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76–484 2012

IS FMCSA’S CSA PROGRAM DRIVING SMALL 

BUSINESSES OFF THE ROAD? 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JULY 11, 2012 

Small Business Committee Document Number 112–077 

Available via the GPO Website: www.fdsys.gov 


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HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

CHUCK FLEISCHMANN, Tennessee 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, General Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

Page 

OPENING STATEMENTS 

Hon. Allen West ....................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

Bill Bronrott, Deputy Administrator, Federal Motor Carrier Safety Administration, Washington, DC ...................................................................................... 3 

Daniel A. Miranda, CEO, Hit Em Hard Transportation, Elverta, CA ................ 18 

Jeff Tucker, CEO, Tucker Company Worldwide, Cherry Hill, NJ ....................... 22 

Michael Belzer, Ph.D., Associate Professor, Department of Economics, Wayne 

State University, Detroit, MI .............................................................................. 24 

Anthony Gallo, Senior Analyst, Wells Fargo Securities, LLC, Baltimore, MD .. 20 

APPENDIX 

Prepared Statements: 

Bill Bronrott, Deputy Administrator, Federal Motor Carrier Safety Administration, Washington, DC ..................................................................... 33 

Daniel A. Miranda, CEO, Hit Em Hard Transportation, Elverta, CA ......... 47 

Jeff Tucker, CEO, Tucker Company Worldwide, Cherry Hill, NJ ............... 56 

Michael Belzer, Ph.D., Associate Professor, Department of Economics, 

Wayne State University, Detroit, MI .......................................................... 68 

Anthony Gallo, Senior Analyst, Wells Fargo Securities, LLC, Baltimore, 

MD .................................................................................................................. 123 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Materials for the Record: 

Alliance for Safe, Efficient and Competitive Truck Transportation Statement for the Record ...................................................................................... 127 

Summary and Analysis of FMCSA’s Evaluation of the CSA Operational 

Model Test ..................................................................................................... 131 

American Trucking Association Statement for the Record ........................... 136 

Advocates for Highway & Auto Safety Letter for the Record ....................... 143 

ATA’s Top Concerns with FMCSA’s Compliance, Safety, Accountability 

Program ......................................................................................................... 146 

Letter for the Record in support of H.R. 4348 ............................................... 153 

Road Safe America Letter for the Record ....................................................... 155 

Truck Safety Coalition Letter for the Record ................................................. 156 


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IS FMCSA’S CSA PROGRAM DRIVING SMALL 

BUSINESSES OFF THE ROAD? 

WEDNESDAY, JULY 11, 2012 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 1:07 p.m., in room 2360, 

Rayburn House Office Building, Hon. Sam Graves (Chairman of 

the Committee) presiding. 

Present: Representatives Graves, Chabot, Mulvaney, Landry, 

Herrera Beutler, West, Hanna, Hahn, and Vela ́zquez. 

Mr. WEST [presiding]. The hearing is now called to order. I would 

like to think the witnesses for appearing today on two issues critical to small businesses and our Nation’s economy: Commercial 

highway vehicle safety and the efficient and affordable transportation of goods. 

The vast majority of commercial motor vehicle firms in operation 

today are small businesses operating 20 trucks or less. I think witnesses testifying here today on behalf of these firms, and all members of the committee believe that increasing highway safety is 

critically important. 

Annually, Congress authorizes hundreds of millions of dollars to 

be spent on public education campaigns and Federal and State and 

local law enforcement partnerships for the sole purpose of keeping 

our Nation’s highways safe. These efforts have achieved significant 

results. Overall, highway fatalities are down despite year over year 

increases in the amounts of miles driven by American motorists. 

These declines have been especially pronounced in the highway 

freight industry. 

Between 2005 and 2010, fatal accidents involving large commercial motor vehicles declined by more than 26 percent. While there 

is always room for improvement, it is clear that government and 

private industry efforts to improve safety are having a positive effect. 

The purpose of today’s hearing is to examine how the Federal 

Motor Carrier Safety Administration’s Compliance Safety Accountability program, also known as CSA, affects small businesses in the 

commercial trucking industry. Of particular importance to small 

business is the Safety Measurement System component of the program, which will be the major focus of our discussion today. 

According to FMCSA, the goal of the Safety Measurement System, or SMS, is to prospectively identify those operators the agency 

believes are likely to cause a future highway accident so that it 


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may target appropriate interventions aimed at correcting their behavior. 

Unfortunately, since implementation of this program began in 

2010, a number of industry stakeholders and third party researchers have identified what they believe are serious flaws in the Safety Measurement System methodologies. These flaws not only call 

into question the ability of the CSA to achieve its primary goal to 

identify unsafe actors that cause highway accidents, but also 

whether in too many instances the new system is identifying safe 

operators as unsafe. 

Of particular concern to the committee are the significant adverse consequences that the inaccurate safety scores may have on 

trucking companies, 97 percent of which are small businesses. 

We are fortunate to have with us today witnesses who can provide important insight into how this new highway system works in 

real life and what changes may be necessary to improve it. Again, 

I want to thank them for participating, and I now turn to Ranking 

Member Vela ́zquez for her opening statement. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

The trucking industry has an enormous impact on our economy. 

According to the Bureau of Transportation Statistics, trucks only 

transport 9 billion tons of freight value of more than $8 trillion. 

The trucking industry is also composed mainly of small business 

operators. Of the 76,000 firms nationwide, 95 percent have 40 or 

fewer trucks. The large economic impact is not without risk. Over 

5,000 people are killed annually in commercial motor carrier accidents. A number of steps have been taken to improve highway safety over the years, starting in the 1930s with hours of service limitations. 

Today’s hearing will focus on the Department of Transportation’s 

newest approach, CSA 2010, to remove unfit drivers and carriers 

from the Nation’s highways. The CSA program seeks to analyze not 

only motor carriers but drivers who are at risk from a safety standpoint instead of simply reporting data which the FMCSA believes 

demonstrates the safety status of the motor carrier or the driver. 

The goal is to measure safety performance across a broad range of 

indicators, including driver fatigue and fitness, drug and alcohol 

use, past history and vehicle maintenance. 

The Federal Motor Carrier Safety Administration has argued the 

changes will have a minimal impact on the transportation industry 

while increasing highway safety and reducing casualties. However, 

some estimate the proposal could decrease the pool of commercial 

drivers by up to 10 percent resulting in higher prices on everything 

from consumer goods to raw materials. 

CSA will allow FMCSA to reach a broader spectrum of trucking 

firms than in previous safety audit programs which only focus on 

the worst of the worst of about 1 to 2 percent of motor carriers. By 

expanding oversight FMCSA will be more comprehensive in its 

scope of industry coverage and allow for intervention before more 

serious violations occur. 

Trucking firms are able to access a 5-year history of driver crash 

data and a 3-year history of roadside inspection data before hiring 

drivers. CSA will provide small carriers with a level playing field 


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to compete for the best drivers while preventing unsafe drivers 

from gaming the system. 

The program is not without its drawbacks, however, and still relies heavily on State level authorities, including the police and safety inspectors. Many trucking industry representatives contend that 

crash and inspection data is not being properly reported to the 

FMCSA, resulting in inaccurate safety scores. Critics have also 

pointed to the wide disparity in the level of safety enforcement 

among States. A trucker that happens to operate more in States 

with heavier enforcement will have a worse score than a trucker 

that happens to operate in States with lighter enforcement. Again, 

this can negatively impact both drivers and carriers when they 

compete with out-of-State firms for business opportunities. 

Today, we will examine how the CSA program is affecting small 

businesses and hear from firms that will be impacted by the 

changes. While the goal is to improve safety by reducing safe driving practices, it is imperative that the Federal Motor Carrier Safety Administration properly balance highway safety with the economic impact on small trucking businesses. 

In advance of the testimony, I want to thank all the witnesses 

who traveled here today for both their participation and insight 

into this important topic. And with that, I yield back. 

Mr. WEST. Thank you, Ranking Member. If the committee members have an opening statement prepared, I ask that they be submitted for the record. 

I would like to take a moment to explain the timing lights for 

you. You will each have 5 minutes to deliver your testimony. The 

light will start out as green. When you have 1 minute remaining, 

the light will turn yellow. Finally, at the end of your 5 minutes, 

it will turn red. I ask that you try to adhere to that time limit. 

Our first witness is Mr. Bill Bronrott, who is the Deputy Administrator for the Federal Motor Carrier Safety Administration. Mr. 

Bronrott began his service as Deputy Administrator in 2010. Prior 

to that, he served for more than 10 years as a member of the Maryland General Assembly where he was known for his strong advocacy on traffic safety issues. 

Appearing with him is Mr. Joseph DeLorenzo with the agency’s 

Office of Enforcement Compliance. He will be on hand to assist 

with any additional questions members may have. Deputy Administrator Bronrott, thank you for your appearing today. You may 

now deliver your testimony. 

STATEMENT OF BILL BRONROTT, DEPUTY ADMINISTRATOR, 

FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION; ACCOMPANIED BY JOSEPH DELORENZO, FMCSA’S OFFICE OF 

ENFORCEMENT COMPLIANCE 

Mr. BRONROTT. Thank you very much, Mr. Chairman, and Ranking Member Vela ́zquez and members of the committee. Thank you 

for this opportunity to discuss the Compliance Safety Accountability program that helps to keep the traveling public safe by raising the bar for commercial truck and bus safety. 

Safety is FMCSA’s number one priority and CSA is the centerpiece of our rigorous safety compliance and enforcement strategy. 


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This program is critical to our congressionally mandated mission to 

save lives by reducing crashes involving commercial vehicles. 

Compliance and accountability are the keys to safety, and it is 

through CSA, the agency and its State safety enforcement partners 

are able to better identify and address a larger number of motor 

carriers for safety interventions without placing an undue burden 

on small businesses. 

Our Safety Measurement System collects data on the Nation’s 

half-million active motor carriers, and we have found that the system clearly identifies the 200,000 carriers that are involved in over 

90 percent of the crashes on our Nation’s roadways. According to 

an independent analysis by the University of Michigan Transportation Research Institute, SMS is a significant improvement over 

the agency’s previous measurement system. 

We know that CSA is working. Last year, under CSA, truck and 

bus roadside inspection violations decreased by 8 percent and driver violations decreased by 12 percent. This is the largest drop in 

commercial vehicle and driver safety violation rates in a decade. 

CSA is allowing the agency to reap these safety benefits with less 

interruption to a carrier’s business operations. We are keenly 

aware that 85 percent of commercial vehicle operations registered 

with FMCSA are small businesses. Our Safety Measurement System has identified nearly the same number of small carriers for 

intervention as were identified in the previous SafeStat system. In 

fact, less than 10 percent of small truck companies exceed the 

intervention threshold in any of the BASICs. 

