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First driver safety ratings yield mixed results for carriers

Eight out of 23 companies receive scores that could warrant federal government involvement in their operations.

The first publicly available data measuring truck driver safety showed mixed results for major trucking companies and third-party logistics service providers, with eight of the 23 companies receiving scores that could warrant federal government involvement in their operations at some point.

According to the data, made available Dec. 12 by the Federal Motor Carrier Safety Administration (FMCSA), eight carriers, including Knight Transportation, FedEx Ground—the ground parcel unit of FedEx Corp.—and Covenant Transportation, scored in certain categories at levels that could prompt FMCSA "intervention" into their businesses. The intervention process normally begins with a warning letter from the agency, providing the companies with an opportunity to review their performance and make improvements without further agency involvement. FMCSA intervention does not automatically signify that a carrier's operations are unsafe.


Thomas R. Wadewitz, transport analyst at JPMorgan Chase, said he was "surprised" by the number of "poor ratings" received by large carriers, mostly in the truckload sector. Wadewitz said the scores will prompt affected carriers to be more aggressive in their recruitment of drivers with strong safety track records and that it will push as many as 9 percent of drivers out of their rigs. "The result will most likely be a significant rise in driver pay in 2011 and 2012," he said, adding that any harm carriers suffer from paying higher driver wages will easily be offset by their ability to demand higher rates due to tightening capacity.

Jon A. Langenfeld, transport analyst for Milwaukee-based investment firm Robert W. Baird & Co., said the results are good news for large trucking companies that have the scale and resources to better manage the driver recruitment process, mitigate the shipper's burden in securing capacity, and limit the impact of higher insurance premiums with an ability to self-insure.

"Publicly available safety data creates [an] opportunity for insurance companies to actively monitor scores. Additionally, potential legal and social consequences of hiring carriers with poor safety ratings may guide shippers' decision-making process," Langenfeld said in a research note. The results of the driver safety assessments "impact all carriers regardless of size, with safer, larger carriers benefitting," he said.

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