic Detection: Blind spot detection features identify
people, other vehicles, or objects within vehicles’ blind spots and provide an instant warning. Similarly, cross-traffic detection systems detect vehicles, people or objects in a vehicle’s path while backing out of a parking space and alert the driver.

Driver Recognition System: This allows multiple drivers to program various vehicle
settings including seat positions, mirror positions, and climate control and stereo
settings that can all be activated when the driver enters the vehicle.

Night Vision System: This provides a high-beam image of the road ahead, without
distracting other drivers, using an infrared light beam that is invisible to the human eye. An on-board camera is used to capture images up to 500 feet away that are then presented on a display in the vehicle’s cockpit.

Parking Assist System: Parking assist systems help drivers park backwards or
parallel park using a built-in computer and small sensorslocated at the rear of the vehicle. The parking movements can be done automatically by the vehicle.

As promising and exciting as these technologies are,car makers have to make them available and people have to know about them in order for their safety benefits on the road to be realized. According to a new Harris Interactive survey, not many people know about them. Familiarity with advanced vehicle intelligent sensing features is very low among American drivers, with fewer than one in 10 indicating they are very familiar with the features.

However, despite low familiarity, more and more drivers indicate they are likely
to purchase these features for their next new vehicle, according to the same Harris
Interactive poll. Though only six percent indicate they are extremely or very familiar with blind spot and cross-traffic detection systems, there is obvious interest in these features, with one-quarter (24 percent) of drivers saying they would be extremely or very likely to purchase this for their next vehicle. The same percentage would consider buying a night vision system. Twenty-two percent said they would be interested in buying a driver recognition system.

“Although these technologies are not well known today, expect many of them to
become commonplace over the next few years,” says Dave Pulaski, vice president of
Automotive and Transportation for Harris Interactive. “Once consumers learn about
these features and their benefits, they will clamor
for them.”

All of this suggests that if automakers and suppliers educated consumers more about these technologies, interest may increase. Perhaps some cell phone calls and texting messages from the insurance industry offering discounts would provide
some encouragement for everyone.

Changes in the FMCSA Safety Management System ( SMS)

( from an article in the TIA Logistics Weekly that shows what is changing due to CSA 2010- everyone working with the trucking industry needs to be clued in)

The Federal Motor Carrier Safety Administration (FMCSA) has announced recent updates to the Safety Measurement System.

The Data Preview assessments will be based on an improved SMS methodology. As a result of input from enforcement personnel, industry representatives, and safety experts, as well as findings from an extensive, 30-month field test, FMCSA is implementing several updates to the SMS that will make it more effective in identifying high risk and other carriers with safety compliance problems. Specifically:

The measure of exposure will be changed from Power Units (PUs) only to a combination of PUs and Vehicle Miles Traveled (VMT) in the Unsafe Driving as part of Behavior Analysis and Safety Improvement Categories (BASIC) and Crash Indicator. In addition, these two BASICs will change from using PUs as a safety event grouping (formerly referred to as peer grouping) to using the number of crashes for the Crash Indicator and the number of inspections with a violation for the Unsafe Driving BASIC.

The measure of exposure will change from PUs to the number of relevant inspections in the Controlled Substances/Alcohol BASIC; Severity weights for some roadside inspection violations will be updated; and FMCSA will employ a more strategic approach to addressing motor carriers with a history of size and weight violations rather than counting these violations in the Cargo-Related BASIC; the new approach will include alerts to roadside inspectors when carriers have a history of size and weight violations.

These enhancements will allow the Agency to more effectively identify motor carriers with safety performance and compliance problems.

Out of Service Data- Summer 2010- Only 4.4% of drivers OOS/ Vehicles 20% OOS

From Transport Topics comes some interesting data. The bottom line is that truckers are getting more in touch with the regulation that surrounds them and getting more compliant.


Only 4.4% of drivers stopped for inspections in this year’s Roadcheck event held last month were placed out service — the same percentage as last year when driver compliance hit an all-time high for the annual safety inspection event held across North America.

Results from the June 8-10 event sponsored by the Commercial Vehicle Safety Alliance show that the commercial motor vehicle industry hovering close to the record low out-of-service rates set during 2009.

Figures show the overall vehicle compliance rate at 80%, down slightly from 80.4% last year, with an overall driver compliance rate of 95.6%, which is unchanged from last year, according to American Trucking Associations.

“This year’s Roadcheck results provide further evidence of the trucking industry’s steadfast commitment to safety,” said American Trucking Associations President Bill Graves.

In the hazmat driver category, 2.5% of the drivers stopped were placed out of service, down from 3% in 2009. Because of inspector layoffs due to the poor economy, the number of inspections conducted this year, 65,327, was down 10% from last year.

The results showed that despite the recession’s impact on both trucking and commercial vehicle safety inspectors at the local government level, safety benchmarks are holding, said Stephen Keppler, CVSA’s interim executive director.

Other Roadcheck sponsors were the Federal Motor Carrier Safety Administration, Transport Canada, the Canadian Council of Motor Transport Administrators and Mexico’s Secretariat of Communications and Transportation.

FMCSA News- BMC-32 and Broker Bonds

Some recent news peaked my interest that will affect the transportation insurance industry and change some things. (Courtesy of our friends at CAB).

DEMISE OF THE BMC-32 ENDORSEMENT - To the surprise of many in the insurance and transportation industry the FMCSA has decided to do away with mandatory financial responsibility for cargo insurance for many carriers - the BMC-32 endorsement is going away. The FMCSA has issued its final rule, effective March, 2011, that certain motor carriers operating in interstate commerce will no longer be required to have an endorsement in place in order to operate. The shipping industry was directed by the FMCSA to protect itself by insuring that the carriers with whom they did business are adequately insured. Household goods carriers and household good freight forwarders will continue to be subject to the filing requirement. It is currently unknown what effect the existing filings will have, and whether insurers will be required to cancel all filings and remove the endorsement from existing policies.

BROKER LEGISLATION - This month the Motor Carrier Protection Act was introduced in the Senate. The Act is designed to change the requirements for brokers operating in interstate commerce. The proposed legislation will increase the broker bond from $10,000 to $100,000, impose stricter requirements for entities seeking broker or forwarder authority and increase penalties for violations of broker regulations

This author's take is that there will be more insurance capacity attacking motor truck cargo coverage and that financial underwriting will be looser- due to the lack of repercussions that the insurance filing had. Also, the barrier for entry and continuation as a truck broker has been raised so that smaller operations will have a much tougher time getting bonded and maintaining compliance.

What type of situations occur where a broker bond would come in play? A bond for the truck broker provides confirmation that an insured has the financial reserves to meet its payment obligations and handle unexpected financial demands from a risk incident such as a significant shipper non-payment, liability for an error and omission by an employee, liability for actions by a carrier.

How are Truck Brokers Going to Access CSA 2010 Information?

At GTU, we are one of the largest writers of truck brokerage operations in the country. It is a misunderstood class of business. We are working with the trade association the Transportation Intermediaries Association to encourage best practices on behalf of their constituency. Part of our mutual challenge in this marketplace is to prove our value. We do that by offering risk management assistance, best practices that minimize risk, and offer insurance policies to cover that risk as well as we can.

While the jury is out on how the data from CSA 2010 is going to be employed, I found the article written by Rip Watson in Transport Topics to be enlightening.

Brokers Seek Fleet Safety Data to Evaluate Carrier Suitability

The federal government’s evolving Comprehensive Safety Analysis 2010 program is creating headaches for freight brokers who are trying to protect themselves from potential legal liability by picking safe motor carriers, according to industry officials.

The situation is unfolding as the Federal Motor Carrier Safety Administration makes the transition from the existing SafeStat system, which covers trucking safety compliance, to the more comprehensive CSA 2010 evaluation that begins Nov. 30.

