Congress Signals Return to Pre-CSA Due Diligence Practices with the Fixing America’s Surface Transportation Act

Congress Signals Return to Pre-CSA Due Diligence Practices with the Fixing America’s Surface Transportation Act
Logistics Alert December 7, 2015

On December 3, 2015, Congress passed the first long-term interstate highway funding legislation in a decade.  Entitled the "Fixing America's Surface Transportation Act" or "FAST", this bipartisan legislation, when signed by President Obama, will distribute $305 billion over the next five years for use in federal and State projects aimed at improving the nation's transportation infrastructure.

Despite its main purpose as a funding mechanism, FAST also covers a wide range of issues affecting a variety of  transportation stakeholders.  Of particular interest to shippers and transportation service providers, FAST addresses the  regulatory activities of the Federal Motor Carrier Safety Administration ("FMCSA") by, among other things:

Most importantly, FAST requires changes to improve transparency in FMCSA's oversight activity, largely by targeting the data collected by FMCSA in its Safety Management System ("SMS") and FMCSA's controversial publication to the general public of Compliance Safety Accountability ("CSA") program data, in particular data pertaining to the Administration's ranking of motor carriers into safety ranking groups for audit scheduling purposes (known as “Behavioral Analysis and Safety Improvement Categories” or "BASICS").

Since CSA's implementation approximately five years ago, motor carriers, logistics service providers and shippers have had little or no concrete guidance from FMCSA on their responsibility to utilize CSA program data.  This caused a split between shippers, on the one hand, who often felt compelled to utilize the data in their carrier due diligence practices in order to avoid potential vicarious liability or negligent hiring claims, and industry service providers, on the other hand, who believed that because CSA was not a regulation or statute, it did not act to replace or modify Title 49 safety rating criteria and did not have to be utilized.  FAST has brought an end to this controversy, taking the industry back to the decades old pre-CSA practices. 

Upon FAST's signing by the President, FMCSA will remove all "information regarding analysis of [motor carrier safety] violations, crashes in which a determination is made that a motor carrier or commercial motor vehicle driver is not at fault, [and] alerts or the relative percentile for each BASIC developed under the CSA program" from the general public's view until such time as several substantial prerequisites are met.  These include the completion of a study by the National Research Council (which study must be certified by the Inspector General of the Government Accounting Office), regarding the accuracy and usefulness of CSA and SMS for calculating carrier safety.  Thereafter, there is a period for FMCSA to take corrective actions recommended in the study report.  This process is almost certain to last at least two years.

What this means to motor carriers, logistics services providers, and shippers is that, for the foreseeable future, CSA program data will not be publicly available and the due diligence dilemma that plagued the industry regarding the use of such data is temporarily resolved.  Shippers can now, as they have for decades, take comfort in their reliance on the Title 49 mandated carrier safety ratings and the objective data found in FMCSA's SAFER system, i.e., cumulative vehicle and driver out-of-service statistics, MCS-150 information, and carrier operating authority verification, among other information, when undertaking carrier due diligence; in other words, a return to pre-CSA practices.  In addition, given the protections included in FAST, it is likely that any future CSA-type programs sought to be implemented by FMSCA will be accurate, statistically supportable, well-explained, and implemented through a proper regulatory procedure.