We are carefully listening and responding to feedback from industry, our State partners, and other key stakeholders to ensure 

we are having the greatest impact on safety while minimizing the 

effect on a carrier’s operation. FMCSA has consolidated all of its 

publicly available carrier safety performance data into one easily 

accessible CSA Web site that receives 30 million hits a year. This 

helps company owners to easily review their safety data and to 

take action to address any safety deficiencies. 

Our DataQs process allows companies to address any potential 

data inaccuracies. Currently of the 31⁄2 million safety inspections 

conducted, less than 1 percent of inspections are challenged. Prior 

to CSA, our agency safety intervention activities primarily focused 

on compliance reviews, and while compliance reviews are effective 

tools for changing unsafe operations, they are also labor and time 

intensive to both the agency and carriers. 

In order to strategically deploy the agency’s resources and effectively reach more carriers earlier, the agency now utilizes a range 

of safety intervention tools that get to the root of the cause of the 

carrier’s safety problems. Analysis has shown that these less resource intensive interventions are effective at improving carrier 

performance. 

Finally, next year, early next year, the agency will issue a notice 

of proposed rulemaking to revise its safety fitness determinations 

methodology. The rulemaking would propose better integrating 

roadside inspection data into the carrier’s safety fitness determination process. 

Mr. Chairman, members of the committee, last year alone, 4,000 

people died and 100,000 others were injured in crashes involving 


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commercial vehicles. If today’s an average day, 11 of our fellow 

Americans won’t make it home alive and another 300 will be injured. Every life is precious. One death or disabling injury is one 

too many. We need all available tools to identify unsafe drivers and 

companies so that safety deficiencies can be addressed before tragedy strikes. FMCSA is working to protect the traveling public by 

identifying unsafe truck and bus companies with the highest risk 

of future crashes. 

CSA leverages the findings of roadside safety inspections and investigations that hold carriers accountable to the safety rules of the 

road and thus far CSA is showing great progress without any new 

regulations. It is a big step forward in FMCSA’s ongoing mission 

to save lives through early intervention compliance, accountability, 

and crash reduction. 

Mr. Chairman, this concludes my remarks. I would be pleased to 

answer your questions. Thank you very much. 

Mr. WEST. Thank you, Administrator Bronrott. A couple questions I would like to present. 

First, your agency used findings from a 2007 violation severity 

assessment study to develop the SMS methodology. Have you released the results of that study as per the stakeholder request at 

this time? 

Mr. BRONROTT. The severity study? 

Mr. WEST. Yes, sir. 

Mr. BRONROTT. Let me turn to Mr. DeLorenzo on that. 

Mr. DELORENZO. Yes, we have. The results of the violations of 

the violation severity study are in the CSA docket. There is an 

open docket for CSA where all of our materials go. 

I also think it is important to point out that that study is not 

the basis of the current violation severity weights that are used in 

the SMS. There are other documents in there in addition to what 

is known as the violation severity study that also provide significant background into how those weights were determined. 

Mr. WEST. Now, have those been provided? 

Mr. DELORENZO. They are in the docket as well, sir. 

Mr. WEST. Okay. The second question. There is a small carrier 

testifying on the second panel whose BASIC score went up a year 

after initial violations and a number of clean inspections. Is there 

some, you know, explanation why that would have happened, are 

there some bugs in the system that need to still be worked out? 

Mr. BRONROTT. I think on an individual basis it is hard to say. 

I think we would want to learn more about that individual carrier’s 

experience and would be glad as always to meet with them and 

walk through that. 

Mr. WEST. Okay. Ranking Member Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. Administrator 

Bronrott, you stated at a recent Small Business Administration 

Roundtable with the trucking industry that sometime, and you just 

mentioned also today that at some point early next year you are 

going to be proposing, issuing the proposed rule. My question to 

you is will that proposed rule give small and independent carriers 

the opportunity to weigh in on CSA Safety Measurement System? 

Mr. BRONROTT. Well, as we go through that rulemaking, it will 

be obviously completely open and we will have an open docket and 


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open process by which we will be welcoming input from all of industry and all of our stakeholders, and I am sure it will be a very 

robust, you know, input. 

Ms. VELA ́ ZQUEZ. What do you mean by robust input? 

Mr. BRONROTT. Well, through any of our rulemaking processes, 

you know, we will have an open docket and that will allow anybody, any interested party to express their concerns, questions, 

ideas, on the direction that the NPRM should go. And we look forward to that. 

Ms. VELA ́ ZQUEZ. Yeah. My suggestion is that you should provide 

a vehicle in which not only it is an open docket but interaction 

around the country with these small operators, right. And if you 

have better information, the only way that you could have better 

information is by having this exchange interaction and that will facilitate to have at the end of the road a better rule. 

Mr. BRONROTT. We are eager to do that, and we will follow up. 

Ms. VELA ́ ZQUEZ. Last year, Wells Fargo Equity Research authored a report that concluded that there was not meaningful statistical relationship between the results in the unsafe driving and 

fatigue driving BASICs and crash frequency base on a sample of 

200 of the largest motor carriers. How did this compare to your 

agency’s own research? 

Mr. BRONROTT. Well our—in fact, we did respond to the Wells 

Fargo report and that, our response is on our Web site and we 

would also be glad to submit our response for the record here 

today. 

We did not agree with the conclusions of that report. We have 

repeated studies internally through the Volpe Transportation Center and also externally independently through UMTRI, the University of Michigan Transportation Research Institute, that shows 

that there is a very, very strong correlation between our SMS BASICs and crash risk. And our sample looked at tens and tens of 

thousands of carriers, large and small, and we had some issue with 

the Wells Fargo report that looked at solely 200 large companies. 

Ms. VELA ́ ZQUEZ. Okay. 

Mr. BRONROTT. So we are very comfortable. 

Ms. VELA ́ ZQUEZ. Thank you. And critics claim your new enforcement program places additional burdens on the commercial motor 

vehicle industry. Some believe it will force out as many as 10 percent of drivers in an effort to avoid detrimental carrier scores. 

Is CSA shifting the agency’s enforcement resources to disproportionately target small trucking companies? 

Mr. BRONROTT. No. We are—again, you know, the overwhelming 

majority of carriers are small businesses but they make up a very 

small percentage of those who we find to have the more serious violations that require interventions. 

Ms. VELA ́ ZQUEZ. Okay. Okay, thank you very much. 

Mr. BRONROTT. Thank you. 

Mr. WEST. Thank you, Ranking Member, but I will say that 

Wells Fargo did come back and conduct an examination with 4,600 

carriers and reached the same conclusion. 

Mr. Hanna. 

Mr. HANNA. None at this point, Mr. Chairman. 

Mr. WEST. Ms. Hahn. 


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Ms. VELA ́ ZQUEZ. Can I ask a question? 

Based on what the chairman just stated, did you respond to that 

second study? 

Mr. DELORENZO. We haven’t responded to the study. We did look 

at it and our preliminary analysis does not change our findings. In 

our response, we looked at over 40,000 carriers, all sizes, and are 

still very comfortable of the relationship between the unsafe driving BASIC and the fatigue driving BASIC and crash risk. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman, for yielding. 

Mr. WEST. Thank you. 

Ms. Hahn. 

Ms. HAHN. Thank you, Chairman West, Ranking Member 

Vela ́zquez. I think this is a very interesting hearing. This is a subject that is very near and dear to my heart, and that is our trucking industry. Particularly I have had a lot of interest in our owner 

operator small business affairs. I represented the Port of Los Angeles in Los Angeles for 10 years when I was on the city council, so 

I did a lot of work in that respect. 

You know, we passed the transportation bill. We actually have 

for the first time national freight policy language in our transportation bill. I have founded a bipartisan Port Caucus, Chairman 

West is a part of that caucus, because we think there is tremendous connection, of course, between our ports in this country, between our trucks, national freight policy and our economy and jobs. 

So we really want to take a look at all the aspects of this industry. 

I think there is a lot of variables that go into, unfortunately, crashes and fatalities involving our trucking industry. I am a big advocate for special truck lanes on freeways. I found my smaller owneroperator, well, all of them would come to me and say they don’t 

really like driving on the roads with the commuters either. They 

don’t think we know how to drive. And many times, as you know, 

a lane change by a small car, you know, can cause a massive jackknife, and by the way, which then in Los Angeles of course can clog 

a freeway for 4 to 7 hours, really slowing down commerce. So I, of 

course, want to find all possible reasons we can prevent these fatalities. 

I also was a big advocate of moving cargo off peak hours in Los 

Angeles and championed a program which was the first in the 

country, I hope some of my other port folks will look at moving 

cargo off peak so that the truck drivers can move that cargo with 

an incentive off peak hours so they don’t have to be on the same 

lanes with those who are trying to get to work in the morning or 

get home in the evening. 

But, two, I want to talk to you about a program that you mentioned, Mr. Bronrott, in your written testimony. You talked about 

you know crash weighting, identifying crashes for which a carrier 

had greater responsibility. I am curious to know if you could tell 

us how are those reviews conducted, what kind of experience do 

those folks have that review those crashes, and how they make 

that determination of who was at fault, and more importantly, are 

we gathering data on how do we prevent these kinds of crashes in 

the future? 

Mr. BRONROTT. Great questions. 


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Well, first of all, currently we do not do crash weighting, but 

what we do know is that there is a very strong correlation between 

crashes and in predicting future crashes. We are now working 

through a process by which we are looking at crash weighting as 

a way to more finely tune CSA and what we our—Motor Carrier 

Safety Advisory Committee looked at the issue of crash weighting 

this year and there really was no agreement among this very 

broadly based committee as to what direction that we should go 

with some ideas that were put on the table. There was no consensus. 

So it was essentially thrown back to us. And so we are now in 

the process where we are going to have to thoroughly study this 

because it is very important that we get it right. And so we are 

planning on releasing in July of 2013 our report. We are going to 

take this next year to thoroughly turn this inside out, and we will 

report back to you and to the safety and trucking community what 

we have found, and then from there we will know what our path 

forward is in the whole area of crash weighting. 

Ms. HAHN. Thank you. And again, and I appreciate this hearing, 

and I appreciate us kind of getting to the bottom of this. I think 

the trucking industry is really at the backbone really of the goods 

movement industry in this country, and I know for a fact a lot of 

these independent owner-operators, they have a tough row to hoe. 

I mean, these guys, particularly in areas like Los Angeles where 

the congestion is so bad, they get paid by the load, they don’t get 

paid by the hour. So sometimes they can make a one round trip 

to the port of Los Angeles to either pick up or drop off, and many 

of them talk about how they are not earning the kind of decent 

wages to actually make a real living. So we want to do whatever 

we can to support them but we also of course don’t want to compromise at all on the public safety as we embrace this industry. 

Thank you. 

Mr. WEST. Thank you, Ms. Hahn. 

Mr. Mulvaney. 

Mr. MULVANEY. Thank you, Mr. Chairman. Mr. Deputy Administrator, help me. This is a new industry for me, so help me understand the process by which you all establish these scorecards, these 

BASICs, the scores that you give to the various carriers. Walk me 

through a typical process. 

