The High Cost of NonCompliance
posted in Alerts, Blog, Uncategorized by Brian Gray
The High Cost of Non-Compliance: FMCSA Safety Regulations for DOT Drivers
A look at noncompliance from 2007 – 2014
As most of you know, the trucking industry is highly regulated. This includes driver logs, safety equipment, fuel taxes, inspections and more covering all aspects of operating a truck. Most of you also know the costs associated with being in regulatory compliance. But what is the cost for DOT Non-Compliance?
There are many variables that can enter into calculating the cost of non-compliance. This includes fleet size, types of trucks, truckload vs. less than truckload, regional and long haul, etc. Let’s take a look at some of the ways we can calculate cost of non-compliance.
Fines for Non-Compliance
The Federal Motor Carrier Safety Administration (FMCSA) lists the Closed Enforcement Cases nationwide and includes the USDOT number, name of carrier, carrier city and state, FMCSR violation(s) resulting in an enforcement action, and the total amount settled in the reports. So what are the total fines settled by the FMCSA from 2007 – 2014 nationwide for safety violations? Take a look at the table below:
Source: FMCSA, data updated quarterly*
You are reading this correctly. On average, DOT regulated trucks, buses and motorcoach companies have paid over $27 Million in fines for driver non-compliance annually across the nation. If we break the data down further, the average fines per case for non-compliance is $5,074! In 2011, another costly violation was the transportation of hazardous materials (HazMat) without the appropriate paperwork. HazMat fines averaged $8,578.
Source: FMCSA, data updated quarterly*
Out-of-Service Costs
This data leads directly to the lost revenue from drivers and vehicles being placed out of service for non-compliance. Each hour of down time can cost up to $87.50 when you consider an average speed of 50 mph and revenue of $1.75 per mile. Being placed out of service for 10 hours due to a driver log violation can cost upwards of $870.00.
Additionally, the cost for out of service roadside vehicle violation repairs can be three to five times the cost of the repair being performed at the home terminal. Add to this cost the lost driving time with the driver having to use on duty time to complete these repairs. Finally, out of service delivery delays may make the noncompliance violation costs skyrocket, especially with time sensitive loads like produce.
The Cost of Lawsuits
According to Rob Moseley, head of the transportation department at Smith, Moore, and Leatherwood, “juries are relatively accepting of truck drivers who make mistakes. Juries are much less forgiving when safety issues are ignored.” He added, “A trucking company gets to explain two problems or inconsistencies to the jury. After that, the jury doesn’t listen and will punish the trucking company with damages.”
Not only will the carrier pay for damages but the costs associated with the legal defense. Attorneys, additional experts, and depositions can add tens of thousands of dollars to the cost of noncompliance.
Additional Costs
Further still, there are other costs associated with non-compliance. These may include the increase in number of inspections, more detailed inspections, the impact on insurance rates, and the loss of business due to poor CSA scores.
Simply, carriers do not want to get caught out of compliance. Investing in compliance will save you time, money, and save you from the headaches involved with these violations. Have more questions about the costs of compliance or want to learn more about best practices for DOT compliance? Connect with us and use us a resource! LinkedIn or Email
