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Bits & Pieces

Volume 19, Edition 10

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Thank you to all who attended Shuie’s informative webinar on VITAL+ and all of the new features available to help you make better decisions.  The feedback was great and we welcome more topics for consideration. Let us know what you want to hear about.

I had a wonderful time at the newest IMUA regional Chesapeake meeting. Those in the area should considering participating in this regional group.  From underwriters to brokers to claims folks they had it all and as always helped to educate the industry.

This month we report:

MILITARY DRIVERS WELCOME – The FMSCA has awarded $1 million toward programs aimed at helping train military veterans to be commercial drivers.  The funding is provided through FMCSA’s Commercial Motor Vehicle Operator Safety Training grant program. In related news the FMCSA has implemented rules to make it easier for military veterans to become commercial drivers by simplifying the process to obtain a learner’s permit or driver license. The rule extends the period of time for applying for a skills test waiver to one year from 90 days after leaving a military position requiring the operation of a CMV. This final rule also allows a state to accept applications from active duty military personnel who are stationed in that state as well as administer the written and skills tests for a CLP or CDL.

BEER RUN – The newest type of beer run took its inaugural test this month. Uber delivered a shipment of beer on a driverless vehicle (truth be told the driver was in the truck – just not driving).   So who wants to write the cargo coverage for that?

ATRI CRITICAL ISSUES IN TRUCKING – The ATRI has released its survey of the top trucking industry concerns.  ELD, Hours of Service, the economic impact of trucking regulations, trucking parking and the economy were the top 5. You can review all of the concerns here.

NEED AN EXCUSE TO STAY HOME? – I could not resist putting this in when I found it during my research. When asked to share the most dubious excuses employees have given for calling in sick, employers reported hearing the following real-life examples:

* Employee said the ozone in the air flattened his tires.

* Employee’s pressure cooker had exploded and scared her sister, so she had to stay home.

* Employee had to attend the funeral of his wife’s cousin’s pet because he was an uncle and pallbearer.

* Employee was blocked in by police raiding her home.

* Employee had to testify against a drug dealer and the dealer’s friend mugged him.

* Employee said her roots were showing and she had to keep her hair appointment because she looked like a mess.

* Employee ate cat food instead of tuna and was deathly ill.

* Employee said she wasn’t sick but her llama was.

* Employee had used a hair remover under her arms and had chemical burns as a result. She couldn’t put her arms down by her sides due to that.

* Employee was bowling the game of his life and couldn’t make it to work.

* Employee was experiencing traumatic stress from a large spider found in her home. She had to stay home to deal with the spider.

* Employee said he had better things to do.

* Employee ate too much birthday cake.

* Employee was bitten by a duck

Any comments or other funny excuses- share them. We all need a laugh.

CVSA 2016 INTERNATIONAL ROADCHECK – The Commercial Vehicle Safety Alliance (CVSA) released the results of its 2016 International Roadcheck. A total of 62,796 inspections were done, with 42,236 of those inspections being intensive Level I inspections,   21.5 percent of vehicles and 3.4 percent of drivers were placed out of service due to critical item violations. Of vehicles placed out of service, brake adjustment and brake system violations combined to represent 45.7 percent of out-of-service vehicle violations. The top driver out-of-service violations were for hours of service (46.8%) and false logs (16.4%)

CSA ENHANCEMENTS – The Federal Motor Carrier Safety Administration (FMCSA) announced a public preview of the latest proposed enhancements to the SMS website which will have a 60 day public comment period.  No changes will be implemented in the public SMS website display until after completion of the National Academies of Sciences Correlation Study which was required by the FAST Act. Shuie and I will be meeting with the National Academies of Sciences to discuss the impact of CSA and its use by the insurance industry.

FLEET FAILURES – More trucks have been pulled off the road in the third quarter. Avondale Partners reports that 4,475 trucks came off the road which was more than quadruple the 1,005 in the year-earlier period and more than double the 2,050 in the second. This is the highest failure since third quarter of 2014.  The reported average number of trucks in failed fleets was 24, an increase over past quarters. We remind you to pay attention to motor carrier financials and submit them to our trained analysts to evaluate.

NHTSA FORMS COALITION TO ELIMINATE FATALITIES IN 30 YEARS – With traffic fatalities up 7.2% in 2015, and an additional 10.4% in the first six months of the year the NTHSA has created the Road to Zero Coalition to find a way to fix the upward swing in fatalities.  The NTSB reports that half of the increase in traffic deaths in 2015 could be attributed to the rise in vehicle miles traveled thanks to lower fuel prices and an improving economy, but that  94% of fatalities can still be blamed on human behaviors such as distracted driving, speeding and drug and alcohol use. Efforts will be made to find ways to reduce this exposure.