Mr. BRONROTT. Well, the previous measurement that we used 

was made up of four categories that were far more general than the 

CSA program. And so we have come up with seven categories within which we can look at a carrier’s and driver safety performance 

and that gives us a far clearer, more granular picture of what is 

going on out there so that we can make decisions about who we 

should, you know, intervene with and, you know, before a tragedy 

occurs. 

Mr. MULVANEY. What are the seven categories? 

Mr. BRONROTT. Well, they include the fatigue and compliance 

with hours of service. I have got the list here if you want. Joe, if 

you want to run down the—— 

Mr. DELORENZO. I probably won’t be able to come up with all 

seven just because you are asking me. Unsafe driving, fatigue drivVerDate Mar 15 2010 23:35 Nov 19, 2012 Jkt 076484 PO 00000 Frm 00012 Fmt 6633 Sfmt 6602 E:\HR\OC\B484.XXX B484

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ing, controlled substances, there is the crash indicator, vehicle 

maintenance. How many did I get? 

Mr. MULVANEY. Four or five. Unsafe driving. What do I have to 

do to get a bad mark on unsafe driving? 

Mr. DELORENZO. Essentially what occurs, what each of the BASICs is it is comprised of violations that are found on the roadside 

or through our investigative process. So the violations that are 

found on the roadside are uploaded by our State enforcement partners. They go up into our system, and they are then associated 

with that carrier in the appropriate category. So the example you 

used is an unsafe driving. So if a carrier is pulled over for a speeding violation, that would get loaded up and associated with that 

BASIC. Carriers are then—— 

Mr. MULVANEY. Hold on a second. Just get the ticket written or 

actually get convicted? 

Mr. DELORENZO. No. An inspection, a State inspection report 

completed. A State inspection process and a ticket written or citation are two completely separate processes. So this SMS consists of 

violations on inspection reports. 

Mr. MULVANEY. And how do I, if I get a, whatever rating I get, 

how do I get it, how do I improve my rating in the future? What 

do I have to do in order to lower my score? What steps do I have 

to take to accomplish that? 

Mr. DELORENZO. In order to lower your score, it would be the result of additional clean inspections. So the violations are, we score 

on a 24 month period. So violations drop off after that time period 

is up, they get weighted lower as time goes on and additional clean 

inspections because you are compared on a per inspection basis. So 

clean inspection reports would then also help you to lower your 

score. 

Mr. MULVANEY. If I have got a bad driver who has had two or 

three speeding things, let us say, that lowers or that raises my 

score and I fire that driver I move him some place else, does that 

help my score or not? 

Mr. DELORENZO. It does not. 

Mr. MULVANEY. And why not? 

Mr. DELORENZO. Because those violations stay in the system associated with your company as a look at your overall safety management practices. Over time they will decrease and clean inspections by your other drivers will also help to lower your score. 

Mr. MULVANEY. Wouldn’t firing an unsafe driver be a safe practice? Wouldn’t that be what you want me to do? 

Mr. DELORENZO. Yes, it would. 

Mr. MULVANEY. But I wouldn’t get credit for it. 

Mr. DELORENZO. Not until the time period passes, correct. 

Mr. MULVANEY. Okay. Interesting. 

Deputy Administrator Bronrott, you mentioned that the previous 

system that was four different categories, how did that one, why 

did you all get rid of that? 

Mr. BRONROTT. Well, again, the decision was that it was, there 

were broader categories and that we could have a, that it was time 

to look at more specific areas where we could have some intervention if need be. 


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Mr. MULVANEY. Did you use any of the same categories from the 

old system in the new system? 

Mr. BRONROTT. We did. 

Mr. MULVANEY. And the same data? 

Mr. BRONROTT. Well, I think it is all the—well, Joe is one of 

the—— 

Mr. DELORENZO. The data used in the current SMS is more comprehensive than the data that was used in SafeStat. When we went 

from 4 to 7, we also made another important change which was 

under the old system we looked at only those violations that were 

serious enough to be considered out of service violations. The current system, SMS, uses all violation data in the system. 

Mr. MULVANEY. If I get pulled over, if I am a trucker in South 

Carolina and I get pulled over by my local enforcement folks and 

they write me up for something, and I later challenge that, does 

that, how do you all treat that on my scoring, and I win. Let’s say 

they cited me for unsafe movement or some maintenance violation, 

and I convinced them that they were wrong in their initial assessment, how does that impact my score? 

Mr. BRONROTT. Well, we do have a process through which you 

can challenge it, and we work with each of the States in a process 

known as DataQs. So you can go to the respective State where the 

violation occurred, and you can challenge that. And through that 

process, it is either dismissed or not. 

Mr. MULVANEY. And the last question. But if it has been, if I 

have convinced the State folks that I was not in the wrong, does 

it automatically come off my rating or not? 

Mr. BRONROTT. It will. 

Mr. MULVANEY. Okay. Thank you, gentleman. I apologize for 

going over, Mr. Chairman. 

Chairman GRAVES [presiding]. Mr. Chabot. 

Mr. CHABOT. Thank you, Mr. Chairman. Yeah, just a couple 

questions. I assume that you have had some feedback, some criticism, some concern from people in the trucking industry, is that 

correct? 

Mr. BRONROTT. Well, we have had questions, we have had concerns, and we have also kept the phone lines open. We built a big 

table around which we have allowed those voices to be heard. So 

we have heard them, and we welcome whatever questions, concerns 

that are out there. 

Mr. CHABOT. And what are the nature of the concerns that you 

have heard from folks in the industry? 

Mr. BRONROTT. Well, they are varied, and I won’t try to characterize. 

Mr. CHABOT. That is what I am asking you to do. What are some 

of the questions that people have raised where they have said, well, 

here is something we don’t think is fair or that we think is very 

tough for us to meet or is unfair or whatever. I mean, what types 

of things. That is what I am asking you. 

Mr. BRONROTT. Well, a number of things. One thing is you know, 

the issue of the crash weighting. It has been one major question 

that has come up. 

Mr. CHABOT. You said crash weighting? 

Mr. BRONROTT. Um-hmm. 


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Mr. CHABOT. Does that mean, what does that mean exactly? If 

you have an accident, how heavily that weighs against you, and is 

that what you are talking about or something else? 

Mr. BRONROTT. Yeah, I mean that is, that is right. It is. So we 

are looking at—you know, currently we just look at involvement 

without, you know, looking at you know faults and that is not part 

of the scoring or rating, that is not part of what we do. 

Mr. CHABOT. Let me stop you there if I can to make sure if I 

heard you right. You said currently you just take into consideration 

the fact that an accident happened and that is counted against you. 

It doesn’t matter whose fault it was? Is that what you said? 

Mr. BRONROTT. Well, it is used as an indicator because we know 

from repeated studies, this is something that is very firm in the 

work that we have done over the course of the years, even prior 

to CSA with the earlier measurement system, that there is a very 

strong positive correlation between crash involvement and the 

chance of a future crash. We take it seriously. But we are, you 

know, looking at this issue of crash weighting, as I mentioned earlier, about this process that we are going through to, you know, to 

study this and to report back in a year on a path forward on that. 

Mr. CHABOT. But again, just to make sure that I understand 

what you are saying again, the fact that it doesn’t matter whose 

fault it was. It is still counted. I am a truck driver, and I stop at 

a traffic light, and somebody is not paying attention behind me or 

perhaps they are intoxicated and they crash into the back of me, 

and I have done nothing wrong. I was stopping at a red light. You 

are saying that that would be weighted against me? 

Mr. BRONROTT. Well, it—— 

Mr. CHABOT. Well, yes or no. 

Mr. BRONROTT. Let me defer to Mr. DeLorenzo just to be clear. 

Mr. DELORENZO. Yes, it is. 

Mr. CHABOT. Okay. There is the answer, yes. And if it happened 

a second time I was at another traffic light and I hadn’t done anything wrong and I am stopped there paying attention but somebody 

else is drunk behind me in another vehicle and they slam into the 

back of me, now I have had a second offense that I am held responsible for; is that correct? Yes or no. 

Mr. DELORENZO. Yes. 

Mr. CHABOT. Okay. And that is an example of some of the concern that you have had raised in the trucking community because, 

that is the first one that you raised is the accident weighting so, 

or weighing. Are there some other things that they have raised 

that they are concerned about, and I am assuming there are. And 

what would be some of the others. I have only got 51 seconds here. 

Mr. BRONROTT. Joe, do you have anything to add? 

Mr. DELORENZO. The other concerns and where we spend a lot 

of our time is on data quality and data sufficiency. So I mean there 

are always questions with the amount of data that we are always 

dealing with as to what is the quality of the data and that is when 

Mr. Bronrott in his remarks you know mentioned the DataQ system that we have available. 

Mr. CHABOT. Now, does data quality mean that they are not 

keeping adequate records under your standards; is that what you 

are meaning? 


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Mr. DELORENZO. No data quality meaning the quality of the data 

in our system. So the quality of the data that is uploaded from the 

States into our system that is used in determining their SMS 

scores, which is again—— 

Mr. CHABOT. They are concerned about that particular issue? 

Mr. DELORENZO. Yes. 

Mr. CHABOT. Okay. 

Does overweight vehicles at all, any history of having—would 

that be counted against them? 

Mr. DELORENZO. Size and weight is not included. 

Mr. CHABOT. That is not included, okay. Thank you very much. 

Chairman GRAVES. Mr. West. 

Mr. WEST. I already asked questions. 

Chairman GRAVES. Mr. Landry. 

Mr. LANDRY. How can you hold somebody accountable for something that is not their fault? Would you be willing to say, you know 

what, Congress all these studies that we embark upon and all of 

these crazy policies and regulations that we premise on these studies, if we can’t, if we don’t show proof that they work, would you 

be willing to resign? I mean, why can you all hold the American 

citizen accountable but yet we can’t hold y’all accountable. You see, 

I mean it is patently unfair for you to weight someone’s record, to 

tarnish someone’s record when it is not their fault? We have a 

court system that is designed to weigh that. 

Let me ask you a question. How do you feel about onboard data 

recorders being mandated by the Federal Government? Do you support that? 

Mr. BRONROTT. Well, the agency does. 

Mr. LANDRY. Okay. Okay. Well, let me ask you a question. You 

work for the President of the United States. Is that not correct? 

Mr. BRONROTT. Correct. 

Mr. LANDRY. So he is your boss. 

Mr. BRONROTT. Correct. 

Mr. LANDRY. See, I am used to the business world. You know the 

President of a company? That is who I report to. I usually, if he 

puts out an edict or a policy, I normally, I would think as an employee I would follow that. Do you know that the President has singled out on board recorders as costing small business over $2 billion to implement and that he believes that they should not have 

been implemented. Did you not get that memo that he sent to the 

Speaker? 