Last month, FMCSA gave carriers their first chance to see safety performance data under the new scoring, which uses seven Behavior Analysis and Safety Improvement Categories, or BASICs. The new approach delivers at least twice as much data as SafeStat, enabling FMCSA to evaluate carrier safety better.

But there’s a catch: Only carriers can see those scores. As of now, brokers and others are barred from viewing any of the new safety data.

“We have raised the driver information issue with FMCSA and have been told that the information is private and to be used by the carrier, not for safety purposes in hiring a carrier,” said Robert Voltmann, president of the Transportation Intermediaries Association, the trade group that represents brokers.

“When we see the inevitable injury accident, we’ll have to see what attorneys and judges do with the CSA 2010 information,” Voltmann said.

The underlying problem is that brokers and shippers with deeper pockets than small carriers have been found negligent in several court cases, such as Schramm vs. Foster, a 2004 case in which a broker was found negligent for hiring a carrier that caused a severe crash.

“If a carrier is operating with a [Department of Transportation] license, on the one hand, I’d love to know I’m using safer carriers and be able to view safety data,” said Jeff Tucker, president of Tucker Company Worldwide brokerage, Cherry Hill, N.J.

On the other hand, Tucker added, he’s “on the fence” about whether he wants to know safety information if a plaintiff can use that information to convince a jury the broker is negligent and responsible for a highway accident.

What brokers don’t know could hurt them, a transport attorney said.

Brokers that fail to obtain carriers’ CSA 2010 scores could be exposed to suits claiming the broker should have known that data, said Tamara Goorevitz, a Baltimore attorney who specializes in representing brokers.

“What is the alternative when people ask ‘Did you even look into this?’ ” she asked. “Due diligence in my mind is to get that current score.”

Goorevitz warned that brokers must be more diligent under CSA 2010 even if they can get access to the data because the scores change monthly, while SafeStat ratings might not have changed for years.

Still another worry is that carriers rated “satisfactory” today will find that because their CSA 2010 score includes new data such as traffic violations, their rating could suffer, Tucker said.

In fact, one industry supplier, Vigillo LLC, which calculates CSA 2010 scores for its clients, found that 68% of the more than 1,500 carriers using its service had at least one BASIC score that would trigger FMCSA intervention.

David Schrader, who is senior vice president of load-board operator TransCore, said the high percentage of carriers with at least one deficient BASIC score will force brokers to decide how much risk tolerance they have.

“Brokers also will have to depend on carriers to make prudent business decisions,” Schrader said, and try to obtain CSA 2010 scores from carriers before they move a load.

FMCSA is encouraging fleets to obtain CSA score information and take appropriate follow-up action if needed.

“We strongly encourage every carrier to seize this opportunity to review their CSA 2010 data profile — and more importantly, to immediately address any deficiencies that may be revealed,” agency spokesman Duane DeBruyne said.

As of May 21, a total of 8,751 carriers had reviewed their safety data, DeBruyne said. The agency’s latest data show approximately 650,000 active trucking companies.

Other brokers are reaching out for solutions as well.

“We are taking this opportunity to reach out to our carriers and discuss CSA 2010 in general, as well as their specific rating, in order to learn more about them and how we can better work with them,” said Kerry Byrne, executive vice president of Total Quality Logistics.

“We’re also currently looking at third-party sources that may be able to provide additional data,” Byrne said. “We won’t make any final decisions on internal changes until we are confident that we have seen the final version of the regulations and determined the practical application of them.”

“We are currently in the pro-cess of determining what C.H. Robinson’s [carrier selection] criteria will be,” said Mark Walker, the broker’s senior vice president, transportation.

“Since all carriers will receive a rating in the new system, we anticipate that carriers currently in the ‘unrated’ pool will need to be especially aware of how CSA 2010 may impact them,” Walker said.

The “unrated” pool is a reference to carriers that don’t have a SafeStat rating.

“Responsible risk managers for brokers and shippers want to see compliance with the regulations and improvement in scores and ratings,” Tucker said.

LOC's As Premium Collateral; It's Better Than A Cash Deposit

Rob Mosely in concert with Big Truck TV looks at escrow deposits that inhibit a trucker financially. Whether a deposit is an escrow or a working deposit, the bottom line is that it needs to be explained. What Rob's article could have added is that collateral not only protects against bankruptcy, it also protects and agent and insurance company by averting the loss or earned premium- which has been uncollected in the cancellation request. See his article below:

"Protecting a Truck Insurer from an Insured’s Potential Bankruptcy: Letter of Credit as Collateral

Too often in today's economy, insurers are getting the short-end of the stick when the motor carriers they insure file bankruptcy. By the time the insured files bankruptcy - or possibly even before any financial problems arise - it is generally too late to protect your company from the effects of the insured's bankruptcy. Therefore, safeguards must be put in place beforehand in order to insulate an insurer from bankruptcy's often harsh consequences, including harmful effects on an insurer's collateral.

Truck insurers, especially those involved with "fronting policies," captives, or high dollar deductibles necessarily insist on collateral to secure the insured's obligations. This collateral can be found in several forms, including equipment, cash, or a letter of credit. A recent opinion issued in S-Tran Holdings, Inc. v. Protective Ins. Co., Delaware Bankruptcy Court, Adversary No. 07-51341, 2009 WL 3185771 (Del. 2009), suggests that one potential safeguard against bankruptcy is to require a standby letter of credit as collateral from the insured.

What is a standby letter of credit?

A standby letter of credit is essentially a guarantee of payment by the shipper's bank. Insurer's customer, Motor Carrier, must go to its bank and apply for a standby letter of credit. Upon approval of Motor Carrier's application, Motor Carrier's bank then sends the letter of credit to Insurer as collateral for Motor Carrier's obligations under the insurance policy. Upon the occurrence of a default of Motor Carrier, Insurer may contact Motor Carrier's bank to "draw down" on the letter of credit for cash.

Why is a letter of credit better than any other collateral?

Motor Carriers might prefer to put up cash, equipment, or other property as collateral. However, from the Insurer's perspective, a letter of credit might be preferred because it lacks all of the issues associated with liquidation of equipment (e.g. valuation, finding a buyer, etc.); a letter of credit is much more easily convertible to cash than would be equipment or other tangible property. Of course, if liquidity is the primary concern, why not have Motor Carrier simply put up a cash deposit as collateral? S-Tran Holdings demonstrates why.

In S-Tran Holdings, the bankrupt debtors were related entities, S-Tran Holdings, Service Transport, Inc., and Dixie Trucking Company, Inc. (collectively "Service Transport"), which were primarily motor carriers. Prior to the bankruptcy, as a condition for issuing various insurance policies, Service Transport's insurance company had required it to put up two forms of collateral: (i) a cash deposit and (ii) a letter of credit. When Service Transport allegedly defaulted under the agreements, the insurance company drew on the letter of credit and held the proceeds. Once the bankruptcy was filed, Service Transport sued the insurance company for turnover of the proceeds of the letter of credit, as well as breach of contract. The turnover claim, in other words, meant that Service Transport wanted to require the insurance company to give the letter of credit proceeds back to the bankruptcy estate so that a determination could be made as to how the letter of credit proceeds should be distributed. The Court held, in part, in favor of the insurance company, determining that the letter of credit and the proceeds therefrom are not part of the bankruptcy estate. On the other hand, the cash deposit was part of the bankruptcy estate, and therefore, subject to turnover.

How does all of this apply to you as a Truck Insurer?

In the example laid out above, if Motor Carrier is in bankruptcy and disputes monies owed to Insurer under the policy, then depending on the collateral, Motor Carrier (or its trustee) may have a right to control the collateral (i.e. the "stake') during the litigation. If the collateral is cash, equipment, or other types of property, then Motor Carrier (or its trustee) will likely control the stake throughout the course of the litigation. However, if the collateral is proceeds from a letter of credit, then such proceeds are not property of the estate, and Insurer would likely have the right to hold the stake during the course of litigation. As an example, the S-Tran Holdings adversary case has been ongoing for over two and a half (2½) years, and is still ongoing. The party that is entitled to hold the stake throughout such a period would certainly have an advantage.

