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tiffs’ attorneys. Eyeing the deep pockets of shippers and brokers, they will be citing the legal concept of “ vicarious liability,” under which shippers and brokers could be held responsible for the actions of a carrier they have hired, even if the carrier was not on their payroll and had a clean safety record at the time they performed due diligence, he said. C.H. Robinson Worldwide Inc., the nation’s largest freight broker, is embroiled in a long-running lawsuit that pivots on the “ vicarious liability” issue; so far, the case is not progressing well for the broker (see related story elsewhere in this section).

FMCSA HAS FINAL SAY ON SAFETY Industry executives hailed the agreement, saying the new language issued by FMCSA reinforces the agency’s statutory authority over highway safety and affirms the power of federal law to preempt any authority asserted by the states.

“The broker and shipper communi-
ties have been concerned that CSA 2010
would be misconstrued by courts, and
exploited by the plaintiffs’ bar, as setting
forth a ‘vicarious liability’ litmus test for
shippers and brokers in their carrier-
selection process,” said Matthew J.
Jewell, executive vice president and
chief legal officer for Forward Air Inc.,
which provides transportation and
logistics services to the air-freight and
expedited LTL market. “This settlement
reconfirms that the FMCSA is the final
and only arbiter of which motor carri-
ers are authorized to operate over our
roadways. That duty does not fall to
shippers and brokers.”
“Prior to this settlement, CSA had
confused shippers and brokers over
their duties in carrier selection under
federal law,” said Tom Sanderson, presi-
dent of Transplace, a Dallas-based
third-party logistics service provider.
The FMCSA has “affirmed that shippers
and brokers fulfill their duty of due dili-
gence by confirming that the carrier is
authorized by the agency and has suffi-
cient insurance coverage.”

Costs, regulations weigh on trucking chiefs

While the trucking industry has recovered from the depths of the recession, industry executives aren’t ready to sit back and relax. During a panel discussion at the annual NASSTRAC conference in Orlando, Fla., four senior trucking company executives said they continue to worry about rising costs and the potential for regulations that could reduce productivity.

The panel included Judy McReynolds, president and CEO of Arkansas Best Corp., parent of ABF Freight System; David Congdon, president and CEO of Old Dominion Freight Line; Bill Logue, president and CEO of FedEx Freight; and Derek Leathers, COO of truckload specialist Werner Enterprises. All except Werner are less-than-truckload (LTL) carriers.

Congdon argued that lifting vehicle weight and length restrictions
would go a long way toward alleviating some of the industry’s concerns.
Truckers have done what they can with investments in better equipment
and more efficient load and route planning, he said. “Increasing size and
weight are the only meaningful levers we have left.”
He urged shippers and carriers to support proposed legislation that
would allow states to raise the gross vehicle weight limit on trucks oper-
ating on their portions of the interstate highway system to 97,000 pounds
from 80,000 pounds. He also called on lawmakers to allow carriers to use
longer combination vehicles—especially triple trailers—more extensive-
ly around the country.

“Shippers need carriers, and carriers need financial stability,” he said. “Our costs are going up. You have a choice: greater productivity or increased rates.” Congdon said that in order to afford reinvestment, carriers must get their operating ratios—the ratio of expenses to revenues—down to 89 or 90 percent. However, the industry as a whole is at a 97 percent ratio, meaning that it incurs 97 cents in expenses for each dollar of revenue.

WORRIED ABOUT THE HOURS

The group was united in concerns that proposed revisions to the current truck driver hours-of-service (HOS) rule could severely harm productivity and prove detrimental to safety by putting more trucks on the road during peak hours.

Logue said that the proposed regulations could have a “significant impact” on driver availability and motor carriers’ capacity. “If the hours-of-service rule is adopted as planned, you will see an increase in expenses and congestion,” he said.

Leathers told the group that during the recession, the truckload industry lost as much as 20 percent of its total capacity due to bankruptcies, fleet reductions, and carriers deciding to close their doors. And he expects that there’s more to come. He said the proposed HOS rule, which among other things, would cut a driver’s actual drive time from 11 hours to 10, would reduce his company’s productivity by 4 to 10 percent. Even a small loss of productivity during a time of tight capacity could have adverse consequences for the economy, he said.

Leathers also said that as capacity tightens, he would offer trucks first to those customers that were not constantly putting freight out to bid during the recession. About 10 percent of his customers worked collaboratively with his company during the worst of the downturn, he noted. “I have an obligation to repay that,” he said. “What happened on the way down is reflected in what happens on the way up.”