Mr. BRONROTT. Well, I am familiar with the numbers and I also 

know that—— 

Mr. LANDRY. Well, you are familiar with his position? Is his position that he supports it or he doesn’t support it? 

Mr. BRONROTT. He does. 

Mr. LANDRY. He does support it. So what he spent to the Speaker 

is basically a lie? 

Mr. BRONROTT. The OMB and our agency made it clear that there is a net gain to industry of over $2 billion a year by the implementation of EOBRs. 

Mr. LANDRY. A net gain. It is going to cost the industry, accord- ing to the President, $2 billion. And 90 percent of that industry are 

small businesses. Now the big guys, they like it. Okay. Because 


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when they—they implement it already, because their fleets are so 

large that that is a better way to manage those fleets. And of 

course when you implement it on the little guy, okay, it drives 

them out of business and the big guy gets bigger, and I am sick 

and tired of that over here. Because what happens is big corporations come up here, they convince you all to do something that they 

want to do. If they want those on board recorders that is their business. But don’t force the little guy out there who is struggling to 

make ends meet. 

Ms. VELA ́ ZQUEZ. Would the gentleman yield for a minute? 

Mr. LANDRY. The gentleman will yield. 

Ms. VELA ́ ZQUEZ. Mr. Bronrott, if I am driving my car and I am 

at a stop sign and another car comes in and hit me, will the insurance company score that against me in terms of my premium? 

Mr. BRONROTT. As a passenger vehicle driver or as a truck driver? To be honest, I don’t know the answer with respect to—— 

Ms. VELA ́ ZQUEZ. Well, I do know because I was driving but what 

I am saying is that the private sector, the insurance company will 

factor that in. There is not much difference. 

Mr. LANDRY. Reclaiming my time. I would disagree with the 

fact— first of all, the insurance companies are private contractors. 

Okay. That is a private contract between an individual and another 

company. The government is not involved in that contract. And if 

certain insurance companies penalize you when you do nothing 

wrong then you should seek out an insurance company that doesn’t 

penalize you for doing so. I don’t believe, because I’ve had accidents 

before and those accidents that were not my fault, my insurance 

company did not penalize me for that. Sure they were reported but 

they did not penalize me for somebody rear ending me. I would say 

that your insurance company is getting away with murder. 

But going back to these onboard recorders, I don’t understand 

how the President gets up, gets up in front of the national media 

and says to the American people that he is for small businesses 

and that he is for doing away with regulations that burden small 

businesses and that you, as his representative, you as his mouthpiece, come here and tell us that you are willing and promote a 

regulation that imposes a $2 billion cost on small businesses in this 

country. Can you explain that to me? I mean, because it doesn’t 

add up where I come from. 

Mr. BRONROTT. Four thousand people die every year on our highways. Our mission, congressionally mandated mission is to stop it. 

A 100,000 people are injured every year. Our charge is safety. And 

EOBRs will help save hundreds of lives a year. EOBRs will also 

have a net savings to industry in the billions. 

Mr. LANDRY. So you are willing, you are willing to compromise 

all of these small businesses, the American dream out there; you 

can’t find a better way to save 4,000 people a year, for 4,000 people; is that right? Four thousand people we’re going to spend $2 billion. Or 500,000. Yeah. That is the cost of 500,000 per person. 

Maybe we should pay those persons not to get on the road. 

I mean look, I am trying to understand because at some point 

there becomes a balance between the industry and the safety, okay, 

and we have seen over the last 20 years that you all have done a 

terrible job of doing—not just you but this Federal Government has 


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done it. That is why we have this committee. Because it is breaking 

the small businesses out there. And so I don’t understand when the 

boss says whoa, I don’t like this idea, you just go plowing right 

ahead, say don’t worry, boss, I think you are wrong. Or maybe the 

boss is telling the American people one thing and you something 

else. What is it? Is he telling you to go ahead with it? Are you getting a mandate from the White House that you should go ahead; 

basically the letter that he sent to the Speaker of the House is disingenuous? 

Mr. BRONROTT. Well, with respect to—— 

Mr. LANDRY. That is a yes or no. 

Mr. BRONROTT. I am not sure there is a yes or no. 

Mr. LANDRY. Mr. Chairman, I am out of time. 

Chairman GRAVES. Ms. Beutler. 

Ms. HERRERA BEUTLER. Thank you, Mr. Chairman, and I guess 

I would like to hear because this is an issue that is important to 

me. You know, we all care about safety, right? This isn’t a question 

of whether or not we care about safety. I don’t think safety and our 

small business owners are mutually exclusive. I mean to assume 

that is irrational. 

One of the things I would like to know for sure on this topic is, 

is there a proven, because so from what I have seen, and it largely 

is you know a small versus large issue, you know, for a small two 

person independent owner operator type driver who hauls logs on 

a—in southwest Washington State, on a—inconsistent basis, right, 

whenever we get a tree sale, when there is a chance they bid a job, 

they get it or they don’t. It doesn’t happen consistently. It is not 

like a major freight mobility company that is constantly on the 

road. For them to put this type of equipment into a truck doesn’t 

seem as necessary, right, because if there is one or two people you 

are in an owner operator type situation, I don’t think they are 

going to have a hard time communicating with each other about 

where they are, and what time they are leaving. Keeping up with 

the rules and the regs of the road, so to speak. 

So I, too, would like to understand how the President calls this 

a $2 billion mandate on small businesses who are the backbone of 

our economy, and we need jobs in our neck of the woods, we are 

double digit unemployment, right, how the President calls this a $2 

billion mandate and yet you are telling me it is $2 billion plus. 

Please explain that briefly. 

Mr. BRONROTT. Well, every rule goes through an analysis of the 

costs of, you know, investing and then, you know, the net gains, 

and that is where that ends up. But you know, fatigue is a leading 

cause of crashes, and far too many of them involving death and injury. It is a serious issue. 

Ms. HERRERA BEUTLER. And I get that. How does that not jive, 

though? How is the President saying one thing and I hear you saying something else? 

Mr. BRONROTT. I see. 

Ms. HERRERA BEUTLER. That is what I am interested in because 

that is a major miscommunication. 

Mr. BRONROTT. Well, you know, we are working with, we have 

worked with small business on so many aspects of our rules and 


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regs and our, you know, work with OOIDA over the years. They 

are part of, they are a key part of our safety advisory committee. 

Ms. HERRERA BEUTLER. And how many of the OOIDA recommendations on this issue have you taken into account when you 

were pushing this rule? 

Mr. BRONROTT. I don’t know. 

Ms. HERRERA BEUTLER. Any? A couple? A majority? A minority? 

Mr. BRONROTT. I really don’t know. 

Ms. HERRERA BEUTLER. Okay. Okay. Thank you, Mr. Chairman. 

I yield back. 

Chairman GRAVES. Mr. Hanna. 

Mr. HANNA. Four thousand lives. You are never going to get it 

to zero. Nobody wants any—I remember the Director of the EPA 

saying that their job wasn’t to look at the money, the cost expense, 

the difficulties, the loss of jobs and opportunity, that it was only 

to look at the environment. I can understand that. I don’t agree 

with it, but I understand it. Do you feel the same way in your business? 

Mr. BRONROTT. It is not how we do it. We must consider economic impacts as part of the rulemaking process. 

Mr. HANNA. Right. But I mean, when you do that, does that tell 

me that you automatically if something costs more than it saves, 

that that is the direction you go, or is it more subjective than that? 

Mr. BRONROTT. I don’t know. 

Mr. HANNA. Shouldn’t you know that? I mean, it says director 

there or Deputy Administrator. Wouldn’t you know if that is such 

a vital part of what you do is burdening businesses with additional 

costs which may or may not be reasonable, wouldn’t you think that 

that would be the ultimate thing that you would know especially 

in this environment? Respectfully. 

Mr. BRONROTT. Well, our agency is about safety and that is what 

we focus on. That is what our 1,100 employees wake up every 

morning committed with great passion to do. 

Mr. HANNA. Excuse me. You just said that you look at both sides 

and you make a decision, but apparently you don’t. It is only about 

safety, which you know, you could say that to me and I don’t know 

that I would have a retort necessarily. So it isn’t an equation that 

you arrived at that weighs the cost-benefits. It is all about safety 

all the time? 

Mr. BRONROTT. Well, we must calculate what the costs are. 

Mr. HANNA. When was the last time that you looked at a cost 

that was greater than the rule you were about to enact? 

Mr. BRONROTT. I can’t say. 

Mr. HANNA. So you never have. There has never been anything 

more important or balanced towards business over safety necessarily that you can think of? 

Mr. BRONROTT. Right. 

Mr. HANNA. Mr. Chairman, I am set. I would like to contribute 

my time to anybody that would like it. 

Mr. LANDRY. I just, again, want to give you an opportunity to answer the question of who, of what position, is this administration, 

as a representative of the President of the United States, do you 

stand 100 percent behind small businesses and do you take up the 


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President on his challenge to eliminate burdensome regulations 

that cost billions of dollars? 

Mr. BRONROTT. Yes. 

Mr. LANDRY. Okay. So do I also have your commitment that we 

are not going to continue to move forward with onboard recorders 

for 90 percent of an industry that doesn’t want them or doesn’t 

need them and it is going to cost more, it is going to be an additional cost for them? 

Mr. BRONROTT. Well, you know, the EOBRs are cost effective and 

we are—— 

Mr. LANDRY. You just said, you can’t answer, that is an 

oxymoron. You are saying one thing but you are meaning another. 

You are saying, oh, yeah, don’t worry, small businesses, we are 

with you all. But on the same token you are telling them here is 

the bill. Sell your truck maybe to one of the big majors, six of the 

big majors; 90 percent of this industry is small businesses. You are 

going to impose a $2 billion regulation on the backs of an industry 

that is made up of 90 percent small business owners? Is that what 

you are going to do? 

Mr. BRONROTT. It is not how we see it. 

Mr. LANDRY. But that is what you are going to. It might not be 

how you see it. Look, I like to deal with facts. Is it a fact it is going 

to cost those small businesses $2 billion, is that a fact? 

Ms. VELA ́ ZQUEZ. I would like to ask the gentleman what is that $2 billion tax that you are talking about? Where is that from? 

Mr. LANDRY. Well, the President of the United States sent to the 

Speaker of the House a list of preliminary cost estimates for regulations that he deemed he was going to look into and basically get 

rid of. And part of that list was these electronic onboard recorders 

and hours of service supporting documents, and he has, this has 

come from the White House, $2 billion. 

Ms. VELA ́ ZQUEZ. Well, at least he is doing that is proactive. When 

it comes to rules and regulations, the Bush administration, one of 

the highest number of regulations—— 

Mr. LANDRY. The Bush administration is gone. I am trying to let 

the President. Look, I agree with him. I agree with him. I am with 

him. Very seldom do me and the President see eye to eye but I am 

with him on this. His problem is the guy who works for him is not. 

Can you, I mean, can you hold him accountable? 

