1
00:02:04.470 –> 00:02:22.790
Bill Dorfner: Well, good morning, everybody. I appreciate you, signing in today. We’ve got a few more people that are still signing in, so we’ll wait for just a moment before we get into the meat of this webinar, but in the meantime, just want to share a few things about our company, INFINITI. We are the
2
00:02:23.220 –> 00:02:24.540
Bill Dorfner: the,
3
00:02:25.050 –> 00:02:44.500
Bill Dorfner: Sorry. We have the number one online training for America’s Safest fleets. With INFINITI’s learning management system, a digital checklist, fleets see a return on safety for better CSA scores, lower operational risk, and more profit per mile. At the end of this webinar, we’re going to just have a quick poll for you to fill out.
4
00:02:44.500 –> 00:03:03.120
Bill Dorfner: And if you want to kick the tires on our system, we can get you a free trial on our system for 30 days. We have over 26 years in transportation safety with over 190 million training sessions that have been taken. Over 3.5 million people trained in 5,000 safer fleets.
5
00:03:03.420 –> 00:03:14.200
Bill Dorfner: In addition to our online training, we also do in-person safety management boot camps here in Irving, Texas. We would love to see you here at some point. Our next one is September 16th and 17th.
6
00:03:14.200 –> 00:03:27.139
Bill Dorfner: And we also have one each month in October, November, and December as well. If you want to check that out, you can go to our website, INFINITIFleetSafety.com, and look at our events page for any information on our boot camps.
7
00:03:28.320 –> 00:03:39.970
Bill Dorfner: We’re glad you’re here today. We’re going to have the chat open, so please let us know where you’re logging in from. You can type your questions in the chat or in the Q&A. This session is being recorded.
8
00:03:39.980 –> 00:03:43.920
Bill Dorfner: And our webinar will be made available for replay,
9
00:03:43.920 –> 00:04:05.559
Bill Dorfner: probably within 24 hours of this, this broadcast. Also, if you are a NATME-certified, Director of Safety or Safety Supervisor, and you need additional credits, you are eligible for this, and again, we’ll have that question in, in the poll for you at the end of this webinar. If you would like a NATME certificate, please make sure you fill that out, and we’ll get that out to you.
10
00:04:06.550 –> 00:04:20.080
Bill Dorfner: So, with that being said, I’d like to introduce our guest today. We’re here with Brandon Wiseman from Truck Safe Consulting. Brandon is a well-recognized consultant and attorney in the trucking industry.
11
00:04:20.079 –> 00:04:31.320
Bill Dorfner: And, today we are talking about the recent decision, not only in the Supreme Court, but also, the Caribbee decision that followed that after the door was opened.
12
00:04:31.320 –> 00:04:36.329
Bill Dorfner: And, which ultimately led to a $604 million verdict.
13
00:04:36.330 –> 00:04:42.040
Bill Dorfner: Again, C.H. Robinson. So, Brandon, Brandon, thank you for being here today.
14
00:04:42.040 –> 00:04:49.319
Brandon Wiseman: Hey, thanks, Bill. Always appreciate joining you and the INFINITI team for these, events, so looking forward to it.
15
00:04:50.500 –> 00:05:00.360
Bill Dorfner: Awesome. Well, you know, Brandon, I know there’s been a lot of talk about this case. I’ve been to, you know, a number of seminars and conferences since then. It’s a lot of chatter on LinkedIn.
16
00:05:00.360 –> 00:05:11.699
Bill Dorfner: Can you kind of give us just a breakdown of, like, what happened? How did we get to this point where the Supreme Court of the United States is involved, and then an over a billion dollar version
17
00:05:12.090 –> 00:05:13.849
Bill Dorfner: weight against C.H. Robinson.
18
00:05:14.170 –> 00:05:20.889
Brandon Wiseman: Yeah, I mean, you and I are both, I think, used to talking with motor carriers about
19
00:05:21.160 –> 00:05:25.779
Brandon Wiseman: The tremendous uptick in so-called nuclear verdicts over the last
20
00:05:26.160 –> 00:05:34.579
Brandon Wiseman: couple of decades, and it’s almost to a point now where we’ve, ourselves, have become desensitized to these huge
21
00:05:34.980 –> 00:05:41.300
Brandon Wiseman: Verdict awards and those types of, you know, highway accident cases involving trucking companies, but now we’re talking about
22
00:05:41.500 –> 00:05:48.560
Brandon Wiseman: Different players in the industry getting in on the action, in a bad way, which are the freight brokers.
23
00:05:48.560 –> 00:06:05.079
Brandon Wiseman: the intermediaries that sit between shippers and the motor carriers, all the freight. And so, that’s what we’re talking about when we’re talking about these types of cases. The Montgomery case, kind of the watershed case, when it comes to broker liability.
24
00:06:05.080 –> 00:06:13.319
Brandon Wiseman: That was recently handed down by the Supreme Court of the United States, earlier this year, and so…
25
00:06:13.420 –> 00:06:25.670
Brandon Wiseman: And like you said, there have been a few other important cases that have followed on the heels of that Montgomery case, but I guess starting with Montgomery, I mean, just basic facts of the case, this was a December of 2017
26
00:06:25.910 –> 00:06:28.210
Brandon Wiseman: crash in Illinois.
27
00:06:28.320 –> 00:06:40.690
Brandon Wiseman: Sean Montgomery had stopped on the shoulder of the road, had mechanical problems. Tractor-trailer, driven by a driver for Carabay Transport 2.
28
00:06:41.080 –> 00:06:48.480
Brandon Wiseman: Veered off the roadway, struck Montgomery’s truck, severely injured Montgomery, including amputation of his leg.
29
00:06:49.110 –> 00:06:51.500
Brandon Wiseman: At the time of the accident…
30
00:06:51.670 –> 00:07:03.110
Brandon Wiseman: the Carabay driver was hauling plastic pots, on a load that had been arranged by C.H. Robinson, largest freight broker in the United States.
31
00:07:03.220 –> 00:07:13.720
Brandon Wiseman: So, that kind of sets up the… that sets the stage for the issues, lawsuits filed, ends up in federal court in Illinois.
32
00:07:14.130 –> 00:07:20.580
Brandon Wiseman: Among other things, Montgomery is alleging that C.H. Robinson, as the property broker.
33
00:07:20.830 –> 00:07:28.069
Brandon Wiseman: negligently selected Carabay, the motor carrier that was hauling the freight, on the basis that
34
00:07:28.250 –> 00:07:33.789
Brandon Wiseman: Among other things, Carabay had a conditional safety rating at the time that it was selected to
35
00:07:34.010 –> 00:07:35.659
Brandon Wiseman: To haul the freight.
36
00:07:35.800 –> 00:07:55.529
Brandon Wiseman: So this case kind of works its way through the preliminary stages of litigation. Obviously, Montgomery also sues the driver and the motor carrier, but really, the case as we know it, and as we’re here to talk about today, is about the allegations against C.H. Robinson, and the negligence selection, and where that went.
37
00:07:55.530 –> 00:07:59.950
Brandon Wiseman: Essentially, C.H. Robinson defends the claim.
38
00:08:00.210 –> 00:08:18.220
Brandon Wiseman: in a way, that has been used successfully in some jurisdictions up to that point by other brokers, as this type of theory of liability had become more popular, but had also been shot down in other jurisdictions. And it’s a…
39
00:08:18.300 –> 00:08:29.289
Brandon Wiseman: A defense brought under a federal statute known as the Federal Aviation Administration Authorization Act, or F4A, as it’s more commonly known.
40
00:08:29.470 –> 00:08:31.869
Brandon Wiseman: That’s an act of Congress.
41
00:08:32.179 –> 00:08:38.069
Brandon Wiseman: That has been in place for many years, since deregulation, really. And,
42
00:08:38.340 –> 00:08:43.160
Brandon Wiseman: It has several components to it, but it essentially says that no state
43
00:08:43.270 –> 00:08:50.720
Brandon Wiseman: Can enact or enforce any law, regulation, standard, or other provision, having the force and effect of law.
44
00:08:50.910 –> 00:08:56.499
Brandon Wiseman: Relating to the rates, routes, and services of any freight broker.
