Actively managing the Safety Measurement System (SMS) scores is crucial to motor carriers, underwriters, and how risk is measured in the trucking industry.
It will only become more central to the FMCSA’s enforcement strategy as the federal government could be spending much of 2022-23 catching up on regulatory safety proposals that have been sidelined or quietly studied in the last couple years.
In 2017, it was suggested that the FMCSA should radically improve the CSA system with four main recommendations:
- Reconfigure the SMS statistical model (percentile ranking) with an “item response theory” (IRT) model that more accurately targets at-risk carriers
- Make the scoring system more transparent and easier for carriers to understand and replicate
- Depart from using “relative” metrics as the sole means for targeting carriers
- Better collaborate with state partners and other data providers to collect higher quality data, such as miles traveled and number of power units
This next year should provide more guidance to how the SMS will change with two major ideas being evaluated:
- Replacing carrier safety ratings from “Satisfactory, Conditional and Unsatisfactory” to “Fit or Unfit”
- Implementing the Item Response Theory model into SMS
Let’s take a deep dive into understanding what these SMS changes could mean and discuss where we are in the timeline.
Changing safety rating to “Unfit”
In 2016, a proposed Safety Fitness Determination (SFD) rule suggested to replace the current three-tier federal rating system of “Satisfactory, Conditional and Unsatisfactory” to a single determination of “Unfit”.
This method would determine when a carrier is not fit to operate commercial motor vehicles in interstate commerce based on:
- carrier’s performance in relation to a fixed failure threshold established in the rule for five of the agency’s Behavior Analysis and Safety Improvement Categories (BASICs)
- investigation results, or
- a combination of on-road safety data and investigation information
The proposal uses a minimum of 11 inspections with violations in a single BASIC within a 24-month period before a motor carrier could be eligible to be identified as “unfit.”
This “unfit” rating would require the carrier to either improve its operations quickly or shut down after 60 days from the rating determination.
During those 60 days, a negotiated settlement based on a carrier’s corrective action plan (CAP) is possible, but the FMCSA needs 45 of those 60 days to evaluate the CAP. This shortened period means that a motor carrier has 15 days to submit a CAP to respond to a proposed “unfit” rating.
If safety ratings are changed, underwriters will closely monitor those with “unfit” ratings and will likely increase insurance premiums at renewals or cancel current policies.
Where are we at now?
This method was quickly shot down from most trucking groups in the industry with the belief that this rule would only apply to discriminant carriers since the FMCSA lacks sufficient data on 80% of the industry.
The American Trucking Associations said they could possibly support a future proposal of this sort only after the SMS data is made “reliably indicative of individual fleet safety performance”.
In March 2022, the FMCSA plans to gather information on how it can more effectively identify “unfit” trucking companies and remove them from the nation’s roadways.
They will accomplish this by seeking public comment about the use of available safety data, including inspection data, in determining carrier fitness to operate and possible changes to the current three-tier safety fitness rating structure.
Implement the Item Response Theory model
The goal of the Item Response Theory (IRT) is to approach safety scores with a more statistical approach versus the current “variable” or “relative” metrics in measuring motor carriers.
Instead of having seven separate BASIC scores, IRT will focus the BASIC category scores and one overall “safety culture score” to prioritize carrier intervention.
The current critical data points we use to determine BASIC scores will still be the foundation of the IRT score.
However, the IRT-backed scoring system will look for patterns and assign weights and according to patterns across the industry. This should help improve the severity of the scoring system.
For example, violations in on one or two areas, with excellent scores in all other areas, will mean that the fleet’s overall score will not be too severe.
However, a fleet with mediocre scores across the board will point to safety issues, and likely trigger a compliance review.
If FMCSA makes the recommended changes, bad carriers will not be able to make mediocre safety-performance carriers look good. Everyone will have to improve their safety program or face insurance spikes as the model should reflect more risky carriers.
Where are we at in IRT development?
Originally, FMCSA officials were to decide around September 2020 on whether to adopt the Item Response Theory.
The team developing the IRT model has used several different subsets of the carrier population to test small-scale IRT models before running them on the full carrier data set.
The final test for each IRT model structure was to run it on the full set of carrier data.
According to the FMCSA, the team is now developing a communications and outreach plan to communicate study findings and next steps.
If it is demonstrated that the IRT model performs well in identifying motor carriers for alerts, FMCSA should use it to replace SMS in a similar manner to the way SMS replaced SafeStat (CSA’s predecessor).
How we keep trucking company rates down
At CNS Insurance, we assist trucking companies and haulers of all types, providing them with the best insurance rates with A or A+ rated companies along with the necessary compliance advice that comes with owning a trucking company.
Our partner, Compliance Navigation Specialists, is an industry leading compliance company that will help keep you in compliance and commercial insurance rates low.
Their DOT Compliance Specialists are well-versed in the FMCSA rules and regulations and offer a number of services for you, including but not limited to:
For more information, contact CNS at 888.260.9448 or info@cnsprotects.com.
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