Improve your CSA Scores, Crowded Highways for Memorial Day | Ep 10

Caroline: [00:00:00] Welcome to This Week in Trucking, the podcast that tells you what you need to know about the trucking market for the week in 30 minutes or less. This week we’re talking about diesel prices, freight market trends, and some tips on how you can get violations striked from your CSA scores and your safety record. Hey, Gurvir. How’s it going?

Gurvir: It’s going pretty good. We’re about like a few days or almost a month away from the official start of summer and that’s cool. It impacts trucking in some way. So we’ll discuss those things. But yeah, I’m doing pretty good. How about you?

Caroline: Good. I’m doing well. It’s good. It’s good. I’m in a different place now because the outlets in my office burned out this morning. So I get, you get a new angle. Oh. and our viewers get a new angle of us today. And they get a new angle of you because you’re always traveling all over, right?

Gurvir: So I’ve been in Maryland and my dad’s out on the road this week. And one of the things I’ve been doing. [00:01:00] Is that I always ask him how much did he book the load for, right? That’s always, a good anecdotal way to know, like how the market is doing. We read a lot of data and stuff, right?

Like sometimes there’s a lag in that data. So yeah, I’ve been, every day I’ve been asking him, Hey, how much did you book this load for? How much did you book this for? Is the rates going up or not? Cause you know, you can sense it as you’re building on. Think the market is improving just a little bit. So we’ll discuss that today.

Caroline: Yeah. Yeah. How long has your dad been out on the road? How many years?

Gurvir: Oh, 20 plus years. Yeah, 20 plus. He’s been driving

And now he’s on to dry van; he wants to be unloaded quickly and loaded quickly. So he’s like reefer. I’m done with reefer in the long wait time. So and he does local runs and short runs

Caroline: Yeah. Understandable. Understandable. All right. Let’s get into what the trucking market looks like this week. We’ll start off with diesel prices. So today’s national average is this week’s national average actually is 3. 789. This is down from last [00:02:00] week by almost 0. 06 and down from last year by almost 0.10. So this is really good news. We’re still seeing those diesel prices drop as the warmer months come on. We have less demand for heating fuel and we’re seeing that reflected in diesel prices. In the different regions of the country where you’re seeing some of the bigger changes. You’ve got the East Coast is looking like the only place where you’re seeing increases in prices (YoY).

California as well. California is always an outlier. It’s always the most expensive place to fuel. But the New England region and the lower Atlantic region are the only places where prices went up (YoY), up, and they didn’t go up by very much. Prices were, went down the most in the Gulf Coast and the Rocky Mountain area as well as the west coast minus California. Those are the places where we’re seeing the biggest changes (YoY). Most of them for the better.

Gurvir: [00:03:00] Yeah, this is really good to be seeing diesel come down I looked at a bobtail fuel finder this morning. Our lowest price today is in. Um, Missouri it’s 2.91 You so that’s good to see, finally seeing, diesel prices come down. I hope it continues, I think it’s come down a lot, so I don’t think there’s a lot of room left for it to continue to come down but this is good news. Let’s see, I think we’re dropping like five, six cents every week. Let’s see what happens next week.

Caroline: Yeah, definitely. And really all of the regions are down compared to last week. The only ones that I mentioned before that new England and lower Atlantic are the only ones that are up from last year, but all of them are dropping. All the prices are dropping across the board. Great news for owner operators and their bottom line for sure.

What can we see in the freight market and the spot rates this week? What have you heard from your dad out on the road and other friends out on the road and what are the numbers telling us?

Gurvir: Yeah, not a full recovery yet, but things are looking just a little bit [00:04:00] better. One of the things that we’re going to soon start sharing is the rejection rate. Caroline, we’ve talked about this reduction is a really good indicator of telling us when the market actually turns. But in the absence of that data, we’re working, we’re trying to get that data every week to all of our listeners. But in the absence of that data, we are noticing that the DAT reported that the drive in rates increased about 2 cents this month. we’re at 2.01. Just last week, we’re at 1.99. So there’s been about a two-cent increase in the dry van rates. Flatbed is about a dollar increase, sorry, a one cent increase.