Ms. VELA ́ ZQUEZ. Well, you know what? Come to my district 

where HIE’s bus company got into a crash in the Bronx and 16 

people were killed. Ask the Department of Labor how, how, how 

much is worth one person who is killed? Please, give me a break. 

Mr. LANDRY. Well, yeah. That is fine if that is the way you feel. 

But make sure you tell all of those small businesses out there, the 

little guy out there that you are not really for them. 

Ms. VELA ́ ZQUEZ. It is not about it. It is about creating a balanced 

approach and providing a mechanism where small businesses had 

the opportunity to come before them and express and provide their 

input. 

Mr. LANDRY. But with all due respect, the other side of the aisle 

claims to be the party of the little guy. We sit here in this committee every day with all due respect and claim when we go back 

to our districts that we are for the little guy. And the President 


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gets up there and he gets on prime time and he says that. But you 

know what? The actions don’t match the rhetoric. That is the 

only—look, if you don’t want to be with the little guy, don’t be with 

him, but just be honest. That is all. 

Chairman GRAVES. With that I have one quick question which, 

talking about this crash accountability process study which you 

cited I think just briefly a second ago, that was promised in 2010. 

That has been 2 years ago. Do you have any intention to release 

those findings or are you going to release those findings? 

Mr. BRONROTT. Well, we are. First of all, thank you very much 

for the chance to testify before you. I thank you for that question. 

I explained earlier that we presented, you know, the proposal to 

our advisory committee, our Safety Advisory Committee and there 

was no consensus there. And so it was brought back to us to determine next steps. And so we have decided that we are going to take 

a thorough look at it. We are going to study it. We are going to 

report back in July of 2013 as to a path forward, and at that point 

we will be able to report back to you. 

Chairman GRAVES. So you are just starting the process now? 

Mr. BRONROTT. Well, we are going to, based on what we heard 

back from our advisory committee we are taking all of that in and 

starting that process, yes. 

Chairman GRAVES. Okay. So it will be 3 years to come to that, 

whatever conclusion it is? 

Mr. BRONROTT. Well, I can’t put a date on it but we are looking 

at it. 

Chairman GRAVES. It was 2 years from now. Thank you, Deputy 

Administrator. I appreciate you being here. We will seat the second 

panel, please. Have the second panel come forward, please. 

Mr. BRONROTT. Appreciate it very much. Thank you all. 

Chairman GRAVES. Bring the hearing back to order, and I am 

with our second panel of witnesses. We appreciate all of you being 

here. We appreciate all of you coming in. Some of you come from 

a ways away, and we greatly appreciate that and again we look forward to hearing the testimony. 

Our first witness is going to be Mr. Daniel Miranda, CEO of Hit 

Em Hard Transportation, which is a small trucking firm located in 

Miranda, California. Mr. Miranda has been in business for more 

than a decade. Prior to starting his own trucking company, he also 

served in a number of law enforcement agencies in California. He 

is going to be testifying today on behalf of the Owner-Operator 

Independent Drivers Association. Mr. Miranda, we appreciate you 

being here. 


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STATEMENTS OF DANIEL A. MIRANDA, CEO, HIT EM HARD 

TRANSPORTATION, ELVERTA, CALIFORNIA, ON BEHALF OF 

THE OWNER-OPERATOR INDEPENDENT DRIVERS ASSOCIATION; JEFF TUCKER, CEO, TUCKER COMPANY WORLDWIDE, 

CHERRY HILL, NJ; DR. MICHAEL BELZER, PH.D., ASSOCIATE 

PROFESSOR, DEPARTMENT OF ECONOMICS, WAYNE STATE 

UNIVERSITY, DETROIT, MI; AND ANTHONY GALLO, SENIOR 

ANALYST, WELLS FARGO SECURITIES, LLC, BALTIMORE, MD 

STATEMENT OF DANIEL A. MIRANDA 

Mr. MIRANDA. Thank you, Chairman Graves. Good afternoon. My 

name is Daniel Miranda, and I am from Elverta, California. I have 

been a professional truck driver for over a decade, and since 2010 

I have operated my own small business trucking company with two 

drivers. Prior to becoming a truck driver, I served as a police officer. I am also a member of the Owner-Operator Independent Drivers Association, commonly known as OOIDA. 

The majority of trucking in this country is small business, as 93 

percent of our Nation’s motor carriers own 20 or fewer trucks. 

Today, I am going to talk to you about my experience with the 

Federal Motor Carrier Safety Administration’s Compliance, Safety 

and Accountability program, commonly known as CSA or CSA 

2010. I believe my experience is similar to others in the trucking 

industry, particularly little guys like me, and point to the oppressive and punitive nature of CSA in its current form. 

There are three overarching problems with CSA. The system 

lacks fairness and accuracy, unfair arbitrary severity of weights for 

violations, and the failure of CSA to account for whether a truck 

driver is actually at fault for an accident reported in the CSA. 

In short, CSA, though well intentioned, is today a program with 

flaws that have wide-reaching implications for motor carriers, especially small carriers like me. 

How does this system single out small business? FMCSA urges 

shippers and brokers to use carriers that have been inspected 

versus those who have not been. And the shipping community feels 

they will be liable if they do not use carriers with positive CSA ratings, something that only happens when a carrier undergoes a lot 

of clean inspections. 

Small carriers are less likely to see this happen to them, especially when compared to a large carrier with hundreds or thousands of trucks. Once a small carrier gets into the system, the only 

way to stay relevant is by receiving completely clean inspections. 

But these inspections are highly subjective. Law enforcement, as I 

know full well, can be overzealous at times, and not understanding. 

The result for small carriers is that just a few minor violations can 

send your score skyrocketing, making you untouchable to shippers 

and brokers because they see you as a risk, even though a driver 

or carrier may have millions of accident-free driving miles. 

This is a reality that I am still living through firsthand as a 

small trucker. Last May, one of my drivers had a series of log book 

violations around how he was characterizing his time, plus a minor 

violation regarding reflective tape on his trailer. Regardless of the 

merits of these violations I took remedial action with this driver, 


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requiring him to attend additional training on hours of service and 

how to correctly record the duty status. 

Knowing the negative impacts that these violations would have 

on my company’s score with CSA and the ability of my business to 

respond, I decided to challenge one of them under the only procedure FMCSA currently has, which is the DataQ system. The problem with the DataQ system is that the decision on whether or not 

the violation should be overturned more often than not rests in the 

hands of the very same police officer that recorded the violation, 

even when a citation stemming from the violation is overturned by 

a court of law. It works the same way if you are issued just a warning. In the CSA system, that is still a violation, with the original 

officer as judge, juror, and executioner. 

I also reached out to the FMCSA and asked them what I could 

do to improve my score under CSA. They told me that I needed to 

obtain more clean inspections. So I did that, showing that we are 

a compliant company and that we fixed whatever problems may 

have existed before. However, my score actually went up, the exact 

opposite result of what should have happened. This is a terrible 

message to send to small businesses, that the survival of their 

business is beholden to a computer system that is clearly out of 

touch with reality. 

This lack of reality continues under other parts of CSA. A driver 

who is cited for failing to sign his daily vehicle inspection report 

sometimes totally unrelated to fatigue or safety is assigned a severity weight of 4, only slightly lower than a violation for an improper 

lane change while driving, something that is clearly a safety issue. 

There is no crash fault indicator under CSA, meaning that one 

truck involved in an accident looks like any other. 

What does this mean in real life? A fellow small truck driver was 

hit by multiple vehicles as part of a large accident. Despite the fact 

that the trucker stopped his truck and did not hit anyone, under 

the CSA, the seven fatalities and 26 injuries are still listed in his 

record with no notation about what happened. And how does a system like that help law enforcement focus on safety? And how can 

a trucker view it as anything more than a tool for punishment? 

One final comment on how today’s CSA hurts small business. I 

spoke earlier about how inspections generate scores. But under 

some categories with CSA, especially the one dealing with driver 

fatigue, you also must have a violation to generate a score. If a carrier has no violations of hours of service, they don’t have a score. 

Yet brokers and shippers are told to only look for carriers with 

scores. With many small carriers not having scores because they do 

not have violations, they are often out in the cold while the larger 

carriers with violations get the load simply because they have a 

score. 

Mr. Chairman Graves, I appreciate the time and the ability that 

I have had to come here and testify before you, sir. 

Chairman GRAVES. Thank you very much. Our next witness is 

Anthony Gallo. He serves as the Managing Director and Senior Equity Research Analyst at Wells Fargo Securities. His testimony is 

going to cover recent reports by his firm that raise questions regarding the accuracy of the new safety management system and its 

potential to misidentify carriers as unsafe. 


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Mr. Gallo, thank you for being here. 

STATEMENT OF ANTHONY GALLO 

Mr. GALLO. Good afternoon, Chairman Graves, Ranking Member 

Vela ́zquez, and members of the committee. As you mentioned, I am 

Anthony Gallo. I am honored to be here today. I am a Managing 

Director and the Senior Equity Research Analyst covering transportation at Wells Fargo Securities. I have been covering the transportation industry since the early 1990s. I have held other roles at 

Wells Fargo and its predecessors, including Co-Head of Equity Research. 

My research is largely conducted in the context of providing investment ideas to institutional investors such as pension funds and 

mutual funds. I publish fundamental research on the trucking, railroad, and parcel segments. My written testimony includes a list of 

companies that I cover as well as important disclosures and an attestation that my research reflects my personal views about the 

subjects, securities, or issuers discussed. The views I express today 

are my own and not the views of Wells Fargo. 

We published three reports on CSA; the first in March of 2011 

and the most recent report on July 2 of this year. In the normal 

course of our research we examined regulatory issues that pertain 

to our companies and the industry. We are often trying to determine how a specific regulation will affect the economics and competitive framework of our companies. Truck safety, small business, 

and statistics are areas that I am expected to be knowledgeable 

about as an analyst covering this space. 

In our first report, we examined CSA results for roughly the two 

dozen publicly traded trucking companies. In our second report, we 

touched on 200 of the largest carriers. And our most recent report 

covered 4,600 trucking companies. Of the 4,600 trucking companies, 82 percent had fewer than 250 trucks; 60 percent had fewer 

than 100 trucks. Each carrier in our data set had at least 50 inspections. 

In each of our reports we discussed the lack of any meaningful 

statistical relationship between CSA BASIC scores and accident 

rates. In each of our studies, we ran regression analysis of BASIC 

scores against accident rates. Our analysis led us to conclude that 

the criteria used to judge motor carrier safety did not coincide with 

the actual crash rates. Additionally we highlighted areas that we 

thought were problematic with the program, including 

unexplainable variances in inspection rates and the inconsistencies 

of enforcement protocols by States. In our most recent report we 

dealt in the inequities of crash reporting. 