45
00:08:57.060 –> 00:09:07.730
Brandon Wiseman: And so, really, that type of law is aimed at, preventing this kind of patchwork of state laws on
46
00:09:08.220 –> 00:09:12.600
Brandon Wiseman: Broker rates and routes, kind of going back to…
47
00:09:12.600 –> 00:09:28.670
Brandon Wiseman: the purposes of deregulation. We didn’t… when we deregulated the industry from the federal level, we didn’t want all of a sudden all of these, you know, potentially 50 states to jump in the mix and come up with all of the different laws and then impede interstate commerce in that way. So Congress comes up with this.
48
00:09:28.810 –> 00:09:36.269
Brandon Wiseman: Preemption law. And so, you know, it has been on the books for decades, but within the last
49
00:09:36.850 –> 00:09:38.549
Brandon Wiseman: 10 years or so.
50
00:09:38.750 –> 00:09:45.890
Brandon Wiseman: Brokers, and even motor carriers, there’s a motor carrier component to that law, too, have latched onto that as a basis to claim
51
00:09:46.680 –> 00:09:48.270
Brandon Wiseman: that a…
52
00:09:48.720 –> 00:09:56.480
Brandon Wiseman: Cause of action in a highway accident case against a broker alleging that the broker negligently selected the motor carrier.
53
00:09:56.790 –> 00:10:05.600
Brandon Wiseman: is, in effect, a law that affects the services of a freight broker and should be preempted. In other words, not allowed to
54
00:10:06.000 –> 00:10:10.850
Brandon Wiseman: move forward with that type of claim against a freight broker. And like I said.
55
00:10:11.390 –> 00:10:17.829
Brandon Wiseman: the viability of that argument caught on in certain jurisdictions. The Seventh Circuit was one of them, which is kind of…
56
00:10:18.210 –> 00:10:26.099
Brandon Wiseman: Indiana, Wisconsin, Illinois, Midwestern states, and also in the 11th Circuit, I believe, down south.
57
00:10:26.200 –> 00:10:32.580
Brandon Wiseman: But other jurisdictions did not buy into that argument, namely the Ninth Circuit, West Coast.
58
00:10:32.720 –> 00:10:38.930
Brandon Wiseman: Courts said that they didn’t think that these types of claims were preempted, and for a specific reason.
59
00:10:39.220 –> 00:10:45.040
Brandon Wiseman: If you go on to read that same statute, the F4A, there’s a specific carve-out
60
00:10:45.060 –> 00:10:58.619
Brandon Wiseman: from that preemption. That says, despite what we said about states not being able to enact these types of laws that affect the services of brokers, states are not prohibited from enacting laws related to the safety of
61
00:10:58.620 –> 00:11:05.149
Brandon Wiseman: motor vehicles operated in their state. This is the safety carve-out, or safety exception, to the F4A.
62
00:11:05.210 –> 00:11:10.560
Brandon Wiseman: And so courts in, like, the Ninth Circuit latched onto that safety carve-out and said.
63
00:11:10.730 –> 00:11:15.760
Brandon Wiseman: even if these types of claims fall under the F4A preemption.
64
00:11:15.890 –> 00:11:23.250
Brandon Wiseman: they are accepted from that preemption under this safety carve-out. These types of negligent selection claims are related to
65
00:11:23.500 –> 00:11:34.460
Brandon Wiseman: the, safety of commercial motor vehicles on our roadways, and so are not saved, or are saved, from preemption, and allowed to move on. So…
66
00:11:34.790 –> 00:11:47.860
Brandon Wiseman: That’s a long setup, but that’s… that was kind of the fight, that we were dealing with in the Montgomery case. We… Montgomery was in Illinois, the case was brought in Illinois, so they had the benefit of the Seventh Circuit.
67
00:11:48.070 –> 00:11:59.740
Brandon Wiseman: rulings, favorable rulings on F4A preemption for brokers, and so the, this ultimately makes its way back up to the Seventh Circuit. Seventh Circuit agrees with the lower courts.
68
00:11:59.740 –> 00:12:10.310
Brandon Wiseman: that C.H. Robinson, the claims against C.H. Robinson are preempted, and that Robinson can get out of the case earlier than it would have otherwise. That doesn’t mean that
69
00:12:10.310 –> 00:12:25.250
Brandon Wiseman: The courts found that Robinson was liable for negligently selecting. That’s not what was at issue. It was simply the narrow issue of whether F4A steps in and prevents these types of lawsuits against freight brokers to begin with.
70
00:12:25.340 –> 00:12:26.800
Brandon Wiseman: Long story short.
71
00:12:27.130 –> 00:12:35.890
Brandon Wiseman: This sets up that circuit split, right? We’ve got different opinions by different courts throughout the country. Those are the types of cases that the Supreme Court
72
00:12:36.010 –> 00:12:50.780
Brandon Wiseman: takes interest in, because they want to clear up any disagreement among the courts of appeals in the United States on particular issues, important issues, and so Supreme Court takes up this case.
73
00:12:50.920 –> 00:13:05.889
Brandon Wiseman: For folks who aren’t familiar with how this works, Supreme Court usually, on most issues, has discretionary review. They don’t have to take up all of the cases that get brought to them. In fact, they take up very few of the cases that get brought to them each year, so it was significant in and of itself.
74
00:13:06.020 –> 00:13:10.230
Brandon Wiseman: that they chose to take up this particular case in our industry. But they took it up.
75
00:13:10.860 –> 00:13:23.500
Brandon Wiseman: And then earlier this year, they came down with, like I said, the watershed decision. It was a 9-0 unanimous decision that sided essentially with the Ninth Circuit, and said that even if these
76
00:13:23.500 –> 00:13:35.730
Brandon Wiseman: types of negligent selection claims against property brokers and highway accidents happen to be preempted under F4A, they are saved from that preemption under the so-called safety exception.
77
00:13:36.020 –> 00:13:40.870
Brandon Wiseman: And so, unanimous decision that, essentially…
78
00:13:41.000 –> 00:13:59.369
Brandon Wiseman: removes that defense that had been available to brokers, again, in certain jurisdictions in the country, and I like to kind of think of it as an early exit ramp to these types of cases in certain jurisdictions for freight brokers. Something that gets them out of the cases fairly early,
79
00:13:59.710 –> 00:14:12.150
Brandon Wiseman: that is now gone. They no longer have access to that defense, and so, you know, they’ve got some additional exposure. And that’s kind of… that’s kind of the issue in a nutshell. That was a long-winded answer. Sorry.
80
00:14:12.460 –> 00:14:19.839
Bill Dorfner: Well, that was a great answer, and I think what strikes me the most about this case is that
81
00:14:19.870 –> 00:14:36.759
Bill Dorfner: part of it is that it was 9-0 in the Supreme Court. We’re not talking about, like, a narrow, split decision. We’re not talking about a decision that kind of fell along conservative or more liberal lines. It was 9-0.
82
00:14:36.950 –> 00:14:37.460
Bill Dorfner: Oh.
83
00:14:37.460 –> 00:14:46.860
Brandon Wiseman: Yeah, and I don’t know how much to read into that. I mean, certainly, it’s rare these days to see unanimous decisions from the Supreme Court, but
84
00:14:46.900 –> 00:14:57.290
Brandon Wiseman: But probably more so because of most of the cases they are taking up are politically charged issues that tend to split along party lines.
85
00:14:57.290 –> 00:15:13.889
Brandon Wiseman: And even though the justices are supposed to be not deciding political issues, and not letting their politics influence their decisions, it inevitably happens, and so you end up with a lot of split decisions along party lines. This issue, not so politically charged.
86
00:15:13.940 –> 00:15:26.090
Brandon Wiseman: More of just kind of a universal concern for highway safety and that type of stuff. So, we end up with a 9-0 decision. So, yeah, it is what it is.
87
00:15:26.710 –> 00:15:34.000
Bill Dorfner: Yeah, absolutely. And so, now this… this, Supreme Court decision.
88
00:15:34.240 –> 00:15:45.110
Bill Dorfner: it opens the door, to, like you said, you know, additional cases that have been brought. And so now we have, we have another case that comes into court.