Therefore, if you are an insurer determining what you will require as collateral in order to issue a policy, consider a letter of credit rather than cash or other collateral. If the insured later files bankruptcy, you just might be glad that you did."

CSA 2010 Rollout- When it all will happen

From Jason Stevenson at the Hoffman Group

It will be important for those in transportation insurance to know what CSA 2010 is ( previously explained) and when it will roll out. That does not mean the schedule won't be revised again.

• April 12 – November 30, 2010 – Motor carriers can preview their own data by seeing their roadside inspections/violations and crash events organized by Behavior Analysis and Safety Improvement Category (BASIC).
• Summer 2010
o June 30th – The Operational Model (Op-Model) Test will end.
o July – The four “50/50” Op-Model Test states, Colorado, Georgia, Missouri and New Jersey, will join the five 100% Op-Model Test states in implementing the program.
o August – Motor carriers will be able to see an assessment of their violations based on the new Carrier Safety Measurement System (CSMS) which will replace SafeStat later in 2010.
• Fall/Winter 2010
o SafeStat will be replaced by the CSMS. CSMS will be available to the public, including shippers and insurance companies.
o FMCSA/States will prioritize enforcement using the CSMS.
o FMCSA will begin to issue Warning Letters to carriers with deficient BASICs.
o Roadside inspectors will use the CSMS results to identify carriers for inspection.
• Winter 2010 - Safety Fitness Determination Notice of Proposed Rulemaking (NPRM) is scheduled to be released.
• 2011 – Enforcement staff will be trained, and new interventions will be implemented State-by-State

I am working to understand all the acronyms myself. But I thought you should stay abreast of the situation.

Pre-Employment Screening Program Quietly Launched

Think insurance companies will have an interest in this? You bet. Read why below:

FMCSA Launches Pre-Employment Screening Program
WASHINGTON, DC -- The U.S. Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) today launched its Pre-Employment Screening Program (PSP), which allows commercial motor carrier companies to electronically access driver inspection and crash records as a part of the hiring process.

"Safety is our highest priority. The Pre-Employment Screening Program sends a strong message to commercial carriers and drivers that we are serious about having the safest drivers behind the wheel of large trucks and buses," said Transportation Secretary Ray LaHood.

"Starting today, commercial carriers will have an essential tool for making informed hiring decisions that will lead to safer drivers on our roads," said FMCSA Administrator Anne S. Ferro. "The Pre-Employment Screening Program raises the safety bar for the motor carrier industry and helps to make our roads safer for everyone."

The Pre-Employment Screening Program offers access to up to five years of driver crash data and three years of inspection data regardless of the state or jurisdiction. By using driver safety information during pre-employment screening, commercial carriers will be able to better assess the potential safety risks of prospective driver-employees. PSP also gives drivers additional opportunities to verify the data in their driving history and correct any discrepancies. A driver's records will be protected in accordance with federal privacy laws.

The Pre-Employment Screening Program is populated monthly by FMCSA's Motor Carrier Management Information System (MCMIS). The MCMIS is comprised of driver performance data including inspection and compliance review results, enforcement data, state-reported crashes, and motor carrier census data.

For complete details on the Pre-Employment Screening Program's fees for driver safety records and how carriers and drivers can participate, visit http://www.psp.fmcsa.dot.gov.

How much does it cost? There is an annual subscription fee of $25 ( $100 if you have over 100 power units ) and the charge is $10 per driver.

It will be interesting to see both if and how the transportation industry will try to access this information

Acts of God- It's Time to Get Some Religion

A friend of mine at RLI sent me an article from e-trucker.com and truck legal pro Henry E. Seaton that gave me a bit of pause- and educated & challenged my knowledge of coverage. As you may know we have had a little rain here in Nashville and I have often been accused of being all wet. Here is what I know and learned:

What is an Act of God relative to weather ( note there are Acts of God that are not weather related which I will not bore you with)?

Henry's great definition is that Acts of God are weather conditions of epic proportions - like tornados,floods, hurricanes etc...

Are trucker's insured for Acts of God? Not typically. Remember motor truck cargo is third party legal liability coverage and the trucker is not legally responsible if the proximate cause of loss was an act of god.

Are trucker's normally held legally liable for acts of God? Again no but there are exceptions( an exception would be that the trucker parked in a known flood plain, knew of a big storm coming, and did squat so that everything flooded- so he became liable due to neglect).

But will insurance company pay for Acts of God losses? Yes but not unequivocably. Note if you look at the industry standard AAIS coverage form for motor truck cargo, there is no exclusion for acts of god per se ( although there are many exclusions).

One of the challenges we see daily is that truckers will sign darn near any type of agreement from the shipper to get the business. Frequently those agreements require indemnification, limits of insurance, and unfortunately that the trucker is responsible for all loss or damage. Regrettably that has nothing to do with negligence so you could easily have a situation where the insured is responsible and the insurance carrier shows up with no coverage.

That is why the coverage form is so important. What we want to see happen is that if it is on our truck that the insurance company pays. Period. The reason is that the shippers want the truckers to be responsible. Most insurance carriers pay for a loss where the property:

* was under your care custody and control
AND
* the insured was legally liable

Where does coverage for Acts of God put an agent? In a potential E & O situation .
If a trucker sends you a shipper- carrier contract and it says the insured is responsible for all losses period, you should point out that he may not have coverage for acts of god ( and highlight the exclusions).

Note my viewpoint should not be construed as gospel and considered pejorative- but is based on many years experience writing motor truck cargo business and witnessing claims. Each insurance carrier will have their own take and you should ask them.

Does an Improving Economy = A Driver Shortage?

According to the TIA, a driver shortage has started to heat up- a sign that a recovery in the freight economy is well under way. The truck driver availability issue has been seen in the past but disappears when freight demand falls, but resurfaces as soon as volumes begin to pick up.

During his recent The State of Freight Webinar, FTR analyst Noël Perry predicted a shortage of about 180,000 in 2010 and 500,000 in 2011 as the recovering economy increases demand and the new regulations crimp the supply.

Truck drivers and driver/sales workers make up one of the largest occupations in the United States, holding 3.2 million jobs in 2008, according to the U.S. Bureau of Labor Statistics.

Carmack 101 and Onerous Shipper Contracts

While most insurance personnel have heard of Carmack, they have no idea of what it means. I thought the communication from Big Truck TV that legal pro Henry Seaton discussed is pretty succinct and helpful.( Note the questions and answers are all by Henry and not from this author.)

1. What is the Carmack Amendment and when was it adopted?

Since 1910 we’ve had a statute called the Carmack Amendment which provided a fairly level playing field on cargo claims; it provided that the motor carrier was the virtual insurer of the goods being delivered, but he was only liable for the destination market value. And most importantly, for claims mitigation, that the consignee was required to accept the shipment and mitigate the damages unless the shipment was “practically worthless”.

2.Why has the Carmack Amendment lost some of its relevancy?

As a result of deregulation and the contract venue, shippers are changing those rules of the game in their contracts. I call it, “Reject It, Crush It and Dump It.” They are placing additional onerous burdens on motor carriers and here’s basically how it works. They put in the contract that the shipper will not have the duty to mitigate and that whether or not they are going to mitigate the loss is at their sole discretion and not subject to any standard or “reasonableness”.
That type of language in a contract means that if you arrive at a shippers loading dock and the refrigerated shipment is 1 degree warmer than the shipper thinks it should be, they can reject that shipment, crush it and dump it and you have no say. So that perfectly good food stuffs shipment that could be mitigated, that could be a $300 claim, is now a $40,000 claim, and the carrier has no right of inspection, no right of salvage, no right to mitigate the damages. It’s those kinds of provisions in contracts that shapes the battlefield and creates a lot of the damage.

