New independents, be forewarned
Many leased owner-operators who’ve noticed the post-recession demand in trucking are no doubt looking to get their own operating authority so they can keep a bigger share of the revenue they generate.
That can be a great move for many truck owners. It’s also one fraught with miles of red tape. The required planning and financial management skills are considerably more than what it takes to run a leased operation, which is no cakewalk.
Now the Federal Motor Carrier Safety Administration has added another wrinkle: new entrant regulations that took effect July 20. Frisco, Texas, regulatory consultant Leon Feazell reviewed those regs during a seminar at The Great American Trucking Show in Dallas in August.
The biggest challenge is the new entrant audit. If FMCSA finds any deficiency, the entrant has only 15 days to submit a plan of correction, not up to 60 days, as used to be allowed. “If they don’t respond in 15 days, they’re put out of business,” Feazell says.
Part 385 of the Federal Motor Carrier Safety Regulations lists 16 items for the audit, such as having a drug program, hours compliance, etc. Failing one starts the 15-day clock, Feazell says. With that much at stake, he recommends deficient new entrants use registered mail and keep copies of all correspondence.
Once you’ve passed the new entrant audit, congratulations – but don’t let your guard down. While the Compliance, Safety, Accountability program has not increased fine amounts, it has drawn more attention to violations, and they can really add up.
Feazell noted one carrier charged with about six violations, typical things like a driver without a valid medical certificate and driving after 14 hours. The total hit: $23,830. A midsize fleet could swallow this, but this carrier had only four drivers. When FMCSA weighs the amount of fines relative to the scale of your operation, he said, “They’re not interested in whether you’re making money or not.”
The best way to avoid an audit is to avoid accidents and complaints and keep your CSA record as unblemished as possible, Feazell says. That can be an unending hassle, but it’s less painful than the alternative.
To read Kevin Rutherford’s recent columns on getting your own authority, search “Dollars & Sense” at OverdriveOnline.com.