89
00:15:45.110 –> 00:15:54.909
Bill Dorfner: With the lupus case. And, can you kind of go into that a little bit, as to now what happened, and how did we get to this $600 million verdict?
90
00:15:54.910 –> 00:16:13.379
Brandon Wiseman: Yeah, and just to reiterate, I want to be very clear on that Montgomery case, and I’ll say it again. So, Montgomery, the Supreme Court is not deciding whether C.H. Robinson is liable for negligently selecting the carrier in the case. They only decided that the defense that Robinson had raised in the lower courts was not available to them.
91
00:16:13.380 –> 00:16:28.359
Brandon Wiseman: So they remand the case back down the chain, and now, assuming the case doesn’t settle, it probably will settle, but assuming it doesn’t settle, or maybe it already has, I don’t know. I don’t know the current status of it, but, then there will be a battle about liability.
92
00:16:28.360 –> 00:16:49.420
Brandon Wiseman: Then discovery will come out about what steps Robinson took to actually vet this motor carrier, what the data said about that motor carrier, and then ultimately a fact finder will have to decide whether Robinson acted reasonably under the circumstances or not, and was liable for negligently selection. So that part of the case is not over.
93
00:16:49.680 –> 00:17:08.649
Brandon Wiseman: As far as I know. And that’s… that’s, that’s an important point, because then you’re right. Now we start to get cases coming off of Montgomery that start to get down that type of rabbit hole. What does it mean now that this defense is not available to brokers? What exactly are we saying that they are required to do?
94
00:17:08.730 –> 00:17:18.020
Brandon Wiseman: When it comes to selecting the motor carrier. So that’s, Interlipe versus Lupus Superior LLC. This was a…
95
00:17:18.119 –> 00:17:22.460
Brandon Wiseman: March 2021, highway accident, Jackson, Mississippi.
96
00:17:22.970 –> 00:17:25.870
Brandon Wiseman: Truck operated by Lupus Superior.
97
00:17:26.069 –> 00:17:32.829
Brandon Wiseman: Failed to stop for traffic, crashed into a line of stopped traffic, triggering a pileup and a fire.
98
00:17:33.280 –> 00:17:41.429
Brandon Wiseman: Jennifer Leip, Benjamin Brewer, Roderick Coleman are all killed, numerous others injured.
99
00:17:41.610 –> 00:17:50.919
Brandon Wiseman: C.H. Robinson was also involved in this case. They had brokered the load to Lupus Superior, the motor carrier. And so, again, we have a…
100
00:17:50.920 –> 00:18:02.559
Brandon Wiseman: a plaintiff who is arguing, among other things. Obviously, they sue everybody involved. They sue the driver, they sue the carrier, they sue C.H. Robinson as the broker. When it comes to Robinson.
101
00:18:02.690 –> 00:18:11.540
Brandon Wiseman: The plaintiffs in the Leip case are alleging that, two causes of action, two for our purposes that are important.
102
00:18:12.090 –> 00:18:17.969
Brandon Wiseman: A cause of action that is similar to the one in Montgomery, namely that C.H. Robinson
103
00:18:18.010 –> 00:18:37.790
Brandon Wiseman: negligently selected the motor carrier in the case, but then a different cause of action that is really the focus of this case, if folks are interested, but a slightly tweak on that argument, which is to say, not only did Robinson negligently select the carrier in this case, but also.
104
00:18:38.930 –> 00:18:52.640
Brandon Wiseman: C.H. Robinson was so intimately involved in the operations of that motor carrier and its driver, so controlling of the motor carrier operations, that it essentially becomes
105
00:18:52.850 –> 00:19:11.870
Brandon Wiseman: The employer of the driver in that case, and is not directly liable, not negligent in and of itself, but liable, vicariously liable for the actions of the driver, as an employer would be for any of its employees that are acting in the course and scope of their employment.
106
00:19:12.090 –> 00:19:21.919
Brandon Wiseman: So it’s a… it’s a nuance that we can explore more, because a lot of folks, I feel like, kind of miss that nuance of what exactly is the difference there.
107
00:19:22.060 –> 00:19:32.469
Brandon Wiseman: But they brought those two causes of action against Robinson in that case. Case proceeds to, to… to the jury.
108
00:19:32.470 –> 00:19:47.259
Brandon Wiseman: Robinson had raised the F4A preemption in that case. In light of Montgomery, that defense is no longer available to them, so it proceeds further into the litigation than they are used to having to go. We’re having, you know, discovery on all of these issues. Case ends up
109
00:19:47.460 –> 00:19:48.970
Brandon Wiseman: With the jury.
110
00:19:49.220 –> 00:19:52.699
Brandon Wiseman: Proceeds to trial in Dallas County, Texas.
111
00:19:52.810 –> 00:20:07.479
Brandon Wiseman: And the jury returns what is called an advisory verdict in Texas. I think that’s kind of a unique procedural thing in Texas, in favor of the plaintiffs, against C.H. Robinson and others, they apportion fault.
112
00:20:07.480 –> 00:20:18.949
Brandon Wiseman: Based on percentages in Texas, C.H. Robinson’s found negligent and also essentially an employer of the driver, and allocated 23% of the fault in the case.
113
00:20:19.010 –> 00:20:29.370
Brandon Wiseman: And, by virtue of the way we handle these verdicts, essentially Robinson is on the hook for the entire verdict of $604 million in light of this decision.
114
00:20:29.700 –> 00:20:37.440
Brandon Wiseman: This decision, as I understand it, is under appeal. C.H. Robinson has come out with a pretty strong
115
00:20:37.490 –> 00:20:48.649
Brandon Wiseman: Statement after the fact, noting that they are going to appeal this for various reasons, not the least of which is their disagreement with this borrowed employee cause of action.
116
00:20:48.650 –> 00:21:02.649
Brandon Wiseman: That was lodged against them. But in any event, as it stands now, $604 million verdict Robinson is potentially on the hook for, unless they are successful in their appeal, and able to get that number brought down, or overturned, or whatever.
117
00:21:03.650 –> 00:21:09.290
Bill Dorfner: I want to kind of dive into this borrowed employee, concept.
118
00:21:09.340 –> 00:21:27.879
Bill Dorfner: And, you know, do you know of what, like, specific things were involved in this case, where they were attributing, that to C.H. Robinson, or have you seen other instances, with brokers and carriers where, you know, that line of
119
00:21:27.980 –> 00:21:35.579
Bill Dorfner: Brokering a load, or actually having control over that person, almost as a borrowed employee, can kind of start coming into play.
120
00:21:35.910 –> 00:21:44.770
Brandon Wiseman: Yeah, I mean, it comes down to a control-like analysis, so, and just backing up real quickly, just so everyone understands that…
121
00:21:44.960 –> 00:22:03.879
Brandon Wiseman: kind of the backdrop of the basis of this type of liability is the same liability, as I said, that employers have for their employees. So this is the same reason why motor carriers themselves are automatically responsible for any accidents that their drivers cause in the course and scope of their employment.
122
00:22:03.880 –> 00:22:26.070
Brandon Wiseman: If I’ve got drivers out there operating these commercial vehicles, and my driver does something stupid and causes a bad accident, even if my hands are completely clean as the motor carrier, I’m what’s called vicariously liable for the conduct of that driver, because they’re my employee. I have control of them, even though they’re doing something stupid in this instance that I… that I
123
00:22:26.070 –> 00:22:43.879
Brandon Wiseman: you know, I was not independently negligent in the case, but I am still vicariously liable. I kind of step in his shoes in that regard. It’s called vicarious Liability, respondiat superior, you’ll hear that term, and that’s the same type of liability that we’re talking about here for C.H. Robinson.
124
00:22:43.920 –> 00:23:02.269
Brandon Wiseman: But the issue is obvious. Robinson is not the employer of this driver, right? So how do we get there? We get there through this borrowed employee, borrowed servant type theory, and it comes down to the level of control that that entity has over the negligent party.