We’re at 2.53 for this week. And then the reefer increased quite a bit, about 7 cents. And that’s because of produce season and produce season being kicked off everywhere, and that impacts the rates overall, there was also a road check week that, that means a lot of truckers and owner-operators just set out during the road check. And that can also be contributing to rates getting a little bit higher but just because of the produce season, Memorial Day is coming up and summer and everything, you’re probably going to just see a seasonal [00:05:00] adjustment. January, February are generally really slow, but we saw February had better rates than today, like May. So that is something to take into perspective that we should be beating January and February rates, right? We should be above like 2.10 a mile. And reefer should be, above 2.60, 2.70 to really see progress and market changing. But we’re still below January and February. Given that it’s the season produce and summer and Memorial Day we’re seeing some increase, but not a huge increase. So some good news. But I think we’ll continue to hover around here. I think the rejection rate has also been creeping up a little bit. I think we’re still under five, but now the bottom, I think, in the last few weeks was 3.7. So we’ve gone from 3. 7 rejection rate to 4 something. Hopefully that continues towards 5, 6 and 7. Again, the healthy market is if we can hit 7 to 10 percent rejection rate. 

Caroline: Is there some kind of delay between when we see the rejection rate go up and when we see spot rate [00:06:00] markets go up or do they go in tandem with each other?

Gurvir: pretty much in sync, so the rejection rate comes from contract, volumes and spot is, essentially a spot. I think again, there is some lag in that, like in how the rejection rates change on the contract rate versus, how quickly do you see that effect on spot? It’s fairly quick. I think you can start feeling it pretty quickly. I don’t think there’s a month or two months lag.

Caroline: like we’re talking weeks, days, not longer than that.

Gurvir: Weeks and days and stuff, right? For example, Cass report is, and there’s all these different indexes that we try to use to tell Hey, where the market is. Cass is based on invoice data. There’s a lot of LTL partial invoice data there, right? So you got to read some of this data with some nuance and knowing where the data comes from. DAT data, right? The last month we saw 1. 99, this month we’re seeing 2. 01. It’s all also coming from factoring companies and invoice data as well.

Like about a two to three week lag there as well. Rejection rate is pretty, I think there’s a least amount of lag [00:07:00] there, as far as I understand.

Caroline: Got it. You mentioned Memorial Day. So Memorial Day weekend is coming up. Rates probably likely to spike a little bit. People don’t usually like working on the holidays, but a lot of truckers do to take advantage of those rates. And a story came out that Memorial Day car traffic is going to be the worst it’s been in a very long time and certainly potentially even in this century.

So AAA came out with a projection that they believe almost 44 million people will be traveling at least 50 miles or more during the Memorial Day holiday weekend. That’s anywhere from the Thursday before to the Monday after. Monday’s actual Memorial Day; they’re going to come close to the record that was set in 2005, which was a total of 44 million people and travelers by car.

AAA predicts that it’s going to [00:08:00] be 38. 4 million travelers by car. And that is the highest that they’ve seen since they started tracking this data and predicting these things in 2000. This signals a very busy travel season for this year. And drivers out there, if they are working in these conditions, they need to know that traffic is going to be insane.

There’s going to be probably a lot of wait times and delayed traffic. Be on the lookout for that and good luck and stay safe, everybody. Will your dad work? Or you think, or he’ll take off holidays now?

Gurvir: A good rate or something, and sometimes, he’s just sitting on his sofa looking for, on the load board, on the DAT. And if he finds something, he’ll go. Otherwise, it just has to be worth his while. It’s not a big holiday I have to be home. Unless, the family’s doing something.

Caroline: Another article story that I found this week really interesting is how to use DataQs, to challenge violations in the FMCSA’s safety rating [00:09:00] system. So this came from Overdrive. I think that this is a brilliant article and every trucking business owner needs to read this and study it because it has so much good information in it.

So I’ll just give a quick synopsis of it. If you don’t know what DataQs is, it’s the FMCSA system that allows users to request and track a review of a federal or state data issue by the FMCSA. So if you think that you have gotten a violation that is either incomplete or incorrect, then you can challenge it through the system.

Basically, the reasons that you might do that are if the violation or crash was assigned to your carrier on accident. So one number difference and you might get assigned a crash or a violation that is actually from a completely different carrier. That’s something you should definitely challenge and you should be checking in on your CSA scores and monitoring these things so that you know what is happening.

Gurvir: I don’t [00:10:00] think a lot of carriers even check their scores

Caroline: They don’t.

Caroline: Sandeep Singh in our last event, I asked him what is the number one biggest mistake that carriers make and he said they check this stuff when it’s too late.