Our second report published on November 4, 2011, titled ‘‘Good 

Intentions, Unclear Outcomes’’ seemed to generate quite a buzz. On 

March 16 of this year the FMCSA actually published a formal response to our November report. In short, they disagreed with our 

findings. We were flattered that a well respected organization such 

as the FMCSA responded to our work. And we took very seriously 

the additional perspectives that they provided. We looked deeply 

into the FMCSA responses. We sought advice and perspective from 

industry experts, and we subsequently expanded our data set to 


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the 4,600 motor carriers. We published our findings on July 2. We 

titled the report ‘‘CSA: Another Look With Similar Conclusions.’’ 

Our most recent 22-page report has been submitted as part of 

our written testimony. I offer the following summary conclusions 

from that report: 

First, we did not find a meaningful statistical relationship between the assigned BASIC scores for unsafe driving, fatigue driving, driver fitness, or vehicle maintenance when compared against 

actual accident rates either measured for number of power units or 

miles driven. 

Second, we found unexplainable variances in enforcement by 

States. For example, in our data set, Indiana represented over 35 

percent of all BASIC violations for exceeding the speed limit by one 

to five miles an hour. We also learned that variances in crash inspection reporting are such that the FMCSA actually rates States 

good, fair, or poor based on ‘‘completeness, timeliness, accuracy, 

and consistency’’ of reporting in these important areas. 

Third, we found a wide variety of inspection rates by carriers. 

The one pattern we did observe was that small carriers with 25 to 

49 trucks were inspected at two to three times the frequency of 

large carriers. 

In concluding my comments, I would like to offer the following 

observations that I hope you find helpful in your assessment: 

First, CSA is a Federal program enforced at the State level, but 

inspection and enforcement protocols vary in unexplainable ways. 

Small carriers are likely to frequent a fewer number of States than 

larger carriers, thereby making them exposed to the vagaries of 

any one State. 

Secondly, small carriers appear to be inspected at a greater frequency. In addition to lost productivity, two out of every three inspections result in some violation, creating a vicious cycle for the 

carrier. 

Lastly, the trucking customers are struggling with what to do 

with the CSA methodologies. They tell us that they are unsure of 

their risks when FMCSA rates a carrier satisfactory but there may 

be a BASIC threshold violation for, say, vehicle maintenance. 

We ask, is vehicle maintenance BASIC enough of a reason to 

drop a carrier? If a shipper establishes carrier protocols that incorporate CSA, how should they handle carriers with no BASIC scores 

and are not scored in all the BASICs? Large carriers are using 

their favorable CSA scores in soliciting business. Further, it is 

often difficult to replace a large carrier on short notice. Conversely, 

it may be easy to replace a small carrier who temporarily moves 

beyond a threshold but whose violations linger for 24 months or 

longer. This could cause a loss of business at a small carrier who 

could otherwise be safe. 

Thank you for your time. I would be happy to answer any questions. 

Chairman GRAVES. Thank you, Mr. Gallo. 

Our next witness is Jeff Tucker. Mr. Tucker is the CEO of Tucker Worldwide, a third generation small family run freight brokerage business located in Cherry Hill, New Jersey. He is also a 

founding member of the Transportation Intermediaries Association 

and a member of the American Trucking Association, where he 


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serves on the organization’s Government Freight Committee. 

Thank you for being here, Mr. Tucker. 

STATEMENT OF JEFF TUCKER 

Mr. TUCKER. Chairman Graves, Ranking Member Vela ́zquez, and 

members of the Small Business Committee, thank you for the invitation to testify. 

As a transportation brokerage, I own no trucks. I hire thousands. 

Others have explained how CSA works and doesn’t. So my focus 

today is going to be on the dangerous hiring, negligent hiring risks 

worsened by FMCSA’s mischaracterizations and misguided promotion of the CSA program. 

Partly due to flaws in CSA, but primarily due to FMCSA’s recent 

actions and statements, the agency has created a heavy burden on 

American business. For the record, TIA and my company support 

FMCSA and safety and we are willing and even eager to spend 

money on safety. It is important to us and it matters. For example, 

in the past few years, I added a lawyer to my staff. I have added 

a director of risk management to my staff. And I voluntarily adopted ISO 9000 standards so that my procedures cane followed and 

audited, all due to this liability that I am facing. I have turned 

away a majority of carriers who wish to do business with me. Not 

sure why yet. 

Like others today, I can tell you that today’s system does not promote safety. Instead, it imposes a tremendous burden on brokers, 

carriers, U.S. manufacturers, and small business. Why? Because 

CSA is a relative system. It is graded on a curve. It is not a safety 

rating, but it is designed to prioritize FMCSA intervention. No 

study published has shown that high BASIC scores predict future 

crash. ‘‘Relative’’ means that if the agency decided it could intervene with 25 carriers per year and there were only 100 carriers, 

25 would have a high score, even if they were safe and compliant. 

We don’t doubt at all that CSA has helped prioritize FMCSA and 

law enforcement resources. But when CSA is used for purposes 

other than for law enforcement, CSA has serious flaws and harms 

small business. Despite these many flaws, FMCSA has chosen to 

plow ahead and market it for something it was not designed, as a 

carrier selection tool for shippers, brokers, and insurers. The program FMCSA uses to choose which carriers to send letters to or 

schedule audits of is now being marketed by the agency to shippers 

and brokers for carrier selection without facts, data, science, or direction from FMCSA telling us specifically what carriers or what 

CSA score not to use. 

FMCSA has imposed tremendous new risk and cost on small 

business. My company happily participates in promoting safety. We 

spend good money on it. That is not the issue. The issue is, FMCSA 

has created a strawman and by their actions have forced all the 

businesses who hire motor carriers to chase the strawman in hopes 

of improving safety. This isn’t safety. This is waste. 

FMCSA hasn’t told us what BASIC score is unsafe. They haven’t 

told us who not to use. But they have given accident lawyers jet 

fuel for their negligent hiring lawsuits against small business and 

impose great costs on small business to protect themselves against 

such lawsuits. 


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In 2004, a Federal court created a new interpretation of the common law known as ‘‘duty of reasonable care.’’ Succeeding cases 

built upon it with the result of brokers and shippers must now second guess if a fully authorized motor carrier licensed by FMCSA 

is safe to operate using subsets of FMCSA data that don’t determine fitness, most of which are purposefully hidden from us. Doing 

something less may be deemed by certain courts and jurisdictions 

as negligent hiring. 

Since CSA is relative and graded on a curve, there will always 

be a number of motor carriers with an alert in one or more of seven 

different scores. Which carrier is more dangerous, one with a 60 or 

a 72? We heard from the Deputy Administrator that he doesn’t 

know. He can’t answer that question for the committee here today. 

I can’t answer it either. They can’t answer it without looking at far 

more data that we don’t have access to, without further investigation, and as you heard, without going back to the office and maybe 

even going and doing an onsite audit. 

Many shippers, it should be noted, will not use motor carriers 

just because they have an alert in one of these arbitrary scores. 

But good brokers and shippers guaranteed will be sued with impunity because they used a carrier with a high relative subjective 

score graded on a curve. 

FMCSA’s responsibility is to issue carrier licenses and enforce 

compliance to safety standards they set. It should be their sole responsibility to tell the public which carriers are safe and not safe 

to use. Until a safety fitness determination rulemaking next year 

is developed for public comment and ultimately developed into a 

final rule, we ask that FMCSA define who the high risk carriers 

are, list them, and send them in a file daily to the public. 

Two, that FMCSA immediately convene a CSA stakeholder subcommittee of experts and listen to them; that Congress ask the 

GAO to review CSA in light of their previous investigation at the 

agency’s relative safety scores; and finally, that Congress should remove lawsuits involving interstate commerce to Federal courts. 

I apologize for taking more time. Thank you very much. 

Ms. VELA ́ ZQUEZ. Mr. Chairman, it is my pleasure to introduce 

Michael Belzer. He is an Associate Professor of Economics at 

Wayne State University. He received his Ph.D. from Cornell in 

1993, focusing his research on the dynamics of deregulation and institutional structure on industrial relations in the trucking industry. 

Dr. Belzer is the author of Sweatshops on Wheels: Winners and 

Losers in Trucking Deregulation and numerous peer reviewed articles on trucking industry economics, labor, and occupational safety. 

He has also led numerous projects for the FMCSA, including a 

2009 study on safety issues facing the curbside bus industry. He 

created and chaired the transportation research board committee 

on trucking industry research. And he is a member of numerous 

other transportation policy committees. 

Dr. Belzer is currently developing a strategic economic development plan to transform southeast Michigan into a global freight 

transportation hub. 

Thank you for being here. And welcome. 


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STATEMENT OF DR. MICHAEL BELZER, PH.D. 

Mr. BELZER. Thank you very much. On June 1, 2011, a discount 

intercity bus carrying 59 people to New York’s Chinatown crashed, 

killing four people and injuring more than 50 others. The carrier 

had a long history of violations and crashes and a safety rating far 

worse than the rest of the intercity bus industry. A driver fatigue 

rating of 86 on a scale of 1 to 100 meant that before the crash Federal officials had rated it among the most unsafe bus carriers. Its 

driver fitness rating of 99.7 meant that it ranked in the bottom 1 

percent. Sky Express should not have been on the road. And after 

the crash, the FMCSA banned it from interstate service. Although 

the ban was too late for the victims, under U.S. regulations it still 

does not prevent the company from continuing to operate intrastate. 

Safety advocates’ call to require seat belts, stronger rules, and 

more driver training do not address the problems that led to the 

crash and would not prevent future crashes. Intense competition 

created by deregulation created the safety problem. We do not have 

to repeal deregulation to solve it, but we have to address the problems this competition creates. If insanity is doing the same thing 

over and over and expecting a different result, we are all crazy. 

Preventible crashes like this will happen again for the same reasons regardless of how many times we rework the algorithms of 

CSA or replace the entire program altogether. In short, CSA tries 

to address safety problems. We cannot remedy them until we begin 

to address trucking’s systemic problems. 

I have examined the link between CMV driver compensation 

work pressure and driver safety. Research establishes a pay safety 

link that is important for policy because it shows that the economic 

force that is inherent in transport competition tends to produce unintended safety and health consequences for drivers and passengers. My full report on the economics of safety, which I submitted to the committee, applies to both truck and bus. Transport 

deregulation brought lower consumer prices, but this bus crash 

showed the dark side. Deregulation has increased competition 

among carriers in all modes, hauling both passengers and freight, 

and has reduced compensation. CSA in its current form places 

pressure on drivers without addressing underlying causes. In the 

trucking industry, poor compensation for drivers causes a 

misperception of a driver shortage that isn’t there and causes carriers to look for cheaper labor, such as that found in Mexico. Everyone who has passed introductory economics knows that more drivers will be attracted to trucking by a better job package, including 

compensation. Opening the border to Mexican truck drivers would 

bring worse pay, as Mexican drivers compete with American small 

business drivers and employees at a quarter of the cost. No regulation can overcome the effect of markets that drive down price. 