125
00:23:02.520 –> 00:23:13.950
Brandon Wiseman: And so, you know, you’ll see this raised in some cases. The more control that the broker has over the day-to-day operations of the motor carrier, the more likely you’ll see these types of
126
00:23:14.290 –> 00:23:18.730
Brandon Wiseman: Causes of action raised in these cases, but it comes down to things like…
127
00:23:19.650 –> 00:23:28.450
Brandon Wiseman: things that you would expect a motor carrier to be doing, not so much a broker. So the more involved a property broker becomes in things like
128
00:23:28.610 –> 00:23:48.560
Brandon Wiseman: Monitoring out a driver’s hours of service, getting access to their ELD records, communicating directly with the drivers, calling them on their cell phones, and asking them where they’re at, and stuff like that. Stuff that a motor carrier is normally the one doing. The more and more of that that a broker takes on.
129
00:23:48.560 –> 00:23:56.620
Brandon Wiseman: In their capacity as the intermediary, the more likely it is that, an argument that they were…
130
00:23:56.620 –> 00:24:05.579
Brandon Wiseman: controlling that driver such that they become, essentially, their employer, the more likely they are to prevail in that type of… so it’s those types of things, those…
131
00:24:06.060 –> 00:24:11.290
Brandon Wiseman: You know, granular-type, day-to-day, operational.
132
00:24:11.540 –> 00:24:18.049
Brandon Wiseman: Meddling, essentially, in the motor carrier’s operations that really exposes them to that type of argument.
133
00:24:19.470 –> 00:24:25.060
Bill Dorfner: Yeah, and one of the interesting things about the, the light v. Lupus case is that, you know, there’s…
134
00:24:25.540 –> 00:24:30.579
Bill Dorfner: according to what I’ve read, is that the driver had actually made a call.
135
00:24:30.700 –> 00:24:42.729
Bill Dorfner: Saying that they were, either not feeling well or tired and fatigued. And instead of rescheduling the load, the driver was, you know.
136
00:24:42.920 –> 00:24:47.529
Bill Dorfner: allowed to go ahead and continue on the run. Now, I don’t have…
137
00:24:47.620 –> 00:25:05.629
Bill Dorfner: you know, all of the facts involved, so I don’t want to speculate here, but it does start to, you know, raise questions about, you know, pressuring drivers, or forced dispatch, and that kind of thing. Do you know any further about this specific case, or what would you say to carriers about that type of thing?
138
00:25:05.780 –> 00:25:22.520
Brandon Wiseman: Yeah, I’m with you. I don’t know exactly… I think C.H. Robinson has disputed that they had knowledge that the driver had reported that he was ill, and so, yeah, I don’t want to comment on that specifically, because I don’t know what the reality of the situation was. But even if that were true, even if…
139
00:25:22.820 –> 00:25:25.979
Brandon Wiseman: The driver had reported, presumably to…
140
00:25:26.210 –> 00:25:38.470
Brandon Wiseman: lupus, that he was ill and couldn’t proceed, and then Lupus maybe pulled Robinson about that fact, and Robinson… maybe said, we don’t care, do it anyway. Again, I’m just…
141
00:25:38.660 –> 00:25:47.959
Brandon Wiseman: Right. I’m just, guessing here. But anyway, even if that were true, I don’t think that goes so much to the control aspect as much as it goes to
142
00:25:47.960 –> 00:26:01.079
Brandon Wiseman: Robinson’s independent negligence at that point. Remember, we got two causes of action. We’ve got negligence… independent negligence, where we’re saying that Robinson did… had a duty to act in a reasonable way, and they breached that duty in various ways.
143
00:26:01.080 –> 00:26:09.529
Brandon Wiseman: But then we’ve also got the vicarious Liability, so I would think that would go more towards Robinson’s own independent negligence, but regardless, it is what it is, so… yeah.
144
00:26:11.150 –> 00:26:23.959
Bill Dorfner: Yeah, and one of the other interesting things that I’ve read about this case is, you know, Robinson had said, you know, even on their website, their advertised material, you know, we only hire the safest carriers.
145
00:26:24.060 –> 00:26:30.310
Bill Dorfner: And we’re talking about vetting, your carriers. Now, we’re hearing a lot about
146
00:26:30.310 –> 00:26:45.069
Bill Dorfner: How carriers are going to probably be vetted a whole lot more by, you know, the brokers that are out there now. What have you seen as far as that, you know, newer activity of brokers maybe being a little more selective about who they’re working with?
147
00:26:45.230 –> 00:26:49.590
Brandon Wiseman: Yeah, this is… this is a real thing that is happening as we speak.
148
00:26:49.710 –> 00:26:58.470
Brandon Wiseman: Brokers, particularly the large ones, are actively reviewing their existing carrier vetting processes.
149
00:26:58.470 –> 00:27:11.480
Brandon Wiseman: And determining what they need to do differently, if anything, to bolster their argument that they were not negligent in selecting the motor carriers that they ultimately tender their customers’ freight to.
150
00:27:11.580 –> 00:27:23.629
Brandon Wiseman: Because that’s ultimately the question when we’re talking about the negligent selection cause of action, like we saw in Montgomery, and like we saw as part of the LIP case, right? So, what does it mean to say.
151
00:27:24.220 –> 00:27:25.760
Brandon Wiseman: that a broker
152
00:27:25.790 –> 00:27:37.330
Brandon Wiseman: acted negligently in selecting a motor carrier. What, you know, negligence, in a nutshell, is saying that there is a legal duty imposed on a particular party to act with reasonable care.
153
00:27:37.330 –> 00:27:55.729
Brandon Wiseman: And that they breached that duty in some way, and that the breach of that duty then was the cause of the damages sustained by the plaintiff in the case. That’s negligence in a nutshell. So what does it mean to be negligent in the selection of a motor carrier? Well, the argument is that freight brokers have a legal duty
154
00:27:55.760 –> 00:28:02.219
Brandon Wiseman: to act with reasonable care in selecting the motor carriers to whom they tender freight. What does it mean
155
00:28:02.220 –> 00:28:06.280
Brandon Wiseman: to act reasonably in selecting a motor carrier. That’s the million dollar question.
156
00:28:06.280 –> 00:28:31.170
Brandon Wiseman: That’s ultimately a question for a jury in most of these cases. What would a reasonable person do under similar circumstances? And so, that standard, what is reasonable selection of a motor carrier, is what’s going to be refined in all of these cases that come up. And unfortunately, we’re in a place now where we’re just kind of guessing at what a jury will decide will be reasonable in one case.
157
00:28:31.340 –> 00:28:51.279
Brandon Wiseman: Or in another case, or that type of thing. And so, you could take some good guesses. I mean, you know, what data is available to the broker when they are looking at selecting a motor carrier, and how are they using that existing data? That’s the million dollar question that these brokers are wrestling with now. What can we reasonably do
158
00:28:51.280 –> 00:29:04.150
Brandon Wiseman: given what we know about these carriers that are in our stable of carriers, to make sure that we’re keeping the ones that are potentially risky off the roads. And so, they’re looking at things that
159
00:29:04.640 –> 00:29:06.820
Brandon Wiseman: You would expect them to look at.
160
00:29:06.940 –> 00:29:18.289
Brandon Wiseman: You know, the biggest source of data that brokers have available to them is the data that comes from the FMCSA, right? There are various data streams that the FMCSA makes available. Some of them are public, some of them are not.
161
00:29:18.570 –> 00:29:20.440
Brandon Wiseman: For years.
162
00:29:20.590 –> 00:29:28.039
Brandon Wiseman: The main things that brokers were looking at, and will continue to look at in light of these cases, are
163
00:29:28.320 –> 00:29:36.540
Brandon Wiseman: Number one, the carrier… that the carrier has a valid DOT registration, a valid DOT number, and the right operating authority.
164
00:29:36.540 –> 00:29:51.229
Brandon Wiseman: Right? That’s just… that goes without saying. That if they’re not authorized to operate, it would be negligent to use a carrier that is not… that does not have the right type of license to operate the trucks out on the road, right? So that… that’s… that goes without saying.
165
00:29:51.380 –> 00:29:55.910
Brandon Wiseman: But then digging more into the data that the FMCSA makes publicly available.
166
00:29:55.980 –> 00:30:12.930
Brandon Wiseman: Brokers have historically relied on what are called safety ratings, or safety fitness determinations. These are ratings that are issued by the FMCSA to motor carriers, but only after they have conducted a compliance review of that motor carrier.
