Understanding Carrier Compliance
The logistics industry has undergone a significant transformation in recent years, primarily driven by technological advancements that have revolutionized the way shipments are monitored from start to finish. This enhanced visibility holds vendors and suppliers accountable for any freight-related carrier violations. However, as the industry grows, shippers use multiple carriers. Compliance violations can occur despite strategic measures, leading to significant costs. As such, shippers and brokers must remain vigilant about compliance regulations and stay updated with industry trends. Below, we’ll explore what carrier compliance means for shippers and brokers.
What is carrier compliance?
Carrier compliance means holding each carrier accountable to not only industry standards but your company standard. These standards help on-time delivery without damage and physical or financial harm to others in the supply chain. Carrier compliance is often accomplished by implementing an inbound freight routing guide.
The CSA Program
In 2010, The Federal Motor Carrier Safety Administration (FMCSA)’s Compliance Safety and Accountability (CSA) program established seven areas, or data points, used to score compliance. The higher the CSA score, the better the carrier’s reputation. The score is calculated on a scale from 0-100, with higher numbers indicating a worse level of safety. CSA scores are updated monthly through the FMCSA’s Safety Measurement System (SMS).
How the CSA score is calculated:
The FMCSA organizes the SMS data into seven Behavior Analysis and Safety Improvement Categories (BASICs):
Unsafe driving: speeding, improper lane changes, dangerous driving, and seatbelt violations.
Crash indicator: frequency and severity of crashes.
Controlled substances & alcohol: having a driver found to be operating under the influence.
Driver fitness: having an invalid license or being medically unfit to operate a CMV
Vehicle maintenance: failing to maintain upkeep like having faulty lights, brakes, or improper load securement.
Hazmat compliance: handling hazardous materials in an improper manner, such as failing to label materials or having leaky containers.
Hours of service (HOS): driving while sick or tired, or failing to maintain records of duty status for at least six months.
The closer to zero, the better. Generally, any score that’s 50 or over needs to be taken seriously. A score of 65 or higher in Crash Indicator, HOS Compliance, or Unsafe Driving will result in an FMCSA investigation (this lowers to 50 if you transport passengers or hazardous materials). Additionally, reaching an 80 score in any other BASIC categories will also lead to an investigation. Conversely, having a good CSA score can have several benefits, such as fewer DOT audits, lower insurance premiums, and an increased likelihood of landing more clients as a responsible and trustworthy carrier.
How Carrier Compliance can affect your business growth
It can create a competitive advantage
When you hire a carrier to transport your product, your company's reputation is on the line. The shipping quality your customers receive is directly related to the carrier you choose. To ensure that your product arrives on time and undamaged and to avoid accidents during transit, it's essential to conduct due diligence when selecting a carrier. Luckily, working with a brokerage like Sparrow Logistics, we take that responsibility off your plate!
Compliance provides greater transparency
As the logistics supply chain becomes more visible end to end, maintaining transparency regarding compliance and safety issues is more critical than ever. Customers have come to expect this kind of end-to-end visibility from modern logistics companies. A 2022 survey showed that 87% of customers claim the shipping and delivery experience directly impacts their decision to work with that merchant again.
One of the best ways to incorporate transparency into your business is by using a Transportation Management System (TMS). These systems track FMCSA and CSA scores, as well as deliveries in real-time, which can improve efficiency and reduce freight costs.
The Sparrow Standard
At Sparrow, we take carrier compliance very seriously. Trust is baked into the bones of our company and how we operate with our partners. Therefore, we created the Sparrow Standard. Our carrier vetting process ensures the driver has all required permits and certifications before hiring. We then use a report card-like structure to evaluate criteria. When a carrier passes the Sparrow Standard, they can be onboarded. Sparrow managers are alerted when a "new" carrier onboards and can further check the carrier's eligibility to haul for Sparrow, adding them if they're a good fit. Even when a carrier "passes" our vetting process, our team is trained to ask the right questions to ensure we are onboarding the exemplary Sparrow brand ambassador.
In the long run, carrier compliance benefits brokers, shippers, and carriers— so we must work together to hold each other accountable.
Contact our team today to learn more about our trusted flock and how they can do the heavy lifting for you!