3. How can I protect my company from “Reject It, Crush It and Dump It”?

The first thing that I do in reviewing contracts is to redline out the “sole discretion” and put in the Carmack Amendment with a duty to mitigate so we can address any claims as a contract issue. Part of the shippers’ problem is they have been delayed in terms of claims adjustment; it’s remained as open unresolved issues; the last thing they want to do is call a lawyer in and make a big deal out of it. What you should do is go to them business to business and say, “Look, if we have a cargo claim, we will agree to mediation to resolve the issue. We don’t want you to crush it, but at the same token we’re not going to just deny the claim. We’re going to find a business relationship to resolve the claim, to get the good product into the commerce stream and to pay you the legitimate claim.” And I think if you explain the whole Carmack regime, a shipper can understand that it is a fair way to resolve claims.

Shippers Requiring Better Insurance Coverage- Federal Express and Microsoft

In watching submissions,I am seeing several contracts that are requiring better insurance coverage- and therefore as a result changing the current transportation insurance environment.

Case in point are Federal Express and Microsoft.

Federal express is requiring $5 million commercial auto liability out of their contract haulers to haul on their behalf. Likewise they are requiring a $500,000 limit on motor truck cargo and the deletion of the employee dishonesty exclusion.

Microsoft is now requiring a $1 million crime insurance policy.

While our firm has the ability to accomodate these type of requests, the ultimate price is borne by the trucker and they must decide if the revenue and the profitability from that revenue is worth it.

CSA 2010- The Second Look- A Game Changer

While the jury is out on when it will actually roll out, based on the information that I have picked up from my friends at Zurich, CSA 2010 is a game changer. I thought in the interest of brevity I would present what the deal is with some editorial pejorative that might help you and your people understand what the current game is and what the game is changing to.What has been presented by the goverment and others is confusing - and nobody really has their arms around it. So here we go:

CSA 2010 represents a radical departure from the way DOT currently evaluates carriers. The upshot is that there will be new liability implications to the trucker that an insurance company will have to get their arms around very quickly.

The goal of CSA 2010 is to simply reduce truck crashes, injuries and deaths. There are today 2 fatalities per 100 million vehicle miles which is a sharp reduction from a zenith of 6 fatalities per 100 million miles a short time ago. BUT the crash rate has only dropped very marginally- and that simply is not good enough evidently for the DOT.

CSA 2010 will establish a better data gathering mechanism that will use ALL roadside inpections and ALL crash result. DOT will be able to intervene sooner when there is a problem. The other big deal is that the new system WILL PROVIDE HISTORICAL DATA ON DRIVERS, and that is new.

What is not changing? 2 things:
1) no rules are changing and hours of service changes will occur
2) the current ISS inspection selection will still exist

So what is changing? 3 things:
1) a new safety measurement system (SMS)
2) a new intervention process by DOT
3) a new safety fitness determination (SFD)- THEY WILL BE DOING AWAY WITH RATINGS OF SATISFACTORY, CONDITIONAL AND UNSATISFACTORY

CSA 2010 will be evaluating many more carriers than DOT does presently and less of it will be done on site

INDIVIDUAL DRIVER EVALUATIONS WILL OCCUR WHERE A CARRIER (OR YOU) WILL BE ABLE TO GET A DRIVERS 3 YEAR EMPLOYMENT HISTORY. Bad drivers will have less opportunity to wander from job to job undetected.

SMS- SAFETY MEASUREMENT SYSTEM
- use crash rcord AND all roadside inspections
- weighs from 1 to 3 the severity based on the relationship of crash to risk ( more later on this)
- CALCULATES 7 BASICS( BEHAVIOR ANAYLSIS AND SAFETY IMPROVEMENT CATEGORIES)

What are the 7 BASICS?
1) UNSAFE DRIVING
2) FATIGUED DRIVING
3) DRIVER FITNESS
4) CONTROLLED SUBSTANCES
5) VEHICLE MAINTENANCE
6) CARGO ISSUES
7) CRASH INDICATOR

THE BIGGEST DEAL IN DETERMINING SCORES IS COMPARING THE NUMBER OF CRASHES TO THE NUMBER OF POWER UNITS- SO THE BIGGEST THING YOU CAN DO TO HELP A TRUCKER IS TO MAKE SURE THEY UPDATE THEIR MCS 150 EVERYTIME THERE IS A CHANGE

One size does not fit all. There is a peer group component to CSA 2010

COMPARISON OF SAFESTAT TO CSA 2010

- Safestat has 4 SEAs (Safety Evaluation Areas) versus 7 BASICs from CSA 2010

- Safestat identifies carriers for compliance review versus CSA 2010 identifies specific safety issues and goes into next steps quickly

- Safestat uses Out of Service (OOS) from roadside inpections and moving violations while CSA 2010 expand this to road safety performance along with roadside inspections

- Safestat has no impact on Safety Rating whereas CSA 2010 uses data to make a safety fitness determination

- Safestat does not use violations weighed on crash risk variable while CSA 2010 weighs those violations based on the relationship of crash risk

- Safestat assess CARRIERS ONLY while CSA 2010 measures CARRIERS AND DRIVERS

there will be a new carrier intervention process not seen before. Root cause analysis will be used to fix problems as to the what, why, and how to fix.

WHAT TRIGGERS CARRIER INTERVENTIONS? 3 THINGS:

1) ONE OR MORE BASICS DEFICIENCIES
2) HIGH CRASH INDICATOR
3) FATALITY OR COMPLAINT

Interventions will be both on site and off site with many more off-site

Interventions will result in corrective actions in 3 ways:
1) Cooperative Safety Plan
2) Notice of Violation or Claim
3) Operations Out of Service Order

THE CSA 2010 SYSTEM WILL REEVALUATE CARRIERS MONTHLY

*** CLEAN INSPECTIONS WILL HELP SCORE

Driver's employment history will be public. Preventable crashes will be rated differently than non-preventable crashes which is not the case

Now that I have killed you with details- what does it all mean?
* Insurance companies and agents and carriers will have a different and better way of evaluating and correcting deficiences
* there will be less substandard risks with bad drivers
* insurance companies will have much better data to evaluate loss costs and actuaries will love it
* Truckers will have no choice but to operate better
* Drivers will have no choice but to operate better
* Plaintiff attorneys will have a field day against truckers and insurance companies that have poor scores


ITS A GAME CHANGER!

Technology Mandated for Problem Truckers

You don't see insurance companies mandating technology that could easily correct trucking problems. The reason for that is that there are too many insurance companies without best practices standards; moreover, they do not provide any financial incentive ( premium savings) for truckers to get technology. It is a bit silly really as the insurance company ends up being a beneficiary as well.

Well the government feels different. See what the FMCSA is mandating below ( from Transport Topics):

The Federal Motor Carrier Safety Administration Friday issued a rule that will require carriers with serious patterns of hours-of-service violations to user electronic on-board recorders in all vehicles.

FMCSA estimated that 5,700 truck and bus companies would be required to use EOBRs after the first year of implementation for the rule, which goes into effect June 1, 2012.

The agency also said it will start the rulemaking process later this year for a rule mandating EOBRs for more carriers.

Under the rule, carriers with 10% or more HOS violations during a compliance review will be required to install and use EOBRs in all of their vehicles for at least two years, FMCSA said in a statement.

Carriers that voluntarily use EOBRs will be exempt from some of FMCSA’s requirements regarding HOS supporting documents.

The rule also outlines technical requirements for EOBRs, which record data about the amount of time a driver operates the vehicle.

Transportation Insurance Climate- April 2010- Lower Premiums/ Broadened Coverage

Are agents, MGA's and insurance companies paranoid about market conditions that operate in the trucking space? The answer is yes and you can see why based on the abridged article from Transport Topics below:


Increased competition is driving down insurance rates and forcing providers to offer broader coverage to transportation firms, according to interviews with industry specialists and new surveys.

Insurers also are seeking new ways to package their offerings to cover a growing list of transportation and logistics services.