167
00:30:12.930 –> 00:30:19.660
Brandon Wiseman: It’s a three-tier rating system many are hopefully familiar with. Satisfactory, conditional, or unsatisfactory.
168
00:30:19.660 –> 00:30:28.780
Brandon Wiseman: It’s the rating system that the FMCSA and its predecessors have had in place for decades at this point. It takes an audit to end up with a safety rating.
169
00:30:28.790 –> 00:30:43.800
Brandon Wiseman: And because the DOT is limited in resources, practically what that means is very few motor carriers in the country have a safety rating, because they have never been audited by the DOT. In fact, I think upwards of 95%
170
00:30:43.800 –> 00:30:50.979
Brandon Wiseman: of the roughly 700,000 motor carriers operating in the United States do not have a safety rating. They are considered unrated.
171
00:30:51.790 –> 00:31:09.849
Brandon Wiseman: Those that do have one of the three ratings, satisfactory, conditional, or unsatisfactory. If you get an unsatisfactory rating out of an FMCSA audit, your whole fleet gets shut down. So that’s the worst rating available. Obviously, brokers cannot afford to be using unsatisfactory carriers, right?
172
00:31:10.020 –> 00:31:28.670
Brandon Wiseman: Then what about conditional and satisfactory? Satisfactory is the highest rating available, and so brokers have historically loved the fact that a particular motor carrier has a satisfactory rating, though we can talk about why that didn’t really matter in the Leip case, right? That carrier had a satisfactory rating.
173
00:31:28.670 –> 00:31:42.439
Brandon Wiseman: But that middle tier is the one that has caused a lot of headaches over the years, the conditional rated carrier, and also the unrated carriers. But when it comes to conditionally rated carriers, a conditional safety rating issued by the DOT
174
00:31:42.570 –> 00:31:46.440
Brandon Wiseman: Means that the DOT found systemic…
175
00:31:46.560 –> 00:32:05.970
Brandon Wiseman: defects in their compliance program in the audit, patterns of noncompliance, ineffective safety management controls, but not so serious as to warrant a fleet-wide shutdown. So they get tagged with this conditional rating that is made publicly available on the DOT’s SAFER website. Anybody can look these up.
176
00:32:06.060 –> 00:32:23.639
Brandon Wiseman: And now, if I’m a broker that is evaluating whether I should tender freight to this particular carrier, and I see a conditional rating, I mean, that… that is… that is a real question that I have to wrestle with. That carrier has, in the past, been tagged with serious compliance problems.
177
00:32:23.640 –> 00:32:37.239
Brandon Wiseman: Do I… is it reasonable for me to now tender Freight to that carrier, knowing what I know about its history and its safety rating? That’s the question that they’ve wrestled with. Some brokers have taken a conservative approach and said, that’s too risky.
178
00:32:37.350 –> 00:32:51.270
Brandon Wiseman: Knowing what I know about their past. So, we’re not going to use conditionally rated carriers. Other brokers have said, if I cut out conditional carriers, that’s going to eat into my capacity too much. I have to be able to use conditional carriers. I’m going to do that.
179
00:32:51.290 –> 00:33:00.069
Brandon Wiseman: Either I’m just gonna make it a policy that I accept conditionally rated carriers, or I’m gonna impose additional conditions on them. Maybe they have to give me some kind of a…
180
00:33:00.350 –> 00:33:03.809
Brandon Wiseman: An outline of what they’ve done to correct the issues, that type of stuff.
181
00:33:04.150 –> 00:33:07.519
Brandon Wiseman: So, safety ratings is an important part of a
182
00:33:07.650 –> 00:33:11.259
Brandon Wiseman: Broker Vetting program, and has been for many years.
183
00:33:11.690 –> 00:33:30.450
Brandon Wiseman: insurance levels has obviously been a big part of that for many years. Does this carrier have the right level of insurance, or the level that I require of that motor carrier? I would say those are the big three things that have historically been viewed by a broker in their carrier selection, or their carrier vetting processes.
184
00:33:30.450 –> 00:33:39.889
Brandon Wiseman: But what about now? Has that changed now after Montgomery? And yes, we are starting to see the tide shift on this a little bit, and brokers are starting to…
185
00:33:40.040 –> 00:33:53.379
Brandon Wiseman: do more than just those main three things. They are starting to look deeper into the data. Some of the data that is not publicly available, but they get their hands on anyway, which we can discuss. Things like CSA scores.
186
00:33:53.460 –> 00:34:00.960
Brandon Wiseman: These are becoming more and more prominent in carrier vetting programs, through, brokers.
187
00:34:00.960 –> 00:34:16.920
Brandon Wiseman: Whether it be the scores directly, that maybe they require you as the carrier to provide them access to your scores, or more often than not, brokers are subscribing to these third-party services that exist out there, and these are popping up more and more nowadays.
188
00:34:17.000 –> 00:34:18.870
Brandon Wiseman: that,
189
00:34:19.280 –> 00:34:30.380
Brandon Wiseman: that are pulling in your raw inspection data. If you’re a motor carrier, all of your inspection data is publicly available. They’re pulling that in, and they’re essentially simulating your CSA scores.
190
00:34:30.550 –> 00:34:36.360
Brandon Wiseman: Your CSA scores may not be publicly available anymore, for reasons we can talk about, if anybody’s interested.
191
00:34:36.770 –> 00:34:44.800
Brandon Wiseman: But these third parties have figured out pretty good ways to estimate what your scores are, and so…
192
00:34:44.960 –> 00:34:59.849
Brandon Wiseman: You know, these are the carrier 411s, and the highways, and the carrier assures of the world. They are essentially estimating your CSA scores in addition to providing other kinds of safety and compliance metrics to their broker customers, and they’re using that data now
193
00:34:59.850 –> 00:35:07.420
Brandon Wiseman: some more than others, to decide whether you are too risky of a prospect or not to tender Freight. They’re essentially trying to…
194
00:35:07.540 –> 00:35:16.019
Brandon Wiseman: bolster their argument that they are acting reasonably in selecting the carriers that they tend to freight to. That’s what they’re doing with the data.
195
00:35:17.200 –> 00:35:35.460
Bill Dorfner: You know, it’s interesting, the concept of the satisfactory rating, and like you said, there’s only one way you can get a satisfactory rating, and that’s to actually be audited. And it’s, you know, we look at carriers that have that satisfactory rating, like, wow, they must be really good, but if you think about it.
196
00:35:36.600 –> 00:35:44.560
Bill Dorfner: There are very few reasons why carriers are ever audited, and usually it’s because they found themselves
197
00:35:44.610 –> 00:35:59.429
Bill Dorfner: as a red flag to the DOT, saying, hey, let’s go in and look at that carrier, so… That’s true. Even if you’ve got a satisfactory rating, that doesn’t mean you’ve always, you know, had all of your ducks in a row. Yeah. Whereas a lot of these unrated carriers out there,
198
00:35:59.620 –> 00:36:06.269
Bill Dorfner: Have been under the radar, possibly because they’re actually doing all the right things, but they’ve never got that satisfactory rate.
199
00:36:06.270 –> 00:36:11.399
Brandon Wiseman: Yeah, I’m just gonna come right out and say it. All of the metrics that we are using
200
00:36:11.660 –> 00:36:14.770
Brandon Wiseman: That brokers are currently using. None of them.
201
00:36:14.890 –> 00:36:16.260
Brandon Wiseman: In my opinion.
202
00:36:16.600 –> 00:36:23.180
Brandon Wiseman: have much to say at all about whether this particular carrier is safe or not. None of the available metrics.
203
00:36:23.360 –> 00:36:40.819
Brandon Wiseman: do that, because none of them were intended to tell us whether a particular carrier is safe or not. Just look at the FMCSA’s own statements on this issue over the years. I mean, they publish a statement to this effect on their CSA website that says, these scores were never intended
204
00:36:40.820 –> 00:36:45.150
Brandon Wiseman: To be used to tell whether a particular carrier is safe or not.
