And think ‘evolve,’ not just survive

By Advance Business Capital

Used to be, the only paper credentials a carrier needed to get a job was a license in good standing and proof of insurance. Not any more. CSA has changed the minimum standards the marketplace demands. Shippers and brokers now look at your CSA score. A high one is bad news; prospects may move on to someone with better federal safety ratings.

Is CSA Accurate?

Whether this is fair depends on whether a high score is an accurate accident predictor. So far, this hasn’t been demonstrated. The ATA has found that in at least two of seven areas, high BASIC (Behavior Analysis and Safety Improvement Category) scores are a “poor predictor of crash risk.”

Fair or not, it’s the new standard. Any shipper or broker can now log in to the FMSCA website and view a carrier’s BASIC score. This has been the subject of much comment lately in the trucking press. What’s been less discussed is how a CSA score will affect carrier insurance rates. It’s too early to say for sure.

CSA and Your Insurance Rate

Many trucking industry officials and legal experts say they expect CSA scores to become a key measure of carrier safety performance and, as Transport Topics has noted, “Exhibit A for attorneys looking for evidence of fault in crashes involving commercial trucks.”

The public release of CSA data on Dec. 12, in fact, gives media, attorneys, shippers and brokers "no choice but to act on it," said Steve Bryan, chief executive officer of Vigilio LLC, a company that analyzes and tracks CSA data for carriers and shippers.

CSA, Bryan said, "… is defining the safety profile of carriers, whether or not that was the purpose. Unfortunately, It will be abused. It will be used for purposes not intended and that will happen very quickly."

The prospect of a CSA score being implemented as evidence in litigation means insurance companies will consider a carrier’s score in setting rates. For carriers with low (good) scores, that could mean lower rates, even a discount.

Doug Hathaway, vice president of Maxum Specialty Insurance Group, Atlanta, said he sees CSA scores as part of a shift from rates based on loss history to "more predictive data."

When CSA Is a Carrier Plus

Says Hathaway, "If a carrier has bad loss experience and high [bad] scores, we would look at that as something that, in the future, is not going to get any better. But a carrier in the same situation in terms of loss experience with good scores has better prospects.”

"It certainly adds a level of complexity to what's happening," Hathaway said. "For insurance companies, it will make good accounts better and bad accounts worse. For accounts in the middle, there are pluses and minuses."

Dan Murray, vice president of research for the American Transportation Research Institute, said several insurance companies are "on the cusp" of offering premium discounts based on CSA scores.

Tommy Hodges of Titan Transfer said he expects insurance companies to require carriers to submit CSA scores, along with other pertinent data—such as mileage, range of operations and type of commodities hauled—as part of the underwriting process. He expects carriers with CSA scores "above the norm" to pay more for insurance.

Murray said the move to raise insurance limits could make insurance more expensive. "Smaller carriers may be somewhat pressed to pay for the higher coverage.”

So how does a carrier in what Doug Hathaway called “the middle” keep its rates down?

Fix the Problem to Fix Your Score

David Saunders, chief executive officer of Compliance Safety Systems in Midlothian, Texas, said he advises fleets to concentrate on driver training and maintenance to achieve the best possible CSA scores.

Vehicle maintenance is one of the markers used in calculating a CSA score. "To fix your score, fix your truck." Saunders said.

Cindy Nelson, Vice President of EBE Technologies, which is marketing new software for carriers to utilize CSA information, agrees, “Previously, some companies would look at candidates and, depending on their given situation and how desperate they were, be happy with a warm body with their CDL. Obviously, with the changes that are being implemented through CSA, that's not going to be an option anymore.”

In other words, carriers will be screening out drivers with high CSA scores. How seriously will this affect drivers who also fall “in the middle?” Nelson is unsure. “The rumors of CSA driving a lot of drivers out of trucking may or may not be true; we won't know that for a few years. But it's safe to say, things will never be the same.”

A Big Impact

Clearly, that’s the only predictable thing about CSA’s impact. It will have one. How big? Well, what was the impact of that asteroid on the dinosaurs 65 million years ago? When he saw that flash and the earth shook, chances are even the dumbest dinosaur knew he was no longer in a dino-friendly environment.

Message? Evolve.

This story was drawn from articles in Transport Topics, Big Truck TV, Transportation Insurance Blog, and E Trucker..

This article is provided as a service for truckers and everyone in the trucking industry by Advance Business Capital. ABC is the first and only factoring service designed by truckers for truckers. We provide innovative financial solutions exclusively to For-Hire truckers and Freight Brokers and are proud to be the first factoring company to receive the P3 (Preferred Platinum Provider) endorsement from the Transportation Intermediaries Association.

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