.
The Quest
January 2011 - Issue 70
              
Inside this issue:
        
ISF enforcement:
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 providers
verify insurance

Revised Incoterm rules
take effect

UAE joins ATA
Carnet system

Claims corner:
Worldwide Coverage

     



                    

              
CSA motor carrier ratings now in force
  
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 injuries.

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:

  • Unsafe Driving

  • Fatigued Driving (Hours-of-Service)

  • Driver Fitness

  • Controlled Substances/Alcohol

  • Vehicle Maintenance

  • Cargo-Related

  • Crash Indicator

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
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.

  • Contingent 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 negligent.

  • Errors & 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.

  • Contingent 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).


    
For more information, please contact your local Avalon office or Andriana Davis at (847) 700-8087 or at adavis@avalonrisk.com. A list of our offices may be found at www.avalonrisk.com.
             
       

Avalon Risk Management
150 Northwest Point Boulevard | 4th Floor | Elk Grove Village, IL 60007
Phone: (847) 700-8100 | Fax: (847) 700-8116

www.avalonrisk.com

ATLANTA | BOSTON | CHARLESTON | CHICAGO | HOUSTON
LOS ANGELES | MIAMI | NEW YORK | SAN FRANCISCO | SEATTLE | TORONTO


  
The Quest newsletter is published quarterly and is designed to provide critical information to the transportation and logistics industry. Subscribers to The Quest also benefit by receiving policy change notifications, special industry information bulletins, and notifications of upcoming conferences. Avalon Risk Management is not responsible for the accuracy or reliability of information contained herein. The reader/user assumes all risk in the use of such information. Privacy Policy

To subscribe to or unsubscribe from The Quest, please e-mail
marketing@avalonrisk.com.
To view prior issues of The Quest visit www.avalonrisk.com.

 

Copyright © 2005-2011. Avalon Risk Management. All Rights Reserved.