Insurance rates have been declining for several years, but new surveys indicate that competition has intensified recently as more insurers have entered the market.
Three out of four insurance brokers and underwriters surveyed by NIP Group Inc., Woodbridge, N.J., said premiums charged for trucking policies continued to decline in the fourth quarter of 2009 and were “intensifying” after earlier
surveys had suggested a firming of insurance rates.

Overall commercial property and casualty premiums fell about 6% in the third and fourth quarters of 2009, according to a market index survey published by the Council of Insurance Agents & Brokers.

The soft insurance market is allowing fleets to negotiate better deals.
One insurer, for example, agreed to amend its liability policies to include the cost of a replacement vehicle with no increase in premium, The prospect of lower premiums gives motor carriers the option of securing more coverage for the same rate or
paring back coverage and pocketing even more savings.

A lot of companies trucking exposures have decreased because they are driving fewer miles, or they have a smaller payroll and fewer power units.

As carriers move further into freight management, they face new and different risks.
Carriers may be held liable for lost sales or extraordinary expenses, for instance, if a shipment does not arrive on time or is lost or damaged. A major issue of concern for insurers is how to cover the activity of brokers and third-party logistics companies.

Let's see if the insanity continues....

33,963 is the number of US Traffic Deaths in 2009

Source: DOT

The number of U.S. traffic fatalities reported at the end of 2009,
which was the lowest level since 1954. According to the U.S.
Department of Transportation, the number is 8.9 percent below the
37,261 deaths reported in 2008 and translates to a fatality of 1.16 fatalities
per 100 million miles traveled.

This should lower loss ratios and lead to further softening in the insurance marketplace. It would be interesting to see if trucking insurance carriers could carve out the fatalities they have had per 100 million miles traveled.

Phamaceutical Thefts- Thefts to Order

The $75 Million Pharmaceutical Heist
How common are stolen prescription drugs, and where does the contraband resurface?
In a widely reported incident, thieves broke into Eli Lilly and Co.'s Enfield, Conn., warehouse last Sunday and made away with about $75 million worth of antidepressant pills and other prescription drugs. The thieves waged a high-tech assault on the warehouse, cutting a hole in the roof and rappelling inside, where they disabled the alarms and removed enough drugs to fill at least one tractor-trailer—tactics more reminiscent of Hollywood action-adventure movies than newspaper headlines. The incident, believed to be one of the largest prescription-drug heists ever, is currently being investigated by the FBI and local law enforcement, although no suspects have yet been identified. The case captured national attention in part due to its audacity and scope, but also due to the unlikely target. Since when have prescription drugs been the target of master criminals? NEWSWEEK's Ian Yarett spoke to Dan Burges, the director of intelligence at FreightWatch International, a security firm that tracks cargo theft, to get more context on these kinds of crimes.
How frequently do prescription-drug heists occur?
In the early part of the last decade, there was some pharmaceutical theft going on, but there wasn't a lot of attention placed on it. But in 2005 and 2006, it really took off. We reported 35 pharmaceutical thefts in 2007, and 46 each in 2008 and 2009. Thefts from trucks are most common; only three of the 2009 incidents were warehouse thefts. There have been 10 pharmaceutical thefts thus far in 2010, including the most recent Eli Lilly one.
What does this amount to in the grand scheme of things?
Well, 46 total pharmaceutical cargo thefts aren't a huge number compared to, say, electronics thefts, which might occur 150 times over the course of a year. In our database, pharmaceutical thefts made up only about 5 percent of the total volume of theft incidents in 2009. But in terms of monetary value, pharmaceutical theft is astronomical. Cargo theft in the pharmaceutical industry in 2009 amounted to an average of $4 million per loss. The only thing that even comes close to that is the cell-phone industry, which averaged just over $2 million per loss.
Where do the stolen drugs generally end up?
In the United States, the most common route is down to South Florida, the Miami-Dade area. Then, drugs are shipped to Latin America, or sometimes Asia, often for sale on the black market and/or for counterfeiting purposes. There have also been reports of product being repackaged and reintroduced into the U.S. market or into other areas. In other cases, drugs are sold directly in the U.S. market, typically through nefarious online retailers. But I think it's pretty unlikely that a U.S. hospital or pharmacy would acquire stolen pharmaceuticals.
Does this kind of prescription-drug theft happen as frequently in other countries, especially ones with cheaper prescription drugs?
Drug-cargo thefts are common in Latin America, Brazil, Argentina, and Mexico, maybe not quite to the extent we see in the U.S., but still quite common. In Europe, historically, this is far less common, especially since so many prescription drugs are very cheap or free, although we have been beginning to hear more reports of drug theft in Western Europe, primarily with stolen goods being moved east.
Which places have the biggest black markets?
I think the default answer to that is Latin America, looking at Brazil, Colombia, Central America, Argentina, etc. Costa Rica is actually pretty notorious for black-market products, [including but not limited to] pharmaceuticals.
How do thieves decide which drugs to steal? What's worth the most on the black market?
Cargo theft in the United States is by and large a theft-to-order type scenario. There are people who make their living brokering loads of stolen goods—often we see that thieves have a buyer lined up, or potentially have even sold pharmaceuticals or other goods before they've even been stolen. These cargo-theft gangs do research, find out where a particular product is being manufactured or distributed from, dispatch a team to that location to conduct surveillance, and then either steal the goods on the road from trucks or, as in this recent case, from the warehouse. A few years ago, it was a bit more potluck—thieves would kind of hang out at truck stops, steal whatever they could, and then determine whether or not they could sell it. Whereas now, they steal what's popular, because then they're going to be able to sell it to the consumer for a cheaper price and ultimately make money off it.
Historically, are stolen drugs ever recovered by the manufacturers?
Last year, of the 15 or so pharmaceutical thefts that were over a certain [monetary] benchmark ... some of the drugs were ultimately recovered in more than 80 percent of the cases, through various law-enforcement techniques, like undercover buybacks.
What happens to recovered drugs? Are they considered safe for distribution, given that they could have been tampered with?
Almost exclusively they are destroyed. And that magnifies the economic impact of pharmaceutical theft—if a pharmaceutical company produces a particular product of a particular lot number, often the FDA requires that they recall and destroy all of that lot number, even from shipments that weren't stolen.
http://www.newsweek.com/id/235071

Mitigating Cargo Claims When A Load is Rejected- A Transportation Attorney's Perspective

From Big Truck TV

Henry Seaton is another pro in the business- a very fine transportation attorney. Although I don't know him personally, I have seen his fine work helping truckers in figuring out how to handle everything from cargo claims, contract language, and insurance legalese.

Note that there are a lot of cases where rejected loads are not covered from an insurance standpoint. First and foremost, an insurance carrier will look to see if there is actual physical loss or damage and if it is, how the claim happened. Spoilage is a common exclusion under the MTC form.

Henry's point of view(edited):

If you are going to mitigate a cargo claim, you need to do it within the first 24 hours of rejection. What we recommend to our clients is, the minute that shipment is rejected, go upstream and get out what is called an on-hand notice. An on-hand notice is a notice from you, the carrier, to the consignee, the consignor and the broker that says you have their load, it’s been wrongfully rejected, you’re going to put it in a warehouse and get it inspected – they need to come and tell you ho to mitigate the damages or its going to be sold; and if it’s sold and brings a distressed market price, that’s not the fair market price – that’s simply the price that it brought because the shipper never put it through the chain of commerce in the ordinary way. So, you issue your on-hand notice and you immediately get the product inspected.

I’ve even gone to the point of advocating that drivers carry digital cameras that have a time and date stamp on it so that when the shipment is rejected the driver can take pictures of the product in the trailer because six months after the fact a notice on the bill of lading that says, Rejected – Wet, doesn’t begin to show to what extent the product was wet. It may very well be the shipper left the doors open and the back two skids of the ice cream shipment melted in the hot Memphis sun and there’s nothing wrong with the product. Documenting the condition of the product at the time of rejection, getting it into proper temperature control and doing all that within the first 24 hours is an important way to resolve the claim.