This creates an economic sustainability problem. The CMV driver’s workplace is the public highway, and unsafe drivers become a 

public hazard; what we in economics call a negative externality. 

While people buy transport services for an apparent market price, 

it does not include safety and health costs. Economic efficiency requires that price incorporate all costs and benefits associated with 

commercial movement and failure to incorporate the full safety and 


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environmental costs sends incorrect signals to the market, creating 

an implicit public subsidy of unsafe operators. 

If the insurance market worked perfectly, the risks associated 

with low paying carriers would show up in higher cost insurance. 

This market does not work well because insurance companies cannot rate motor carriers and charge accordingly. These crashes are 

low probability/high impact events that insurance companies just 

don’t like. 

These findings are consistent with economic theory because we 

expect that carriers pay drivers their market value determined by 

their personal employment history, driving record, training and 

education, experience, driving skills, temperament, and other factors. These factors explain the differences in safety outcomes. For 

every 1 percent in pay, we have found 1 to 4 percent better safety, 

controlling for the factors that we can. Higher pay produces better 

carrier and driver safety. We don’t yet know whether safety pays, 

but clearly higher driver pay causes safety. Since price should include all costs in an efficient market, the environmental and safety 

costs associated with cheap labor and cutthroat competition create 

unsustainable supply chains that make everyone less well off. 

Three solutions would go a long way to resolve this problem: 

Number one, get government regulators out of their silos. FMCSA 

and the Department of Labor should cooperate with industry and 

with each other to talk about how to promote economic conditions 

that improve highway safety. The DOL has the authority to regulate compensation, and perhaps it is time to reconsider certain exemptions for the trucking industry under the Fair Labor Standards 

Act. 

Number two, implement chain of responsibility and safe pay 

rules, like those enacted by the Australian Parliament this year, to 

create a level playing field in a deregulated environment. The 

owner operator model is valuable and we need to preserve small 

business in the trucking industry. Other nations like Australia 

maintain a competitive industry that supports small business 

truckers and doesn’t compromise safety. One way to do this is to 

address underlying systemic problems such as the failure to pay 

truckers for loading and unloading time. 

Number three, tighten regulations on subcontracting balances 

the power between contractors and trucking companies, as Australians have done. This would give owner drivers a fair shake. In 

short, help level the playing field by giving small businesses more 

negotiating power to keep costs low and safety benefits high. 

Thank you very much. 

Chairman GRAVES. Mr. West. 

Mr. WEST. Thank you, Mr. Chairman. And thank you to the 

panel for being here. My first question: Any time we deal with regulations, I always ask, did the Federal Government come down and 

talk to you all, the practitioners, and try to get a bottom-up review 

of this SMS process before it was pushed down upon you? 

Mr. TUCKER. I can try to answer that. 

We, myself personally along with my trade association, the TIA, 

Transportation Intermediaries Association, have met several times 

with FMCSA. And we have told the Administrator herself and another Deputy Administrator—in fact, he volunteered in front of 


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hundreds of our members a few months ago to sit with us before 

they issued their guidance document that shippers and brokers 

would have to somehow use or suggest they use CSA. We asked 

them, please don’t do that. Please sit with us. That would be devastating to business if you did that. It is not ready for that yet. And 

both times we felt were going to have that meeting. And 1 week 

before the meeting was held, the documents were published. So we 

sat and talked about why did that happen. The documents actually 

said they listened to us, our association and another association, 

which was I think a mischaracterization of what occurred. 

That is my perspective. 

Mr. MIRANDA. Mr. West, being a small business trucking company owner, being a trucker on the road myself, no, they didn’t 

come down and talk to me. They didn’t come to the truck stop and 

talk to the drivers. They didn’t come and talk to any of the people 

who really are affected by this. They are changing my life. They 

are changing the way I feed my family without talking to us at all. 

And I will tell you and I will assure you that it is bringing economic impact to my family and to the families that I help support 

daily in great numbers. And they are not caring about anything we 

say. And we have called and asked questions, even how this thing 

works. And they won’t answer the question. 

Mr. WEST. Then this is my follow up to that because I believe 

that in place of something that you don’t agree works very well, 

what would you all seek to try to implement or institute? Because 

we have to have safety on our highway system. So what are some 

of your recommendations? Since we do have the guy back there 

from the regulation and compliance section, what were some of the 

things that you would present to him that he can take back right 

now today? 

Mr. BELZER. Can I throw something out? 

Mr. WEST. Sure, Doctor. 

Mr. BELZER. This is Dr. Belzer. 

Mr. WEST. I know. 

Mr. BELZER. Well, I know there is a record here of some kind. 

So I have spoken with them and met with them many times. I 

have served on some panels and different things like that. In fact, 

Anne Ferro asked me to come down and speak to the MCSAC a 

couple of years ago about the economics of safety question. I actually applied for a position on MCSAC when there were some openings but I didn’t get the job or the opportunity to serve. However, 

I have actually done a lot of studies for them over the years, different times and most recently, actually, one on using the large 

truck crash causation study. 

Mr. WEST. I only have 1 minute and 38 seconds. 

Mr. BELZER. Very quickly. I proposed to them some years ago a 

benchmarking program which I developed which is in many ways 

a lot like CSA but allows immediate feedback to the carriers on 

how to improve their operations. And it was developed based on 

sound science relative to the causes of truck crashes and started 

from that perspective and worked back to come up with a rating. 

So I would recommend that they take a look at that again. And 

we would be glad to be helpful with that. 


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Mr. WEST. Now is that something that the gentlemen here could 

be in agreement on? 

Mr. TUCKER. I think I have something much quicker and faster 

that would improve safety immediately. And we have asked this in 

writing and in various meetings. We asked—the FMCSA is required to identify high risk carriers. We have asked them to identify them in a list, give them to us, update that daily to the industry. We will stop using those carriers overnight. It is a small percentage, very small. We asked for daily changes in the safety ratings. When a safety rating goes from satisfactory to unsatisfactory 

sometimes it will take 5 to 6 weeks for us to find that out. We 

asked them to issue that in a daily file. And then thirdly, we have 

asked, when they place a carrier out a service for a lot of different 

reasons, they are not able to pull the carrier’s authority. So they 

tell the carrier, you can’t go on the road, but they can’t pull their 

authority. We have asked them, look, we don’t care if you pull their 

authority. Just tell us who you placed out of service. We will not 

use them. 

Unfortunately, instead of concentrating on those concrete, clear 

safety issues, they have advocated we use this relative score. 

Mr. GALLO. Sir, in my line of work, if the numbers aren’t right, 

you either need to fix them or pull them. 

Mr. MIRANDA. Mr. West, I would bring to you that not only 

should you look at how to correct it but we need to look at, the correction is looking at education. We are not educating. We are putting a very arbitrary decision making by someone saying that you 

violated something with no proof that you violated it. You are not 

convicted by any judge, jury, peers. You are just, by an officer, saying that you did something. Me, as a police officer, I have spent 

many years in the law enforcement community. And I am here to 

tell you that the officer is wrong sometimes. Sometimes he doesn’t 

understand the law. Sometimes he doesn’t understand. Sometimes 

he makes mistakes. That makes him human. This does not give for 

any human factor. This says that he gets to decide who gets to stay 

in business and who doesn’t. And me, as a small carrier, I am telling you, that is going to put a lot of small carriers out of business. 

It is going to put a lot of families not eating and on the welfare 

lines. I urge you to really think about this long and hard. 

Mr. WEST. Thank you, panel. Thank you, Mr. Chairman. I yield 

back. 

Ms. VELA ́ ZQUEZ. So I just would like to ask Mr. Miranda, would 

you be supportive of what Mr. Tucker recommended to the Administrator? 

Mr. MIRANDA. No, ma’am. 

Ms. VELA ́ ZQUEZ. Including the list. 

Mr. MIRANDA. I don’t know what OOIDA’s standpoint would be, 

but for me as a small trucker, no because the problem is—— 

Ms. VELA ́ ZQUEZ. Okay. I just needed a yes or no answer. Thank 

you. 

Mr. Gallo, you heard Administrator Bronrott when I asked him 

about your study. And then we asked about the updated study and 

the response that he made. So the FMCSA’s data set that was used 

was still magnitudes larger than yours. I believe that is five times 

larger than yours. So is it possible that your sample size is still too 


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small to accurately determine the relationship between the BASIC 

and accident probability? 

Mr. GALLO. Yes. Thank you. I should clarify my earlier statement. I said I was flattered. Actually, I got a pit in my stomach 

when I first read the report. So when we went back to it, we did 

dig very deeply. 

No, a 200 carrier set is certainly adequate by most statistical 

measures. But part of the reason why we broadened our study to 

4,600 carriers was for that reason. And again, we found virtually 

no statistical correlation. So math is math. I would encourage them 

to rerun their numbers if they like. But I do have some additional 

comments if you would care for me to comment on the UMTRI report. 

Ms. VELA ́ ZQUEZ. Okay. 

Dr. Belzer, some trucking firms have increased driver pay and 

found that it increased the overall safety record of the company. 

However, current market forces prevented them from continuing to 

pay the elevated rate. What can we do to strike the right balance 

between regulations and pay to create a safer highway system? 

Mr. BELZER. Well, I think probably the most important thing we 

can do is start with the perspective that the economic competition 

is driving these outcomes and try to think about what we can do 

to change the economic balance. We don’t want to encourage cutthroat behavior. We don’t want to encourage a race to the bottom, 

as some people call it. And I think the way the deregulation in 

competition transport works, it tends to drive that process. 

I now teach transportation economics to graduate students. And 

as I do that, it is more clear to me that it is the competition itself 

that is causing the problem. So we have to address ways of kind 

of putting boundaries around it. And one of them could be, for example, paying drivers for the nondriving labor. Once you do that, 

they will self regulate. 

Ms. VELA ́ ZQUEZ. Dr. Belzer, I was shocked to find that FMCSA 

has very little power to remove unsafe trucks and buses from the 

roadways. And I found that because this accident impacted some 

of my constituents, the one in the Bronx. Do you think that the 

new disciplinary measures of the CSA program are enough to address the safety concerns posed by the curbside bus industry? 

Mr. BELZER. So I don’t know the details of the CSA. But I don’t 

believe that it is dealing with the economic competition that is 

driving this process. This is like the little Dutch boy and his finger 

in the dike and the water keeps flowing. And the difficulty that we 

have when we have this kind of cutthroat competition, which was 

what was involved in that particular crash, that is not the kind of 

thing that is going to get fixed by a regulation that makes it more 

difficult for people to operate. It is going to be probably a proactive 

effort to make sure that the people who are doing the work are getting paid for it. So I think that is really what it comes down to. 

Ms. VELA ́ ZQUEZ. Okay. Thank you. 

Chairman GRAVES. Mr. Hanna. 