205
00:36:45.150 –> 00:37:03.439
Brandon Wiseman: The system is a prioritization system. It helps the DOT determine what motor carriers they should prioritize for audit. Maybe there’s some loose correlation between that and whether that carrier is safe or not, but it’s a loose correlation at best. In fact, and I’ll get back to safety ratings in a minute, but I’m on CSA scores for now.
206
00:37:03.690 –> 00:37:12.019
Brandon Wiseman: In fact, there have been numerous studies conducted over the years, I think ATRI did one, about the efficacy of
207
00:37:12.110 –> 00:37:15.210
Brandon Wiseman: CSA scores, and how…
208
00:37:15.230 –> 00:37:32.849
Brandon Wiseman: correlated they are to a carrier’s future crash risk, right? I mean, that’s essentially what we’re using them for as a broker. We’re saying, hey, this carrier has higher scores, that’s telling me that they’re more likely to be involved in a crash. That’s ultimately what we’re saying if we’re relying on these scores. Do they actually do that?
209
00:37:33.170 –> 00:37:36.140
Brandon Wiseman: Turns out, no, not so well. In fact.
210
00:37:36.520 –> 00:37:45.629
Brandon Wiseman: Atri, in their study, it’s been several years since they did this study, but found that there was an inverse correlation between the driver fitness
211
00:37:45.990 –> 00:37:54.339
Brandon Wiseman: score, and future crash risk. In other words, carriers with worse Driver fitness, CSA scores.
212
00:37:54.500 –> 00:38:00.700
Brandon Wiseman: We’re less likely to be involved in crashes than carriers with better driver fitness scores.
213
00:38:00.970 –> 00:38:08.690
Brandon Wiseman: But we’re using those scores regardless to say that a carrier is more likely to be involved in a crash, if we’re using those scores for carrier vetting purposes.
214
00:38:08.690 –> 00:38:25.300
Brandon Wiseman: just doesn’t make a whole lot of sense. But I also sympathize with brokers, because it’s the data that I have available most readily to me to make these decisions. I want to be able to rely on that data because that’s the best source of data available to me. Problem is, it just doesn’t do a great job
215
00:38:25.440 –> 00:38:38.889
Brandon Wiseman: of telling me whether a particular carrier is safe or not. So, I think we need to throw the whole system out as the basis for vetting these motor carriers. I wrote an article about this in Freight Waves a few weeks ago.
216
00:38:38.990 –> 00:38:53.989
Brandon Wiseman: What does a new system look like? I don’t know. We’re gonna have to decide that, but the systems that we have to do this now are a poor substitute for an actual evaluation of a carrier’s safety posture at any given moment, including safety ratings. To your point, Bill.
217
00:38:54.400 –> 00:38:56.500
Brandon Wiseman: Safety ratings, as you said.
218
00:38:56.790 –> 00:39:05.510
Brandon Wiseman: require an audit. And the audits happen so infrequently that even if I’ve got a satisfactory rating, maybe that rating was issued 20 years ago.
219
00:39:06.160 –> 00:39:19.070
Brandon Wiseman: And I’ve just lived with that rating. It’s not like these ratings expire, they just sit on my record. And so, am I the same carrier today that I was 20 years ago, from a safety and compliance standpoint? Maybe, but maybe not.
220
00:39:19.340 –> 00:39:32.670
Brandon Wiseman: And so, the safety ratings become stale, essentially, the minute after they are issued, right? They are a snapshot of a carrier’s compliance at the time that the DOT came in and looked at their records. That’s all it is.
221
00:39:32.670 –> 00:39:40.070
Brandon Wiseman: It says nothing about that carrier’s safety, posture, or compliance performance after the date of the audit.
222
00:39:40.070 –> 00:39:48.040
Brandon Wiseman: And so that’s the problem with the safety ratings. They’re just a snapshot. They tell us nothing about… I mean, the more recently they occurred.
223
00:39:48.330 –> 00:40:06.750
Brandon Wiseman: the more likely it has some bearing on the carrier’s actual safety posture. But the older they get, they become virtually worthless for assessing a motor carrier’s compliance, let alone safety. And so, I think this is one of the reasons we saw that play out in the LIP case, right? That motor carrier, lupus in that case, had a satisfactory safety rating.
224
00:40:06.840 –> 00:40:15.950
Brandon Wiseman: And in fact, the DOT had come back in and done subsequent audits of them and had not changed their rating from satisfactory. They left it as satisfactory.
225
00:40:16.140 –> 00:40:28.330
Brandon Wiseman: And so, Robinson, relied on that, in part, to determine that this was a reasonable move to tender freight to that carrier. In fact, in addition to that, I think the evidence showed that
226
00:40:28.540 –> 00:40:33.729
Brandon Wiseman: Robinson had tendered, like, 270 loads to that carrier in the past without incident.
227
00:40:33.950 –> 00:40:49.999
Brandon Wiseman: And so, from a broker’s standpoint, if I can’t rely on those types of facts, what can I rely on, really, to determine whether this carrier is safe or not? And again, that’s the million dollar question that we don’t have a great answer for. Everybody’s scrambling to find the answer for. I just think we’re looking in the wrong places for it.
228
00:40:51.440 –> 00:41:04.069
Bill Dorfner: Yeah, and you know, having been in the insurance industry for the last few years until, you know, coming and joining the INFINITI team, I haven’t had a chance to, you know, talk to hundreds of different, safety managers and seeing, you know.
229
00:41:04.100 –> 00:41:20.359
Bill Dorfner: companies with great CSA scores, but then you get in there and you start talking to them, and it looks like a train wreck. Or vice versa, you know, you go into a place and maybe they’ve got, you know, a couple of basic alerts, but everything seems to be, you know, right in order.
230
00:41:20.360 –> 00:41:44.200
Bill Dorfner: You know, and insurance companies are taking a look at those CSA scores, they’re also looking at your loss runs and your claims frequency. They’re also looking at your telematics now. A lot of insurance companies are doing that. What additional things do you maybe see some brokers starting to look at? Do you see them maybe starting to take a similar approach as what the insurance companies have taken, and looking at your training, your losses, all that stuff?
231
00:41:44.600 –> 00:42:01.369
Brandon Wiseman: Yeah, and if not so directly, then more and more through some of these third-party services that they leverage to help them do their vetting, right? Some of these services are now requiring ELD connections from the motor carriers that are going to participate in the network of available carriers.
232
00:42:01.370 –> 00:42:06.210
Brandon Wiseman: they have to connect their ELD, and so now those third-party systems have…
233
00:42:06.210 –> 00:42:24.340
Brandon Wiseman: you know, potential visibility into the driver-level hours of service metrics. Maybe they’re not using them for that purpose currently, but they potentially have that type of… that level of access. And, you know, you ask about other metrics. So the other metrics that I’m seeing more and more brokers rely on are out-of-service rates.
234
00:42:24.340 –> 00:42:35.790
Brandon Wiseman: Out-of-service rates are publicly available. These are… you can look these up for any regulated motor carrier by going to the SAFER website, or the SMS website, and seeing
235
00:42:35.800 –> 00:42:50.140
Brandon Wiseman: How many times the vehicles and or the drivers have been placed out of service, meaning stopped from continuing to operate because of a serious violation, whether it be an hours of service violation, or
236
00:42:50.140 –> 00:43:02.750
Brandon Wiseman: some kind of maintenance violation, or a licensing issue. These are the most serious types of violations, the ones that are deemed out of service. And your rate, meaning how many of these you are incurring per
237
00:43:02.750 –> 00:43:15.960
Brandon Wiseman: Based on your number of inspections, so your number of inspections is the denominator, and how many, how many times your driver or your vehicle was placed out of service is the numerator, and that dictates what your out-of-service rate is.
238
00:43:15.960 –> 00:43:24.450
Brandon Wiseman: You are assigned out of service rates in a driver, vehicle, hazmat, and then intermodal equipment provider.
239
00:43:24.480 –> 00:43:25.760
Brandon Wiseman: And so…
240
00:43:25.870 –> 00:43:43.220
Brandon Wiseman: Alongside your out-of-service rates, the DOT also publishes the national averages for these out-of-service rates. For the driver factor, Bill, you’re gonna have to help me with this, driver is usually around 5%, something like that, I think, and then the vehicle is usually around 23%.