Also, you have to realize that most motor carriers attempt to insure against that loss by having a policy of insurance. If they have the proper insurance, the insurance company will move in and take over the adjustment. But it’s a sad reality of the refrigerated industry that a lot of the policies are not all-encompassing; they may not even have reefer breakdown insurance, but the policy they do have may be limited to reefer breakdown, which means the shipment is rejected because the product is “hot”. The carrier is liable for the claim but the insurance company says the reefer was working fine so they’re not going to cover the claim. If the insurance company doesn’t have any skin in the game, they won’t be interested in helping the carrier mitigate the damages. And sometimes, with insurance companies that don’t specialize in refrigerated product, they’ll send in an adjuster who wouldn’t know whether tofu was fit for consumption or not and all they can do is a visual inspection, which isn’t worth much if you want to fight the claim.

March 2010- Various Topics- Cargo Theft, Delay Exposure, Trucking Bankruptcies & TWIC Cards

Jean Gardner at CAB ( Central Analysis Bureau) is a pro in our business. She and CAB do a very nice monthly newsletter. Here are some items I think are worthy of mention:

1)CARGO THEFT - The Wall Street Journal reported that over 5 days in January, a truck load of consumer electronics, a truck load of paper and a truckload of chairs were stolen. Accordingly to FreightWatch, $487 million in goods were stolen in 2009, a 67% increase over the last year. That involved 859 truckloads of goods. That is a lot of cargo being taken. With economic conditions still not good, cargo theft is likely to continue to rise, with professionals and amateurs taking a stab at the crime. Rest stop thefts are reportedly the largest group so pay attention to where your carrier is operating and whether he will need to park trailers at rest stops.
( editors note: cargo theft data is all over the map and the industry is working to get better information. My personal thoughts is that this represents only reported goods and I would say there are very substantial cases of underreporting here.)

2)DELAY EXPOSURE - As those in the cargo industry know, Wal-Mart has long led the way in imposing requirements on how, when and where its product will move through the country. If a Wal-Mart imposed obligation ultimately works that obligations then begins to be imposed by many shippers. It is now reported that Wal-Mart has implemented penalties for shipments which are not delivered within its required deadline, which allows for a 4 day window for delivery. While most cargo policies exclude damages caused by delay, this is an additional exposure to a motor carrier which needs to be considered. ( editors note: delay is a common exclusion under every motor truck cargo form. Look for the industry to be asked to include coverage for delay.)

3)TRUCKING BANKRUPTCIES - Avondale Partners has released its report on the 4th quarter study of trucking bankruptcies. 445 fleets failed in the 4th quarter. A total of 21,010 trucks came off the road, more than double what was lost in 2008. Avondale indicates that they do not expect the first quarter of this year to be any better as fleets which fought hard to stay afloat are simply losing the momentum needed to stay alive.


4)TWIC CARDS - For those of you unfamiliar with this term, a TWIC is a transportation worker identification credential card. Over 1.5 billion have been issued thus far and the number is growing. The card, which is issued by the TSA, verifies the driver and is required in many pier and airport trucking operations. It is taking on added use as shippers seek to require those cards as evidence of a driver’s identity when picking up a shipment. Is this information which an underwriter would consider in evaluating the motor carrier’s exposure? Presumably, the more drivers who have been vetted by the TSA the less likelihood there is of cargo theft by drivers and the ever increasing imposter losses. ( editors note: I had never heard of TWIC. This is one step before having a national driver card which makes sense for our industry).

Have a great March.

Truck Claims-Building a Trucker's Defense & What the Feds Require- Helping Truckers and Their Lawyers

My friend Jeff Trainor who runs a great tranportation insurance link on Linked In showed me interesting facts about what an insured is required to have as deemed by the Federal Motor Carrier Safety Administration ( FMCSA). This analysis was developed by a most capable attorney named Steven M. Gursten.

Helping truck accident lawyers better understand preservation of supporting documents strengthens a trucker's case.. Many commercial truck crash cases begin with investigation of the driver. For pre-deposition or interrogatory analysis, there are several other ways to “fact check” the accuracy of a driver’s daily log book. Receipts for food and gas accumulated throughout the day, bills of lading, toll receipts, “EZ Pass”-type toll collection system records, and on-board GPS tracking print-outs are just a few examples of the verifiable footprints a driver leaves behind when he’s on the road. A savvy truck accident lawyer will be able to determine whether it was feasible for the driver to actually make the trip he documented in his daily log. A trucker should make sure he has that information for his defense.

Federal truck law 49 CFR § 395.8(k)(1) requires motor carriers to retain all supporting discovery documents at their principal places of business for a period of six months from the date of receipt. Under the regs, “supporting documents” are defined as motor carrier records, maintained in the ordinary course of business, used by the motor carrier to verify the information recorded on the driver’s daily log.” Essentially, any documents directly related to the trucking company’s operation, which are retained by the truck in connection with the operation of its transportation business, are considered “supporting documents.”
Failure to preserve these supporting documents for six months after driver submission is considered a “critical” offense under Appendix B to § 385. In discovery, some carriers do not preserve their drivers’ daily logs and supporting documents, A carrier that does not preserve this data carrier is violating federal law.

If the carrier did have such supporting documents in its possession, and it’s later found that the driver violated federal driving limits, the case against the carrier itself will be significantly strengthened.

Under 49 CFR § 395.8(k)(1), the carrier has the burden to investigate and audit its driver’s hours of service through supporting documents. Simply ignoring false logs presented by its drivers will not absolve a carrier from liability.

If a trucker asks you what they can do to mitigate damages after a loss, give them this information.

Tranportation Pricing Survey Confirms Continued Soft Marketplace

It is neat to see surveys on transportation insurance pricing. NIP Group is a market leader in the survey business. I am challenged to believe the survey results are anything but conjectural- in that the exposure basis is not reflected in the survey and you can bet exposures have lessened ( i.e. less trucks on the road). The survey also does not measure the relativity of loss experience either.

Even so I think you will find the report helpful below:

Transportation Insurance Pricing Survey (TIPS™) Results Released,
Rate Decreases Intensify as Stubborn Soft Market Persists
February 26th, 2010 (Woodbridge, NJ) — NIP Group, Inc. published the results of the Transportation Insurance
Pricing Survey (TIPS™) for the fourth quarter of 2009. Used to benchmark changes in availability and rates in the
transportation insurance market, the survey was issued to leading transportation insurance brokers, wholesalers
and underwriters representing thousands of account placements.
The majority of survey participants have responded that they believe the market is softening and that rate
decreases have intensified especially in Auto Liability since the prior quarter. Respondents also suggested that
there appears to be more insurance carriers chasing premium in the transportation insurance market.
Participants report that rate decreases have picked up across most policy types; Workers Comp being the one
clear exception. Rates in Auto Liability have been hit especially hard, as 30% more respondents believed that there
were significant rate decreases in 4Q09 vs. 3Q09, and the number of reported rate increases also fell sharply.
The survey also measures premium changes across ten different transportation segments including:
■ Trucking Operations ■ Intermodal Carriers
■ Messenger/Courier Services ■ Ambulance/Paratransit
■ School Bus Contractors ■ Bulk Transportation
■ Airport Ground Transportation ■ Charter/Tour Bus Operators
■ Specialized Carriers & Riggers ■ Limousine Services
The survey results indicate that rate decreases have picked up in most segments; Charter/Tour, School Bus and
Limo being the exceptions. The rate decreases are especially pronounced in the Bulk Transport segment.
“Since the last quarter rates continue to fall and are intensifying in Auto Liability the lead line of business in the
Transportation market based on the latest TIPS™ results,” said Richard Augustyn, CEO of NIP Group, Inc. “With
the exception of the Public Auto segment fierce competition for premium volume is driving rates lower. We will
continue to monitor TIPS™ results to see how much lower rates will fall given that the momentum behind this trend
appears very strong.”

