Investigation accentuates hole in FMCSA motor carrier vetting process

The Trucker Staff

11/18/2010

FIRST OF THREE PARTS

©2010 Trucker Publications Inc.

The Federal Motor Carrier Safety Administration is ill-equipped to adequately vet the influx of applications — hundreds each week — for the various authorities sought by motor carriers, creating a situation where companies needing more scrutiny can easily slip through the cracks,  a two-month investigation by The Trucker has found.

The investigation started when The Trucker learned that just days before Hester Inc. — the motor carrier involved in an 11-fatality, much publicized accident in Kentucky March 26 — was scheduled to be shut down by FMCSA,  an existing carrier with brokerage authority, FTS Fleet Services, was granted operating authority to do business from Hester’s Fayette, Ala., facilities using much of the same equipment, the same drivers and some of the same operations personnel.

The application requesting the new authority was signed by Scott Hester, who was president of Hester Inc. and who listed himself as president of FTS Fleet Services.

What’s more, based on numerous interviews, the FMCSA apparently did not make the connection between Hester Inc. and FTS Fleet Services until questioned by The Trucker.

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Hester Inc. was fined $13,900 for violations of FMCSA regulations based on the results of its compliance review following the March fatality on Interstate 65 near Munfordville, Ky. The driver of the truck, Kenneth Laymon, 45, of Jasper, Ala., was one of those who died in the accident.

FMCSA records show the fine has not yet been paid. It ranks in the top 10 percent of fines levied by FMCSA thus far this year, according to data on the FMCSA website. Hester Inc. grossed $3.6 million in 2009, according to DOT documents.

After the compliance review, Hester Inc. was notified on April 5 that FMCSA had issued a proposed “unsatisfactory” safety rating and that it would have to cease operations in 60 days if actions were not taken to improve the rating to “conditional” or “satisfactory.”

The review cited one acute violation and three critical violations.  Acute is the more serious of the two types of violations. One acute violation plus two or more critical violations during a compliance review result in a proposed unsatisfactory rating.

As president of Hester Inc., Scott Hester made an effort to follow the recommendations set forth in the compliance review and took documentation to FMCSA to show what he had done and would be doing to correct the proposed unsatisfactory rating, but FMCSA rejected his plan, FMCSA officials said.

So, about to lose his DOT ticket to operate, Hester turned to a longtime business associate who had brokerage authority, filled out a four-page FMCSA application to upgrade that authority, and a new trucking company was born.

And by June 10, five days after Hester Inc. had been ordered closed, former Hester trucks and drivers were on the road as FTS Fleet Services, according to inspection reports.

Had changes been made to assure the carrier was now operating in a safe and compliant manner, or had Hester simply painted over the logo and continued business as usual?

The FMCSA has no way of knowing, multiple sources have told The Trucker.

In speaking with sources knowledgeable about the process, The Trucker learned that cases where companies about to be shut down file for a new DOT number under a new name can easily go undetected because of the heavy load of applications and because of a lack of information sharing between divisions at the agency.

Had the application in question been filed by a motor coach company or a household goods carrier, it likely would not have been approved until after any fine was paid and federal officials were confident the carrier could operate in a safe manner, multiple sources told The Trucker.

In 2008, FMCSA instituted a rigid vetting process for motor coaches and household goods carriers in the wake of several motor coach crashes involving companies that had been shut down because of unsatisfactory ratings, then reinvented themselves under new names and DOT numbers.

The program was never extended to motor carriers, primarily because the hundreds of motor carrier applications that come in each week would simply overwhelm the existing staff assigned to review applications, The Trucker learned.

“While the agency's carrier vetting program currently applies to passenger and household goods carriers, the agency is working to expand the program to commercial trucking companies,” Candice Tolliver, FMCSA spokesperson said.

There are some 3,900 motor coach companies in the U.S. compared with more than 500,000 motor carriers. The magnitude of cases can be seen in a five-day period in early November. In that time frame alone FMCSA dealt with 128 name changes, 4,453 revocation actions and 871 new applications for various authorities, according to the FMCSA website.

Sources said under the current process in place, none of the applications for name changes would have been vetted to screen for “chameleon” carriers, which the FMCSA defines as a carrier that attempts to register as a new entrant and operate as a different entity under a new U.S. DOT number in an effort to evade enforcement actions or out-of-service orders.

But the owner of FTS Fleet Services, Joe Frederick, while acknowledging Hester Inc.’s safety record “wasn’t very good,” said he’d shelved about a quarter of the company’s tractors and numerous trailers that were unfit for the road since he opened for business.

As of Nov. 16 (the latest data available from FMCSA), FTS has had 61 driver inspections with one resulting in out-of-service violations; and there have been 27 vehicle inspections with four OOS violations, a rate well below the national average for motor carriers.

Frederick, who also owns a non-trucking business in his home city of Little Rock, Ark., said he hasn’t visited the Alabama location since he took charge, but that he had had previous business dealings with the Hesters and knew the family and became aware of the opportunity to purchase the assets of the business and did so.

“We’ve cleaned up,” Frederick said in an interview with The Trucker Oct. 15 during which he repeatedly invited FMCSA to come visit his operation. “We’re down from 35-40 trucks to about 25 and we’ve gotten rid of as much of the old stuff as we could. We just put on a 2006 truck and we have two more coming. I have a lady there doing the safety training. We’ve had safety meetings. So when they came in (for the compliance review) they said ‘here are the things you have to fix.’ We’ve kind of done overkill. I have some 20 drivers and a fulltime safety lady whom I can hardly afford.”

Frederick stressed that Scott Hester was not involved in management of FTS Fleet Services, but does work in the maintenance shop.

Read more about the FTS application, their current operations, and FMCSA’s reaction, in Part 2 Friday on www.thetrucker.com.

The Trucker staff writers Dorothy Cox, Barb Kampbell, Kevin Jones and Lyndon Finney contributed to the research, writing and editing associated with this article. The staff can be contacted to comment on this article at editor@thetrucker.com.

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