FTS Fleet Services owner says he's running safe carrier, vows to keep it that way

The Trucker Staff

11/19/2010

SECOND OF THREE PARTS

Click here to read Part One

©2010 Trucker Publications Inc.

While acknowledging he inherited some safety issues and some bad equipment when he purchased the assets of troubled carrier Hester Inc., Joe Frederick, owner of FTS Fleet Services, says he is doing his best to make sure his trucking company meets government guidelines.

Under less scrupulous management, however, the outcome might have been very different — a new verse, but the same unsafe highway song — with the Federal Motor Carrier Safety Administration being none the wiser, The Trucker determined during a two-month investigation.

Prompted by a tip from a source familiar with commercial vehicle safety enforcement, The Trucker in September began looking into the fate of Hester Inc., which was to be shut down late last spring following an 11-fatality wreck and a subsequent unsatisfactory compliance review by FMCSA.

But before Hester could be closed for good, Frederick — who had a business history with the Fayette, Ala.-based carrier and an existing DOT brokerage number — obtained FMCSA authority to operate FTS Fleet Services as a property carrier from Hester’s facilities with some of Hester’s trucks, drivers and personnel.

And Frederick didn’t have to do the right thing — weed out the faulty equipment and make stringent changes to Hester’s operations — for the FTS application to get the truck safety regulator’s approval, according to numerous sources familiar with FMCSA's commercial trucking vetting procedures.

Essentially, as the investigation highlights, a mammoth number of motor carrier applications must be handled by a relatively small number of FMCSA staff, making it more likely that “chameleon carriers” — name-change artists who’d rather get a new letterhead than operate safely — can escape notice.

In this instance, a hole in the agency's applicant screening process — yes, big enough to drive a truck through — hasn't resulted in a highway disaster. Still, as the investigation demonstrates, an application whose every essential detail is linked to a company with a failed safety record was passed along and approved in an impressively timely manner.

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The following are some details of FTS’s application process:

• FTS Fleet Services is a Little Rock, Ark.-based company that had contract authority dating back to 1986 and broker authority dating to 1989. The broker authority had been revoked and was reinstated in 2002; contract authority was revoked in 2008 and reinstated May 11, according to FMCSA records.

• The FTS Fleet Services' common carrier application listed the business address and phone number of Hester Inc.

• Hester Inc. president Scott Hester is listed as president of FTS Fleet Services, although he actually works in the maintenance shop at FTS. His brother Steve Hester, who now manages FTS, was listed on the OP-1 (application for operating authority) document as “representative.”

• The application for the FTS trucking authority was signed by Scott Hester 13 days before Hester Inc. was issued a revocation notice from the FMCSA saying it would be shut down June 5. The name of company owner Joe Frederick does not appear on the OP-1.

• The application for operating authority also contains a section that requires the applicant to disclose any relationships the applicant has had with any other FMCSA-regulated entity during the past three years, including the entity’s DOT safety record.. According to the OP-1 entry, Hester Inc. did not have a DOT safety rating, which is arguably miselading. Hester Inc., in fact, did not have safety rating prior to the April compliance review, but FMCSA had proposed an “unsatisfactory” rating as a result of that CR.

• On May 21, FMCSA approved the application and upgraded the FTS Fleet Services authority, permitting the company to operate trucks in interstate commerce. 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.

• After learning of the situation in September when questioned by The Trucker, the FMCSA launched an investigation of FTS.

Steve Hester maintains that there was no intention of trying to evade action by FMCSA in operating as FTS Fleet Services.

“Like Joe and I expressed to the FMCSA and the DOT, this is not the same company. Period. End of story,” Steve Hester told The Trucker. “Like what I told the FMCSA and DOT, if a man buys the assets of a company that has 20 trucks, and you have a guy who was working for a company, of course there’s going to be a change over and the guy is going to do stuff at your behest. So that’s where the OP-1 came into being. Joe had his contract authority and his brokerage. He didn’t realize it needed to be common [operating authority]. It was ‘hey, Scott, you’ve dealt with the Department of Transportation before, you know what needs to be done, could you call and get this done for me?’ It was just a misstep. Nobody thought it was the end of the world that all this [the investigation] was going to come of it.”

In response to the recommendations in the compliance review, Scott Hester took “two or three notebooks full” of documentation to FMCSA’s Atlanta regional, Steve Hester explained.

“They told him [Scott] he’d have to present his case to the Alabama state office and that very afternoon he was in Montgomery with the documentation,” Steve Hester said. “But they said it wasn’t good enough.”

The FTS Fleet Services operations in Fayette have been visited twice by FMCSA officials since The Trucker began its investigation — at least once in response to a question posed by the newspaper. The first of those two visits earned the company a satisfactory safety rating from FMCSA officials, Steve Hester said.

Even now, Frederick is frustrated because the same agency that granted him operating authority and told him he had a satisfactory rating later subjected him to a compliance review and has not been quick to let him know whether FTS Fleet Services has a future.

Indeed, FMCSA took less than one week to issue its findings of the compliance review on Hester Inc. after the accident. It’s been many more days than that since investigators last left FTS Fleet Services’ headquarters.

Steve Hester told of the initial visit to FTS Fleet Services by the FMCSA.

“He was here for four days and when he left, he gave us the paperwork and he said ‘you are a satisfactory company, and not only a satisfactory company, you’re pretty much a role model. We can’t find anything. Anything you were supposed to do is done,’” he related.

The day after the first investigation ended, Steve Hester received word that two investigators would return the next week based on information provided to FMCSA by “the media.”

”They said 'the media' sent us some e-mails and we have some questions we need to get the answers to,” Steve Hester said during an interview with The Trucker. 

The Nov. 1 return visit appears to have coincided with the realization by FMCSA — based on questioning by The Trucker — that Scott Hester had signed the application submitted by FTS.

After four days, the investigators left, telling Steve Hester he’d be hearing from FMCSA.

FMCSA spokesperson Candice Tolliver said the agency won’t comment on the record until the investigation is complete, only acknowledging that an investigation is under way and that FMCSA is looking into whether Scott Hester, by applying for new authority, was trying to evade federal regulations.

When told what Steve Hester said the investigators shared with him about the reason for the second visit, Tolliver did not attempt to confirm nor deny the accuracy of his statement.

Asked about the possible outcomes of the visit, Hester said the investigators told him that either FMCSA would decide FTS Fleet Services was a “chameleon” carrier and in that case he would receive a cease-and-desist order, or it would be given a satisfactory safety rating and allowed to continue operation.

The Alabama Trucking Association confirmed the new company is a member of the state organization, and had sought assistance in improving in its operations.

“FTS applied for membership of our Association and was recently accepted as a full member,” said Ford Boswell, a spokesman for the Alabama organization. “Our staff safety experts are working with executives from the company to improve the operation’s safety rating.”

Kenneth Laymon was among the 11 people who died in the tragic accident that led to Hester Inc. being put out of service. In Part III next week, read about how information about Laymon released in the days and months after the accident turned out to be inaccurate, but has never been corrected on the record, about his last trip and about Mr. Laymon’s plans for a new job that he was to start the Monday after he died.

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

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