241
00:43:44.160 –> 00:43:46.099
Brandon Wiseman: Just stop and think about that.
242
00:43:46.360 –> 00:43:57.349
Brandon Wiseman: 23%, nearly a quarter of the commercial vehicles operated on our highways, have some kind of out-of-service condition at any given moment. That’s scary to think about, but that’s the reality.
243
00:43:57.350 –> 00:44:07.749
Brandon Wiseman: That’s been the national average for many years. It floats right around there. But in any event, the fact that your out-of-service rates are published right there alongside the national averages may… is an easy metric.
244
00:44:07.940 –> 00:44:27.320
Brandon Wiseman: for brokers and shippers to latch onto and just say, hey, if you’ve got out-of-service rates that exceed the national averages, that’s too risky of a proposition for me to hand freight over to you. That comes with its own problems, right? For example, work with a lot of carriers that are relatively small. I mean, but not…
245
00:44:27.400 –> 00:44:40.379
Brandon Wiseman: not one truck, I mean, even a 10-truck fleet may not have much inspection activity, right? And so, if you’ve got a low denominator in that equation, then one out of service
246
00:44:40.720 –> 00:44:47.870
Brandon Wiseman: order from roadside is gonna jack up your score, right? If I’ve only… if my trucks have only been inspected twice.
247
00:44:47.960 –> 00:45:03.659
Brandon Wiseman: and one of them was placed out of service, I’ve got a 50% vehicle out of service rate, well above two times the national average. So if you’re just looking at that number, standing alone, and not considering the data that’s flowing into it, then then…
248
00:45:03.720 –> 00:45:09.859
Brandon Wiseman: You are causing problems for the carrier, and you’re not really understanding what it is you’re doing with the data.
249
00:45:10.080 –> 00:45:28.159
Brandon Wiseman: So that’s one metric that I’m seeing more and more brokers use, are the out-of-service rates, certainly CSA scores, certainly safety ratings. I’m starting to see brokers get even more granular with it, and looking at, like, your accident rate, how many accidents have you incurred per million miles that your fleet has traveled.
250
00:45:28.160 –> 00:45:32.460
Brandon Wiseman: That’s a… that’s a metric that’s used by the DOT in, in an audit.
251
00:45:32.510 –> 00:45:34.039
Brandon Wiseman: But it’s not…
252
00:45:34.120 –> 00:45:41.319
Brandon Wiseman: necessarily publicly available, it takes some calculation to figure out, so that’s one metric that may become more prominent.
253
00:45:41.790 –> 00:45:56.499
Brandon Wiseman: But then, to your point, I mean, starting to get more and more in the weeds into the motor carrier’s operations, including with those ELD connections, including some… and some of this also bleeds into the whole freight fraud.
254
00:45:56.560 –> 00:46:16.269
Brandon Wiseman: arena, too, right? Because brokers, in addition to the highway accident exposure, always have had this kind of freight fraud issue, and the double brokerage, and, you know, the cargo claims liability, and that type of stuff that they have to be worried about as well. And so, some of these, new things that they are doing
255
00:46:16.810 –> 00:46:23.290
Brandon Wiseman: you know, may have a dual purpose. Maybe they are also… they are helping them to assess their
256
00:46:23.530 –> 00:46:31.369
Brandon Wiseman: highway accident exposure, but also helping them to mitigate their cargo claims liability. That’s where ELD
257
00:46:31.570 –> 00:46:51.439
Brandon Wiseman: issues tend to live. So, all of that is to say that they are getting more in the weeds on this type of stuff, and that runs them into that second theory of liability, and so it’s kind of the damned if you do, damned if you don’t, right? Because you don’t do anything, you put your head in the sand as the broker, you run the risk of the negligent selection type claim.
258
00:46:51.500 –> 00:47:07.150
Brandon Wiseman: you do a ton of stuff, and you start meddling in the motor carrier’s operations, and you essentially become the motor carrier. Now you run the risk of the vicarious liability type claim. So you gotta find the happy medium, somewhere in between those two, where you are doing enough.
259
00:47:07.200 –> 00:47:18.790
Brandon Wiseman: To make a good faith argument that you have acted reasonably in vetting the motor carriers, but not so much that you effectively become a motor carrier, such that you are vicariously liable for the conduct of the driver.
260
00:47:20.090 –> 00:47:33.780
Bill Dorfner: Yeah, and I think that’s an important point, that, you know, the brokers can only go so far, in saying, hey, in order for us to use you, you have to do this, have to do this, have to do that. You know, on the carrier side.
261
00:47:33.970 –> 00:47:40.999
Bill Dorfner: Obviously, you want to make yourself as appealing to brokers as possible, so, you know.
262
00:47:41.330 –> 00:47:59.709
Bill Dorfner: you can also sell yourself to the broker without forcing them to ask those questions. You can tell them, hey, we’re, you know, implementing, we put cameras and all our things. We’re using technology in our trucks and our vehicles. We’re using, you know, regular training on a regular basis, to just start
263
00:47:59.710 –> 00:48:05.999
Bill Dorfner: Making yourself more appealing to these brokers, because there is, like you said, there’s only so far they can go without, you know.
264
00:48:06.000 –> 00:48:06.370
Brandon Wiseman: Yeah.
265
00:48:06.660 –> 00:48:09.420
Bill Dorfner: Fall into that employer category.
266
00:48:09.420 –> 00:48:28.320
Brandon Wiseman: Yeah, and I think that’s the big takeaway for carriers. I have a lot of carriers asking us, hey, what are the implications of these cases for us as fleets? I think the implications are that more and more eyeballs are going to be on your compliance data than ever. And, number one, if you don’t know how to access your own data.
267
00:48:28.480 –> 00:48:52.209
Brandon Wiseman: That’s where you need to start. You need to understand where your metrics are, and what they are saying about your fleet. Because it becomes your marketing push nowadays, right? If more and more eyeballs are gonna be on this data, I need to make sure that the data is saying something positive about my fleet. And if there are any problems in the data, that’s just gonna cost me potential business that I could have had otherwise, so…
268
00:48:52.210 –> 00:49:00.399
Brandon Wiseman: It’s like triage time for your compliance metrics, and looking at your CSA scores, and certainly looking at, you know, if you’ve lived…
269
00:49:00.590 –> 00:49:24.300
Brandon Wiseman: If you’re a for-hire carrier and you’ve lived with a conditional rating, I’m just gonna go ahead and say it right now, that is gonna be a line in the sand now. You’re gonna have very few brokerage opportunities now, after these cases where they’re gonna be okay with a conditional rating. Even if you’ve taken steps after the fact to fix the issues, if you haven’t gone to the length of actually petitioning the DOT for an upgrade to that rating.
270
00:49:24.320 –> 00:49:28.060
Brandon Wiseman: Then you’re just gonna lose out on business, because it is too risky now.
271
00:49:28.100 –> 00:49:35.160
Brandon Wiseman: for brokers to be tendering freight to a conditionally rated carrier. In most cases, that’s going to be the case. So…
272
00:49:35.160 –> 00:49:58.400
Brandon Wiseman: Understanding where your data lives, accessing it, looking at it, looking for trends in the data, looking for areas where you can improve, that’s gonna be your market differentiator, and that’s what you’re gonna use to market yourself to these brokers. So, that’s the takeaway for you, is understand your data, understand what it’s saying about your fleet, and do something about it if it has something bad to say about you in a particular area.
273
00:49:59.770 –> 00:50:10.419
Bill Dorfner: We have a question in the queue, and I think it ties in well with, you know, the Supreme Court basically saying, you know, the states have a right to, you know, determine
274
00:50:10.450 –> 00:50:27.610
Bill Dorfner: their own safety, you know, their requirements for safety. And we’ve also just talked about, you know, how we have to go beyond that CSA data that’s available to anybody with a USDOT number. The question in the queue is recommendations as far as vetting intrastate carriers
275
00:50:27.610 –> 00:50:36.009
Bill Dorfner: That don’t have a USDOT number, and, you know, you talked about, you know, re… using the telematics information, looking at,
276
00:50:36.150 –> 00:50:50.970
Bill Dorfner: you know, some other things. Obviously, they’re not going to have those hours of service rates, they’re not going to have the CSA Basic scores. Do you see a reason for carrier… for brokers to vet any differently if it’s interstate or interstate?