State of Transportation Insurance- February 2010

The Song Remains the Same...

The transportation insurance business is still very soft. It continues to be a buyer's marketplace due to some of the following factors:

1) Capacity- If you have been following the stock market, insurance companies have released stellar results. While a great deal of the stock price increases are a direct result of investment income turnaround, many gains have been made through better product management ( aka better loss ratios) than previously. Since there have been virtually no catastrophes on US shores, capacity is pervasive. With more insurance companies writing the business with excess capacity, lower pricing is pervasive. I would argue that not allowing AIG to fail has hurt a great many in the insurance business.

2) Distribution- In today's insurance economy, all markets can be accessed, therefore, any type of exclusive control by agents and MGA's is gone. This has created a marketing paranoia in the marketplace. Specifically, you could have a happy and satisfied insured, agent, MGA, and insurance company- and due to market forces either the insured, agent or MGA shop individually, or even worse all together, the business. Distribution is forcing downward pressure on pricing continually. And there is no end in sight. There is a lack of reassurance in the marketplace due to the fact that there is "that company" that could beat us.

3) Renewals- The industry by and large is a renewal industry. That is, there are very few carriers smartly writing continuous until canceled policies. That way the pricing does not change. Regrettably even those that offer these pay plans are not incentivizing more business to be on these pay plans. So you are left with policy expiration dates and renewals. With each renewal, the accounts are paying less. This is a business that simply does not get it and the product needs to be improved.

4) Less Exposure- In this blog, I have released numbers about the reduction of trucks on the road. Those trucks are not showing up on policies. There is less exposure. Most insurance carriers are not measuring the pricing change relative to the exposure base. If you had to ask an insurance carrier what the exposure attrition on their book of business is on an annual basis, I am not sure they could or would ever tell you. So when you are budgeting for premiums which each agent, MGA and company is doing so, there is a continued shortfall.

5) Technology- On a seperate subject that should have mataphorical significance, I applied to 3 colleges when I was of age ( I was lucky to get in one- Vanderbilt). Parathetically my daughter due to something called the Common App, applied to 12 colleges. There has been no measurement taken in the marketplace relative to how today we market business than when we did in yesteryear- and there are huge differences. I can tell you the upshot is not pretty. Agents used to market to one or two places. Now they market to 10. The diseconomy of being in the quote business rather than the writing business has hit us all. Technology was viewed as a savior of the business. It has only made the business more frenetic.

6) Commoditization- What is the difference between Great West, Northland, Maxum, Canal, Zurich, Sentry, Cherokee, Star, Lancer, Carolina Casualty, Continental Western, RLI, CNA, Ace, Hallmark, and others? Most buyers and sellers of insurance could not tell you- and that is the problem. If there is no differentiation ( and there is a difference) then all you are left with is price. The companies need to prove themselves as innovators and I only know of two companies that have done so.

Does this mean we all need to just go out there and shoot ourselves? No. But it suggests that if the only measurement tool is going to be reduced pricing, we should all plan on losing more than we gain. So it is up to all of us to reinvest in your relationship with your insured, your agent, your MGA, your insurance company, and prove your value. We have to assess oursleves constantly with humility that, even as subject matter experts hopefully extoling value, we are beatable daily. So a new paradigm is in order.

Failure to do same will result in the status quo. That is, if you are going to do business on the same basis, expect the same results. Let's all figure out a way to stop it. In my over 25 years at GTU, I would like to not chock it off to perseverance and insanity...

The Answer is: $2750

The question?

What is the fine that will be levied on drivers of large commercial vehicles and buses if they violate a new US government ban on texting while driving behind the wheel? This is consistent with the federal government fine for drivers who text while driving federal government vehicles.

It makes you wonder if there is a way to determine if someone was texting at a certain time where a loss occurred and if there is a way of proving that. Look for some attorneys to figure this out.

What has not been discussed is that this is just another way a driver of a vehicle can be determined negligent. As we don't see there being less ways for drivers to be negligent, one would think this would increase loss cost.

What A Trucker Should Do to Mitigate Refrigeration Cargo Claims Before They Happen and Dealing with Truck Brokers

From Big Truck TV- Hank Seaton

I have gotten to be a fan of Big Truck TV and they bring up items from time to time with issues that relate to trucking insurance. Noted transportation attorney Hank Seaton has given a great analysis of what a trucker should do in his negotations with brokers and shippers relative to mitigating refrigeration breakdown claims per the dialogue below:

"How can we protect a trucker's interests when we’re dealing with brokers ( note this is relative to all truckers- not just reefer accounts)

There are really several things that a carrier should do and a lot of them relate to establishing business practices in a rules tariff. One of the items is to put into your rules circular that you will maintain constant temperature as required by the Bill of Lading in Transit and that your recorder off of the truck will be prima facia evidence that the temperature has been maintained because otherwise if the shipment gets to destination and it’s out of temperature, there’s going to be a presumption that you’re the one that damaged it in transit. However, if you have in your rules tariff that no, if we have a recorder that shows we maintained temperature, then it overcomes that presumption.
A second item – and I do think this is of utmost importance – is that truckload carriers limit their liability by tariff to the extent of their insurance. You’ll need to tell your shipper up front in the contract that your maximum limit for cargo loss or damage is $X and if the value of the shipment is higher than that, you’ll go out and buy additional insurance for that particular shipment but you will want to negotiate a special rate to cover the cost of the additional insurance.

Are there any little tricks a trucker should know about when dealing with refrigerated product?

In the refrigerated area there are some particular tricks of the trade you should be made aware of. Number one, does the trailer need to be pre-chilled because a reefer only maintains temperature, it’s not capable of lowering the temperature. If you go in with a reefer that has an ambient temperature of 90 degrees and you put refrigerated product in it, you’re going to have a problem – you need to pre-chill the trailer before loading the product. Recording the temperature on the load confirmation sheet, recording the nature of the product, knowing the susceptibility of the product to temperature damage are all very important issues.


What’s the deal with offsets and why is it important that our broker doesn’t use them?

A very important issue when dealing with a broker is the dreaded off-set. Often times a broker will tell the shipper, “Don’t worry about cargo claims because I’ll take care of them for you. I’ll accept responsibility for the cargo claims.” But the way the broker accepts that responsibility is to say, “You’re right Mr. Shipper, you’re owed the money, I’ll just take it out of the carrier’s receivables.” That’s called an off-set and it’s very important that a motor carrier get a broker to agree to pay the freight charges and to litigate the cargo claim, and not simply off-set them. Far too many small refrigerated carriers are run out of business by the off-set. If they’re factoring their receivables, they’re pledging to the factor that that receivable is due, owing and uncontested and then all of a sudden the factor gets a notice declaring the shipper isn’t paying that $120,000, they have a cargo claim – at that point, the factor says his client is damaged goods, and he basically owns and forecloses on him. So that is really a spiral of death and the off-set is something that you really need to address up front.

As far as protecting a trucker, what should we be aware of when dealing with new brokers?

Some of the things that you should do when dealing with brokers are, number one, check out their bona fides, see how long they’ve been in business, see how they pay their freight charges, and use a credit referencing service to determine their viability. Number two, do not surrender recourse to the shipper; there will be a tendency on the part of the broker to say, “Look only to me for payment of the freight charges.” You want to take the position that the broker is the agent of the shipper and that you can ultimately go to the shipper for payment. Number three, see how they deal with the offset. Provide that Carmack governs; it’s not a question of indemnity, it’s not a question of they can pay any claim they want to and take it out of your hide – you have a right to be involved in the mitigation of the loss. Those are the three major issues when dealing with brokers."

Heists Targeting Truckers on Rise

From Dow Jones News Services

Thieves are swiping tractor-trailers filled with goods, triggering a spike in cargo theft on the nation's highways.

Over five days last month, an 18-wheeler carrying 710 cartons of consumer electronics was stolen from a Pennsylvania rest stop, a 53-foot-long rig packed with 43,000 pounds of paper was ripped off in Ottawa, Ill., and a 40-foot-long truck filled with reclining armchairs went missing in Atlanta.

