Seven months after President Donald Trump’s English language mandate for truckers took effect and five months after the Federal Motor Carrier Safety Administration sought to purge some 200,000 non-domiciled drivers, have insurers started dropping carriers that employ recent arrivals to the U.S.?
Insurers keep a keen eye on the risk profiles of the carriers they cover.
Trump called English a “non-negotiable safety requirement for professional drivers," and Department of Transportation Secretary Sean Duffy said states were “endangering American families on the road” through sloppy processes in issuing non-citizens CDLs -- it all certainly suggests risk.
In fact, after DOT's September rulemaking raised serious questions about the qualifications and safety of non-citizen drivers, one lawyer basically described this population of drivers as a nuclear verdict waiting to happen.
Yet according to Chad Krueger, VP and managing director of the Central Analysis Bureau risk-management platform for insurance companies (part of Overdrive's parent company, Fusable), insurers are still learning.
"Insurers are certainly paying attention to it," he said of ELP violations in particular. "We've had numerous insurers reach out asking about the current and historical data."
With already more than 10,000 out-of-service violations handed down to drivers over ELP issues, the topic continues to gain traction.
"If we bring up [ELP violations or enforcement] in meetings, insurers always perk up and want to understand it more," Krueger said.
Lisa Paul, executive vice president over trucking insurance at Alliant, the one of the country's largest insurance brokers, said that insurers pay attention to ELP violations, but generally only inasmuch as they contribute to a fleet's overall OOS rate.
"If the out-of-service violation rate is more than the national average for a fleet, it produces a red alert in that category on the FMCSA site," said Paul. "This impacts trucking companies, as most insurers won’t tender a quote at all if there is a red alert and it pushes the company to non-preferred, non-standard insurance pricing, which is nearly double the preferred per-unit cost."
ELP violations don't necessarily stick out like a sore thumb, in other words, on a carrier's risk profile.
Furthermore, most issued by inspectors in the United States remain non-OOS. The 10,000-OOS-violation milestone landed in December, after just six months with the OOS option back in place for enforcement officials.
In total, 37,000-plus ELP violations have been issued nationwide, according to Overdrive's sister company RigDig, over the same time period.
(Significantly, Mexico-domiciled carriers hauling cross-border in the commercial zone are exempt from the OOS ELP violations, and likely account for a large number of the non-OOS violations. Texas issues the majority of ELP violations overall.)
Yet clearly inspectors have gotten the message, giving U.S. carriers and drivers the OOS treatment for ELP violations. In a fleet's OOS rate, they could still hold huge import for how insurers evaluate risk, likewise carriers' costs even well beyond premiums.
More OOS violations "will mean the trucking company will be subject to more truck inspections at truck stops, losing time on the road, missed deliveries and costing the carrier money in increased fuel and customer complaints," said Paul.
Shippers and brokers, too, are less likely to work with a carrier with an OOS-rate red flag.
Paul said the insurance industry wasn't exactly on board with the Trump administration's characterization of non-English speaking or non-citizen drivers.
She said she'd seen three large, independent studies with lots of mileage and telematics data that all conclude B-1 drivers, mostly Mexican citizens who cross the border, were actually safer than the average driver.
A Mexican driver working in the U.S. can make about eight times what they would back in Mexico, she said, plenty incentive not to make mistakes on the road.
"A lot of data analysis, particularly around B-1 drivers coming in from Mexico, shows that usually the drivers coming over are the cream of the crop, and are already used to driving on very difficult public roadways not usually as well lit or well paved" as in the United States, said Paul. If those drivers get into a crash, they're likely to "go back to pay scale that's tremendously less," so they tend to be careful.
Yet the B-1 driver population has remained relatively constant. They're not likely significantly represented among the 200,000 non-domiciled CDL holders from whom DOT sought to revoke CDL eligibility. Instead, many in that group had recently arrived in the country from all over the world.
An Overdrive study using data from Fusable's MC Advantage found that carriers with an ELP violation on the record were more crash-prone than those with speeding or even drug-and-alcohol violations.
As for those non-domiciled drivers, a distinct group from B-1 drivers, Paul said insurers just don't know if fleets employ them.
"It's hard for an insurer to know if the person is non-domiciled or has a fake CDL," she said.
With new state bills hoping to make it illegal and potentially a $50,000 offense to employ an "illegal alien" driver, or even place liability solely on unauthorized alien drivers in the event of a crash, insurers soon might pay more attention.
"Ultimately, insurers make their own decisions on how they act on the perceived risk and exposure," said Krueger.