Mr. HANNA. Doctor, the way it is set up now, it is sort of like 

a bell curve. Everybody is scored. And some people have to get a 

bad score. Some people have to get a good score. Mr. Tucker thinks 


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that is ridiculous. It doesn’t make any sense to me either. What do 

you think of it? 

Mr. BELZER. It sort of reminds me of the curve in the classroom, 

right, so I can get in trouble on that one. 

But I think that it is very difficult. When I set up the trucking 

industry benchmarking program, I actually partnered with the 

California Trucking Association. What we were going to try to do 

was to implement this association wide in California. Ultimately, 

I couldn’t, on a voluntary basis, get enough carriers to participate 

in it to—— 

Mr. HANNA. It doesn’t make any sense. If a trucker scores well 

and the bulk of truckers, 99 percent of them score well, why 

shouldn’t they all have a good score? And conversely, why should 

everybody be penalized because somehow the bell curve idea is 

being used? You know, along with the pay idea, I understand that 

and I agree with it. I wonder also, part of the problem is that the 

scoring, the way trucking companies are penalized runs with the 

company, not necessarily the driver. And one of my complaints 

about OSHA, having been in business for so many years, is not 

that they penalize people as a company, but that there is no accountability on the part of the driver. They are almost treated as 

if they were a piece of equipment in terms of their accountability. 

It sounds as though it is the same here. 

Mr. BELZER. There is more accountability in trucking than there 

would be in your standard business, I think. And the reason is everybody who drives a commercial motor vehicle has to have that license, and that license personally travels with them throughout 

their career. So the reason why this pay thing works—and some of 

my best supporters are nonunion companies, like J.B. Hunt and 

companies like Schneider, companies like that, they want to know 

if the driver has got a safety problem. That safety problem goes to 

that driver, that driver’s record right along. And that is different 

from what happens if somebody climbs a ladder and falls off. It 

very difficult to track that kind of stuff back. This is pretty trackable. 

Mr. HANNA. Mr. Tucker, I watched you as you were listening to 

Mr. Belzer. I wonder if you have a question you would like to ask 

him on my time. 

Mr. TUCKER. I have a few things I would probably like to say. 

Mr. HANNA. You have got 21⁄2 minutes. 

Mr. TUCKER. I really hesitate as a free market kind of person. 

I am a brokerage, right. So I have to buy and sell. And I love the 

free market. I would hesitate going down the road of somehow regulating pricing for trucking. It will be something that industry will 

rail against. I think you will have the National Association of Manufacturers and every other trade association screaming. It will be 

a bloody war, I think. It will wake up every association that is out 

there because eventually it will raise prices to all of us. 

The reality is, right now, prices are going up. It is a supply and 

demand. Trucking is a leading indicator. We came out of the recession far faster and sooner than the country did. We went into it 

faster as well. Right now, I can tell you that the rates that truckers 

are getting are better. The returns are better. Actually, this person 

would be far better to tell you. 


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Mr. HANNA. To Dr. Belzer’s point, it doesn’t necessarily mean 

that the driver is getting the benefit of that. What do you say to 

that? 

Mr. TUCKER. That is a very good point. But right now, in good 

economies, like we are having right now in trucking—not the greater economy but in trucking—drivers get signing bonuses to come 

on to trucking companies. And drivers are very—right now, there 

was a trade association recently, one of the largest carriers in the 

country said, I have got something like 68 brand new tractors and 

trailers he can’t fill with drivers. And he is giving away signing bonuses to fill those seats. 

So I have a hard time trying to mess with a market that has its 

ups and downs but works, in my opinion. 

Mr. HANNA. Thank you, chairman. I yield back. 

Chairman GRAVES. Mr. Landry. 

Mr. LANDRY. Real quick, it just occurred to me, do any of y’all 

know how many people, how many lives are lost on our highways 

due to poor roads and bridges and poor infrastructure? Dr. Belzer? 

I heard that 4,000 are caused by it. 

Mr. BELZER. Well, there are 4,000 some that are killed every 

year in truck related crashes and some 49,000 are killed—— 

Mr. LANDRY. Such things as roadways, any idea? I am just curious because that is our job to make sure that the roads are safe. 

I don’t know. Mr. Miranda, do you believe that our roadways, especially the Federal roadways are in A plus shape? 

Mr. MIRANDA. My answer to that is, no, sir. 

Mr. LANDRY. That is absurd. And then the fact that we can’t 

even do our job but yet now we want to regulate your business as 

well and tell you how you have to drive safer, but we can’t provide 

a transportation system that is at least of A or B quality. 

Mr. MIRANDA. I would tend to agree with you, Mr. Landry. As 

a matter of fact, I would comment that of those 4,000, nobody is 

taking into account how many of those accidents were the primary 

cause of collision factor, whether road conditions or weather conditions. 

Mr. LANDRY. Right. Now let me ask you, do you have an onboard 

recorder? How many trucks do you have? 

Mr. MIRANDA. I have three trucks I have got under my authority, 

sir. 

Mr. LANDRY. Do you have any onboard recorders? 

Mr. MIRANDA. No, sir. I couldn’t afford it. If I had to put those 

on today, I would have to close my doors. 

Mr. LANDRY. Oh, no. 

Mr. MIRANDA. I am trying to figure out where Mr. Tucker sees 

this great economy. Because maybe the brokers are taking it and 

putting it in their pockets, but it ain’t coming to the drivers, I will 

tell you that much. 

Mr. LANDRY. So you are basically saying that if you were mandated to put those recorders on, you would probably have to close 

your door. 

Mr. MIRANDA. No. There is no question. I would close my door, 

sir. Right now, I am running on about a 7 percent profit margin. 

Mr. LANDRY. And you have, you said, three trucks? 

Mr. MIRANDA. Yes, sir. 


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Mr. LANDRY. Now you are the boss over those three trucks, 

right? 

Mr. MIRANDA. I don’t know if I would consider myself a boss, but 

I am in charge. 

Mr. LANDRY. You are in charge. And so when you give an order 

that those drivers are supposed to implement that order—you said 

you were in law enforcement; is that right? 

Mr. MIRANDA. I have been in law enforcement, yes, sir. 

Mr. LANDRY. Worked for the sheriff’s office or the municipal? 

Mr. MIRANDA. I worked for the L.A. County Sheriff’s Office. I also 

worked for the Oakland Housing Authority. 

Mr. LANDRY. Now when the sheriff put down a policy or said, 

this is the way I want it done, what would happen if y’all deputies 

didn’t follow his command? 

Mr. MIRANDA. Normally you got some days on the beach or got 

fired or both. 

Mr. LANDRY. So the President of the United States says that he 

doesn’t like it. He agrees with you. He thinks that you can’t afford 

those onboard recorders. But yet the person who works for him 

says that regardless of what the President says, we are going to 

put those in your truck. I mean, does that seem counterintuitive 

to the way the chain of command works? 

Mr. MIRANDA. It seems very counterintuitive to me, sir. 

Mr. LANDRY. Let me ask you a question. If we mandate this, how 

many more businesses like yourself do you think are going to close? 

Mr. MIRANDA. My opinion or what can I state as a fact? 

Mr. LANDRY. Well, I mean, give me your opinion. 

Mr. MIRANDA. My opinion is, I would say probably—you take almost any trucking company below 10, and they are probably going 

to be out of business within 30 to 90 days. 

Mr. LANDRY. But I mean, the transportation industry won’t come 

to a grinding halt. What would it look like? 

Mr. MIRANDA. J.B. Hunt, Schneider, Swift, U.S. Express, Covenant. That kind of company. 

Mr. LANDRY. So basically this regulation will force you out of 

business and into the hands of a major corporation? 

Mr. MIRANDA. Yes, sir. 

Mr. LANDRY. That is where they would deliver you to? 

Mr. MIRANDA. Yes, sir. 

Mr. LANDRY. That is not the American way. 

Mr. MIRANDA. That is not what I fought in the trenches for. That 

is not what I went to war for when I joined the Army. 

Mr. LANDRY. Oh, you were in the Army too then? 

Mr. MIRANDA. Yes, sir. 

Mr. LANDRY. So when the general put down an edict or he gave 

an order—and Mr. West is a great American. He served as well. 

I did as well in uniform. And I know when they told us something, 

that normally it meant—— 

Mr. MIRANDA. That was the marching order. I didn’t get to think 

about it. I just did it. 

Mr. LANDRY. Right. Unless it was something, you know, that was 

just unethical or immoral. 

Mr. MIRANDA. No, I never did anything morally—— 


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Mr. LANDRY. Right. But you wouldn’t take an order that would 

put your life in danger? 

Mr. MIRANDA. Yes, sir, I took orders that put my life in danger, 

but I would not—— 

Mr. LANDRY. In other words, an order that you felt—— 

Mr. MIRANDA. That went against my beliefs? No, sir. 

Mr. LANDRY. Right. Right. Right. So evidently, maybe the Director doesn’t believe what the President says. And maybe in his 

heart, he just wants to see y’all spend another $2 billion implementing this regulation and driving you out of business. 

Mr. MIRANDA. I am not sure if he is trying to drive us out of 

business. But I don’t think he has ever been behind the wheel of 

a truck. And I think I would like to invite him to come on out. I 

am sure if I couldn’t put him in one of my trucks, I am sure one 

of the members of OOIDA would be more than happy to take him 

for a ride and show him the realistic world of truck driving. 

Mr. LANDRY. Thank you. 

Chairman GRAVES. With that, I want to thank all of our witnesses for—— 

Ms. VELA ́ ZQUEZ. Mr. Chairman, I have a follow up question. 

Chairman GRAVES. Sure. 

Ms. VELA ́ ZQUEZ. Mr. Gallo, going back to the study, can you submit for the record at least and tell me what was the breakdown 

that the news survey containing 4,600 new operators, if there were 

different business sizes that were included in that sample. Do you 

have a breakdown for that? 

Mr. GALLO. Yes, I do. And also, in our written testimony, we included our research report. It is on page 7 of that report. 

82 percent were below 250 trucks. I can give you the actual numbers if you like. 

Ms. VELA ́ ZQUEZ. 82 percent below—— 

Mr. GALLO. 82 percent below 250 trucks. 

Ms. VELA ́ ZQUEZ. Okay. So within that sample of 82 percent—because that is a big number, 82 percent. 

Mr. GALLO. Yes. So if we break it down further, between 100 and 

249 trucks, there were 1,047 motor carriers. From 50 to 99, there 

were 1,368 motor carriers. And then from 25 to 49, there were 

1,379 firms that we looked at. 

Ms. VELA ́ ZQUEZ. Thank you. 

Chairman GRAVES. With that, I want to thank all of our witnesses for appearing today. Obviously your testimony has been 

very helpful, obviously demonstrating the impact that Washington 

regulations have on small business. 

With that, I would ask unanimous consent that all Members 

have 5 legislative days to submit statements and supporting materials for the record. Without objection, that is so ordered. 

With that, the hearing is adjourned. 

[Whereupon, at 2:52 p.m., the committee was adjourned.] 


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