Truckloads containing $487 million of goods were stolen in the U.S. in 2009, a 67% increase over the $290 million worth of products swiped a year earlier. Thieves stole 859 truckloads in 2009, up from 767 loads in 2008 and 672 in 2007, according to FreightWatch International, an Austin, Texas-based supply-chain security firm that maintains a database of thefts that several government agencies, including the Federal Bureau of Investigation, look to for trends.

Drivers at a truck stop in Nebraska in December. In many recent cargo robberies, thieves have taken whole rigs when drivers stepped away.
"In the past two months, we've just seen such an increase that it's to the point where criminals are just wreaking havoc," said Sandor Lengyel, a detective sergeant and squad leader in New Jersey State Police's cargo-theft unit. "They'll pretty much steal anything." Cargo thieves ripped off $28 million in goods in New Jersey in 2009, an 87% spike from the $15 million stolen in 2008, he said.

Law-enforcement authorities in Illinois, California and Pennsylvania are among several agencies and industry groups also reporting a spike.

Chubb Corp., a major insurer based in Warren, N.J., said that its own insurance claims and data from other sources show 725 cargo thefts in 2009, up 6.6% from 680 in 2008, and up 23% from 592 cargo thefts recorded for 2007. Chubb estimates the 2009thefts amounted to $435 million of products.

A truck found in Florida, after being stolen in North Carolina with a load of cigarettes. The latest wave of thefts is different from a run of tractor-trailer hijackings that occurred in the 1960s, when organized-crime rings forced drivers out at gunpoint and took their trucks. According to industry officials and police, the current thefts are generally nonviolent and typically happen at rest stops when the driver is away from the truck and eating or showering.

While organized-crime rings may be involved, "we are seeing a lot more amateurs get into this," said Sgt. Sid Belk, of the California Highway Patrol. Cargo bandits made off with $29 million of goods in 2009 in Southern California, up 67% from $17.4 million in 2008, according to the highway patrol.

Thieves "sit and wait and watch, and when the driver goes in to take a shower, that's when they steal the trucks," said Special Agent John Cannon, head of the Georgia's Bureau of Investigation's cargo-theft squad, which was launched in 2009. He believes that thefts of consumer goods in particular are "directly related to the economy; people are stealing things that they can get rid of quickly, and consumers are looking for a deal."

Thieves often know what cargo a truck is hauling because they will follow trucks from a plant, according to police.

Thieves drive the whole tractor-trailer away or hitch up to an unattended trailer, as truckers sometimes leave a trailer in a drop lot and drive off in just the tractor for an errand. Typically when stolen, the tractor portion is found close to the site of the theft. The empty trailer is usually found miles away, abandoned, and often repainted or reworked in an effort to disguise the stolen truck.

Cargo theft represents a big concern and cost for trucking and other freight haulers, says J.J. Coughlin, chairman of the SouthWest Transportation Security Council, a nonprofit industry group that represents more than 200 freight-shipping companies. The council estimates that the average loss in each theft is $350,000—and that is just the load inside the truck. "Sometimes you lose that too," he said of the tractor-trailer. Typically, though, the tractor-trailer is found miles away. "We find that thieves target the loads," he said.

Mr. Coughlin said that in an effort to combat the problem, freight shippers have been meeting more with police departments. The shippers have also been pushing owners of truck stops and drop lots to provide better security. "That is easier said than done," he said.

Also, in the past two years, the freight shippers have banded together to try to come up with solutions, such as sharing information about what kinds of loads are most stolen so that when those goods are shipped, everyone in the supply chain can be alerted to pay extra attention.

California, Florida, Texas, Georgia, Illinois and New Jersey are the top states for number of cargo thefts, according to FreightWatch. The crooks are targeting such things as electronics, food and beverages, clothing, pharmaceuticals and cigarettes.

The thefts can also threaten consumer safety. In February 2009, an unattended refrigerated truck loaded with $11 million of insulin made by Danish drug concern Novo Nordisk A/S was ripped off in Conover, N.C., while the driver was in a truck stop, according to Sgt. Shane Moore, of the Conover police department.

After the theft, the Food and Drug Administration and Novo Nordisk put out a news release, alerted the health-care industry, and advised pharmacies to inspect inventories, said Sean Clements, a company spokesman. Still, some of the stolen vials wound up in the hands of diabetics, several of whom showed up at medical centers in Kentucky and Texas over the summer sickened because the insulin was inactive, said Karen Riley, an FDA spokeswoman.

The FDA's Office of Criminal Investigations is looking into how the drugs were given to patients. Mr. Clements said the stolen insulin did not get to patients through Novo Nordisk's normal distribution. He said the "safety of our patients is of paramount concern," and that the company is working with investigators, and has taken steps to improve security.

Electronics were the target of a thief who struck near midnight on Jan. 13 at a minimart in Hazleton, Pa., two hours north of Philadelphia. A trucker hauling $500,000 of electronics to an Amazon.com Inc. distribution center left his trailer parked there while he made another delivery elsewhere, said Trooper Charles Everdale III, of the Pennsylvania's State Police auto-theft task force. When the trucker returned the trailer was gone, the trooper said. He said the partially empty trailer turned up in recent days in Palm Beach, Fla. Amazon declined to comment.

In the pharmaceutical industry, "most everyone has had some type of cargo theft" with a spike in "high-value loads" stolen over the last two years, said Chuck Forsaith, the director of supply-chain security for a unit of Purdue Pharma LP, a privately held pharmaceutical company in Stamford, Conn., and also director of the Pharma Cargo Security Coalition, an industry group

Texting is Now a No

from Reuters

( By the way is it texting when someone is typing in an address to get a telephone number to call?)

U.S. Bans Texting by Drivers of Large Trucks, Buses

The U.S. government Tuesday banned hand-held "texting'' by drivers of large commercial trucks and buses to avoid the danger of distracted driving.

Transportation Secretary Ray LaHood said in a statement the prohibition takes effect immediately. It follows a similar ban in December for drivers of federal government vehicles.

"We want the drivers of big rigs and buses and those who share the roads with them to be safe,'' LaHood said. "This is an important safety step and we will be taking more to eliminate the threat of distracted driving.''

The new ban carries fines of up to $2,750.

Research by trucking regulators show that drivers take their eyes off the road for much of the time that they send and receive text messages, and they are significantly more at risk of getting into an accident than someone who is not texting.

The National Safety Council, a research and advocacy group, estimates that 200,000 crashes of all types on U.S. roads are caused by drivers who are "texting.''

Nearly two dozen U.S. states ban "texting'' while driving for all motor vehicles and others are considering similar action. Legislation has also been introduced in Congress to prohibit the practice.

Many U.S. companies also ban "texting'' by their employees while driving on the job.

CAB- 2009 Review and Look Ahead to 2010

CAB again stands for the Central Analysi Bureau, a GTU partner and friend, who we think espouses great knowledge with respect to transportation insurance in particular and the transportation industry in general. I attach their year-end review and there is something in it for everyone. Here are some things I see which gave me some pause:

Simple survival was the main objective for most of the country in 2009.
The USA saw over 1.4 million reported bankruptcy filings.
With respect to trucking in 2009, 785 companies with an average fleet size of 50 power units or 39,030 trucks are no longer on the road.
The trucking industry lost 90,000 jobs or a decline of 6.7%.
From a bright spot perspective, owner-operators reported the number of miles driven up 1.5%.
Based on a commodity flow survey, electronics, electrical, and office equipment were the top commodities in terms of values shipped representing $1 trillion in values.
With respect to tonnage, coal was tops at 836 billion ton miles.
The average loss per major cargo theft was $2.1 million.

You can see the entire report:

http://www.cabfinancial.com/index.php?option=com_content&view=article&id=901:2009-review-and-look-ahead-to-2010&catid=23:resume&Itemid=30