277
00:50:51.440 –> 00:50:54.289
Brandon Wiseman: Yeah, I mean, you have to, right? And it makes it a lot tougher.
278
00:50:54.330 –> 00:51:17.249
Brandon Wiseman: Because you don’t have access to the metrics that you would have for an interstate carrier, even though I disagree that the metrics have anything to say, really. The reality of the situation is it’s going to become industry standard to look at that data for interstate carriers. For intra-state carriers, my first question would be, why don’t they have a DOT number? Because it is certainly the case that most states in the country require an intra-state-only DOT number.
279
00:51:17.340 –> 00:51:24.860
Brandon Wiseman: Assuming we’re talking about vehicles that exceed the weight thresholds of that particular state. And so I would want to make sure…
280
00:51:24.860 –> 00:51:44.519
Brandon Wiseman: that if I’m looking at a potential carrier partner intra-state, and they’re telling me I don’t have a DOT number because I don’t need one intra-state, I would want to be sure that they’re correct in their assessment of that, first and foremost. Because if it turns out that their state actually does require an intra-state-only DOT number, and they don’t have one, that would obviously be a very bad thing.
281
00:51:44.520 –> 00:51:45.640
Brandon Wiseman: fact for me.
282
00:51:45.640 –> 00:51:56.109
Brandon Wiseman: In that particular case. And so, assuming, then, that they are in a state that doesn’t require an intra-state DOT number, then where do we look beyond that?
283
00:51:56.110 –> 00:52:08.960
Brandon Wiseman: I don’t know where to turn you, unless that particular state has their own kind of databases that have this type of data. If they don’t have that type of thing, then I think you’re gonna have to get what you need to get from the carrier directly to
284
00:52:08.960 –> 00:52:15.520
Brandon Wiseman: satisfy you that it is reasonable for you to tender freight from them. And maybe that includes
285
00:52:15.520 –> 00:52:38.780
Brandon Wiseman: some kind of a summary of what they’re doing to make sure that their drivers are safe. Hey, what are you getting from these drivers in terms of copies of their licenses and their motor vehicle reports? What are you doing to vet your drivers? What’s your maintenance program look like? Maybe it’s just that. Maybe it’s just a simple questionnaire like that, where you are asking them about key aspects of their safety programs.
286
00:52:38.780 –> 00:52:51.629
Brandon Wiseman: that gets you at least some information that you could have in your back pocket, God forbid you ever need to argue that you acted reasonably in selecting this motor carrier. I don’t think it would be reasonable to just put your head in the sand and say, well.
287
00:52:51.690 –> 00:52:55.129
Brandon Wiseman: you know, DOT number not required, so…
288
00:52:55.420 –> 00:53:04.679
Brandon Wiseman: I don’t have to do anything to make sure that this carrier’s safe. So, yeah, you’re gonna want something. What that is kind of depends on what’s available to you in that particular state.
289
00:53:05.630 –> 00:53:12.579
Bill Dorfner: Sure, and of course, from our standpoint at INFINITI, we would ask, you know, what are you doing to train your drivers? Are you just, you know…
290
00:53:13.050 –> 00:53:32.859
Bill Dorfner: giving them the keys to the truck because they’ve got, you know, a couple of years of experience, or you’re actually doing some onboarding, continuing training, corrective action training, that kind of thing? You know, show us… show us what you’re doing to vet your drivers and to monitor what they’re doing, even though you don’t have that DOT requirement.
291
00:53:32.860 –> 00:53:54.249
Brandon Wiseman: Yeah, that, and then obviously, I mean, that goes without saying, and I’ve kind of skipped over it, but I can’t overstress the importance of having good contracts with these carriers, whether they’re intrastate or interstate, doesn’t really matter, with appropriate representations and warranties from the motor carriers as to what they’re doing from, you know, complying with applicable law.
292
00:53:54.250 –> 00:54:18.089
Brandon Wiseman: And that type of stuff, and also appropriate indemnification in those contracts. All of that is crucially important, in addition to verifying that the carrier has the requisite level of insurance, or whatever kind of insurance you’re going to require of them. Those are, you know, like I said, goes without saying, those are the most important things you could do at the start, and then going the next level is kind of what we’re talking about here.
293
00:54:18.910 –> 00:54:19.560
Bill Dorfner: Sure.
294
00:54:20.160 –> 00:54:36.339
Bill Dorfner: Yeah, you know, Brandon, this has been, you know, fascinating stuff, and obviously, again, it’s been all over, you know, LinkedIn, every safety seminar, every conference I’ve been to, it’s been a huge, huge topic. You know, and I think what it really boils down to is
295
00:54:36.340 –> 00:54:40.480
Bill Dorfner: That, you know, regardless of what industry you’re in.
296
00:54:40.480 –> 00:54:50.689
Bill Dorfner: Safety has to be paramount, and safety doesn’t just happen. You don’t just happen to get lucky and operate safely. There’s a whole lot that goes into it, and
297
00:54:50.820 –> 00:54:52.209
Bill Dorfner: You know, we…
298
00:54:52.470 –> 00:55:04.120
Bill Dorfner: it’s very hard to measure. Federal Border Carrier has certainly tried to do it, and I think we would agree that maybe not 100% successfully in doing so, but
299
00:55:04.120 –> 00:55:14.430
Bill Dorfner: You know, from every standpoint, the carriers need to make themselves as safe as possible, and to be as attractive as possible to the brokers.
300
00:55:15.100 –> 00:55:21.840
Bill Dorfner: Brokers need to do some due diligence to make sure they’re using the safer carriers, you know, and
301
00:55:22.480 –> 00:55:26.840
Bill Dorfner: avoid the courtroom in the first place.
302
00:55:26.840 –> 00:55:27.230
Brandon Wiseman: Yeah.
303
00:55:27.230 –> 00:55:28.629
Bill Dorfner: I think is what we’re looking at.
304
00:55:28.630 –> 00:55:33.059
Brandon Wiseman: Yeah, I mean, yes, in a nutshell, that’s what it comes down to.
305
00:55:33.260 –> 00:55:46.629
Brandon Wiseman: You know, this is all kind of a moving target, like I said earlier, at the moment, so what does it mean for a broker to act reasonably in their vetting standards? That’s going to be refined over the years, so this is not something that you can just
306
00:55:46.830 –> 00:56:04.770
Brandon Wiseman: put a pin in right now and say, this is… this is the standard. That’s just not where we’re at. And, you know, we may see future developments. We’ve seen a lot of, interest groups petitioning either Congress or the FMCSA to step in and help give brokers a more objective way to
307
00:56:04.880 –> 00:56:14.039
Brandon Wiseman: select the motor carriers. I think the TIA has petitioned the FMCSA to release what it calls a high-risk motor carrier list.
308
00:56:14.050 –> 00:56:23.000
Brandon Wiseman: that the FMCSA uses to help it figure out who it’s going to audit. Essentially means carriers with 3 or more basics in alert status, I think.
309
00:56:23.000 –> 00:56:31.099
Brandon Wiseman: That list is not publicly available. I think TIA has petitioned for that as kind of a proxy for safe carriers.
310
00:56:31.100 –> 00:56:53.859
Brandon Wiseman: So, we may see that type of stuff. Over the years, we’ve seen some folks lobby Congress for what they call, like, a national hiring standard, some kind of federal legislation to set what is reasonable in selecting motor carriers. So, my point is, just if you’re a motor carrier or a broker, just be on the lookout and keep up with industry news on all of these topics to kind of get the latest and where it stands.
311
00:56:55.080 –> 00:56:56.410
Bill Dorfner: Absolutely.
312
00:56:56.410 –> 00:57:18.119
Bill Dorfner: Well, I know we’re up on time. Brandon, I appreciate you helping us keep up on the latest with this, as it’s been a pleasure to work with you on here, and you’ve always been a great partner with INFINITI. So, thank you so much for your time. Everybody, thank you for jumping in today and tuning in, and we hope to see you at our next webinar as well. So, thank you all so much.
313
00:57:18.120 –> 00:57:18.670
Brandon Wiseman: Thanks, everyone.