TRUCKING IS HERE TO STAY – The Freight Transportation Forecast projects a 35% rise in total freight tonnage between 2016 and 2027. The report also estimated a 27% rise in truck freight over the period, including 2% annually between 2016 and 2022 in the truckload sector and faster increases in less-than-truckload. Intermodal transport is also expected to increase. Trucks, rail and water modes are expected to lose market share to pipelines as U.S. energy production grows.

By the time we get to next month’s Bits and Pieces, the Thanksgiving holiday will have passed.  We take this time to thank you for your support.  It is a pleasure to work in an industry with such great people.  Have a marvelous holiday.

CASES

AUTO

The Middle District of Pennsylvania held that a defendant could not shield itself from plaintiffs’ negligent hiring claim by labeling itself a freight broker. The Court held that the FMCSRs do not preempt Pennsylvania common law claims such as negligent hiring which are made against a broker. The Court held that the broker can still be liable under Pennsylvania law for its alleged failure to hire a careful and competent contractor, denying summary judgment to the broker. (Ramos-Becerra v. Hatfield, 2016 WL 5719801)

The 11th Circuit upheld a judgment against a motor carrier concluding that it was not error to admit evidence of the motor carrier’s policy regarding following other vehicles when there was evidence that the driver failed to keep a safe distance between traffic ahead.  (Rogers v. Southstar Logistics, 2016 US App. Lexis 18463)

Plaintiffs’ effort to get a Court to address the impact of the MCS-90 on a case pending in State Court failed when the Eastern District of Louisiana stayed the action pending resolution of the state law case. The plaintiffs were looking for an answer on whether the MCS-90 was insurance which needed to be exhausted before UM coverage applied.  (Fortenberry v Scottsdale Insurance Co., 2016 US Dist Lexis 142476)

CARGO

Someone needs to figure out, exactly, what a broker is liable for and whether it can pursue a motor carrier for indemnity.  This month the District Court in Ohio remanded a complaint back to state court in an action filed by a broker against a motor carrier for cargo damage.  The Court held that broker’s breach of contract claims—grounded in the indemnification and contribution provisions within the Broker/Carrier Agreement—were not preempted by the FAAAA and were a straight state law claim. The broker was not suing as an assignee of the shipper. (Total Quality Logistics v. Lith Transport, 2016 WL 5476148)

Another case out of Michigan addressing the obligations of a claimant to establish a prima facie case for recovery when the claimant rejects a shipment without a full inspection. The Western District of Michigan held that there was a question of fact as to whether plaintiff had established damages when the motor carrier produced expert testimony that the car parts could have been tested to determine if the entire shipment was damaged.  The plaintiff argued that the cost to test would exceed the value of the cargo.  The Court held that it was a question of fact.  (Mitsui Sumitomo Insurance Co v. Mac R Behnke Rentals, 2016 U.S. Dist Lexis 145621)

While a motor carrier faced a default judgment, and was found liable to the broker for a cargo loss, the broker was not permitted to pierce the corporate veil and also seek recovery from the principal owner. The Court held that the action against the shareholder was preempted.   The District Court in Florida also agreed that attorney’s fees were not recoverable under the Carmack Amendment.  (Scotlynn v. Cold Ground Transport, LLC.,  2016 WL 6066682)

The Fed Ex limitation of liability for domestic air shipments was upheld in the Eastern District Michigan.  The Court held that the ADA preempted any claim outside the bill of lading and that the plaintiff was afforded the appropriate opportunity to declare a value.  (Golden Hawk Metallurgical v Federal Express Corporation, 2016 WL 5791198)

Be careful what you admit to.  One shipper had to go back to the Court to seek permission to amend answers to admissions when it appeared to have admitted its participation in drafting or agreeing to the terms of a bill of lading which contained a limitation of liability.  The shipper claimed to have misunderstood the intention of the admission. The Court let the plaintiff change the admission as no prejudice was suffered to the defendant by permitting the issue to remain a fact question.  (Allianz Global Risks v. Kutzler Express, Inc., 2016 WL 6108774)

For you physical damage insurers, The 7th Circuit reversed a decision granting summary judgment to a repair facility when a truck went on fire during the repairs. Fire investigator’s expert conclusions, that truck’s diesel and brake fluid systems worked on by automotive repair shop were “more likely related to the cause of fire,” were not speculative, and thus created triable issue of fact on proximate cause element of owner’s negligence claim; that the truck was under the exclusive management and control of the repair ship and that accidents like that did not happen if you exercised reasonable care, allowing the case to proceed under the doctrine of res ispa loquitor.  (Blasius v. Angel Automotive, Inc. 2016 WL 5929824)

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