Where we are now
Disaster in Japan: Avalon assists in
aid, BCP reminder
CBP updates: Bond insufficiency, new
address for mailing checks
FMCSA elimination of Cargo Insurance,
BMC-32 takes effect March 21
CSA motor carrier
ratings now in force
New ACORD form changes how logistics
Revised Incoterm rules
UAE joins ATA
CSA motor carrier ratings now
Trucking companies are now measured and
evaluated for safety under a new Federal Motor Carrier
Safety Administration (FMCSA) program, formally launched
in December 2010. Originally developed in May 2005, the
Compliance, Safety, Accountability (CSA, formerly
known as CSA 2010) program is designed to reduce
commercial motor vehicle crashes, fatalities and
CSA replaces the previous safety
rating system, SafeStat, and measures how commercial
motor carriers and drivers comply with safety rules. The
program centers on the
Safety Measurement System (SMS), which analyzes
violations from inspections and crash data to determine
a commercial motor carrier’s performance.
Under the previous system, carrier
performance was assessed in only four broad categories.
The new SMS is updated monthly and uses seven safety
categories called BASICs for evaluation, which include:
By evaluating a carrier’s safety
violations in each category, the FMCSA says it will better
identify carriers with high risk behavior and change unsafe
practices earlier. The FMCSA will conduct interventions when
necessary, including early warning letters, targeted
roadside inspections and focused compliance reviews that
concentrate enforcement resources on specific issues
identified by the SMS. The FMCSA has stated that it will begin sending about
50,000 warning letters during the next two months.
What CSA means for transportation
Brokers failing to use the new CSA system to obtain
carriers’ safety scores could expose themselves to lawsuits,
as shippers or injured third parties could allege that the
broker engaged in negligent selection. For this reason,
brokers should investigate a carrier’s safety record, claims
history and insurance status.
Brokers must also verify CSA data regularly because the
scores change monthly. Brokers must also realize that CSA
uses different analysis procedures, and carriers formerly
noted as “satisfactory” under SafeStat could be rated
differently in the SMS.
As the transportation industry evolves and new programs are
added and replaced, brokers must maintain the proper
insurance to protect themselves against lawsuits and claims
arising from cargo loss, damage and third-party liability.
Cargo Insurance provides coverage when the motor
carrier’s insurance does not pay a claim and the motor
carrier is unable to pay. Coverage is typically
triggered only in situations where the motor carrier is
Omissions Insurance protects the transportation
broker if an error or oversight in the course of
business causes a customer to suffer a financial loss. A
transportation broker should ideally obtain a combined
policy form with Errors & Omissions Insurance and
non-following form Contingent Cargo coverage. A combined
form is not the same as purchasing separate policies.
Separate policies can create both gaps as well as
overlaps in coverage.
Automobile Liability Insurance is also available to
protect transportation brokers when they are held liable
for death, bodily injury or third party property damage
claims as a result of the motor carrier’s negligence.
Avalon Risk Management specializes in
understanding the complexity of liability issues facing
transportation providers. We’ve designed our Combined
Transit Liability (CTL) program to provide a comprehensive
protection for logistics providers. Avalon’s CTL policy is
the only program of its kind endorsed by the Transportation
Intermediaries Association (TIA).