Gurvir: like when the insurance renewal is coming up and the insurance company is saying, Hey, your premium is going to go up and here’s the report. They’re like,

Caroline: And all of a sudden they’re like, wait, what? Why is my score so bad? And it’s too late by then.

Gurvir: it’s probably the single best way to reduce your insurance expense. 

Caroline: For sure. So this is the last ditch effort if you see violations that are incomplete or incorrect you can challenge them. So another reason that you might do that is if an officer just misunderstood the situation. People aren’t perfect and law enforcement officers might not necessarily understand every little detail of the regulation and so you can challenge things if you do have a good understanding of them and you have good evidence because that was the key thing in this article that they talked about was you need to have good [00:11:00] evidence if you’re going to challenge something because if you don’t have good evidence and it’s just you feel like it was unfair.

It’s going to get thrown out, right? There’s another situation that Sandeep from Deep Compliance talked about, which is if you took the violation to court and it was dismissed, it doesn’t automatically come off of your safety scores.

Gurvir: you have to do it

Caroline: You have to go in and ask for it to get removed.

Gurvir: parking or the any, citation that you get is different than the FMCSA safety scores. 

Caroline: So from my understanding, and I could be wrong, but from my understanding, citations are on for a driver.

Gurvir: Yeah.

Caroline: So that’s assigned to the driver and that affects your MVR. That affects your motor vehicle record, like your driving record. A violation is when it gets attached to your motor carrier authority.

And that’s what, both will affect insurance because it depends on what driver you’re insuring to, but they are different. But [00:12:00] you can still use the DataQs to challenge them. 

Gurvir: even if the driver citation or ticket is thrown out can you use that.

Caroline: You can because if it’s thrown out in court, you should be going and challenging the violation and getting it wiped from your record. Because otherwise it’s going to take three years for it to get wiped from your record and you’re going to have three insurance renewals, if not more, during that time.

Gurvir: Definitely be checking your safety score regularly. And then if you notice something that could be disputed come up and review those, review that citation or that, out of service violation and come up with a very good case that why this should be, removed. Especially if it’s not on your company, it’s another company or that, easy wins.

Caroline: That’s a really obvious one, right? If it’s just been assigned to your motor carrier authority and it doesn’t have anything to do with you, that’s a really obvious one. You’re going to have really good evidence for that, regardless. Another reason that you might challenge it is if the crash was the result [00:13:00] of the other driver being impaired or some other non-preventable, like a rear end.

So even if they get towed away, or even if your truck gets towed away, if it was a non-preventable situation. But, all of these require that you have good evidence.

Gurvir: Yeah 

Caroline: You have to document the evidence, get photos, get video footage, dash cam footage, compile all of that together, and send it in. But, I highly recommend people, they should turn that into like a textbook for trucking business owners.

Cause it was a great article. Tons of good information. We’ll link it below.

Gurvir: By the way, when I was a fleet owner, this has costed me several thousand dollars, right? 

Because I would not check my safety scores. I was young. I was like, Oh, look, let’s just focus on getting the good loads, the shippers and all those other things, right? This is the last focus. But the thing about this is that this is something that affects your future price. And you find out the day of, the week of that, your policy renewal is about to come. Your agent is telling you, [00:14:00] hey, yeah, you’re going to get a good quote.

And then suddenly your safety scores don’t add up and you get this quote that is very different than we were expecting

Caroline: Right.

Gurvir: And now you have to essentially make a decision that, am I going to be in business this year or not? How do I come up with this huge down payment because you did not pay attention to those safety scores. So yeah, if there’s one thing I would say, definitely you should, if you’re a large fleet, if you have more than three trucks, you should be, you know, looking at your scores every month and reviewing each and every citation and see who is it coming from a lot of times drivers don’t report it.

So this is a really good article. At least there’s a way to dispute it and get those removed.

Caroline: For sure. And that was something also that Sandeep said, and we’ll also link the video with him below, cause that was a really good event that we did, but he said if it’s more than just you and maybe one other driver, if you’ve got three or more drivers, you need to have an open, email chain, text chain with everybody to let them know when a citation or a violation happens.

You don’t have to say who it was. [00:15:00] You just say, hey, this happened. Remember that, this is against the rules, if it was a legitimate citation, everybody should know about it. And that open communication, you need to make sure you foster that among your drivers because otherwise they might not come to you and tell you that it happened because they’re scared of the consequences, right?

Gurvir: No, totally. And these are the things that are in your control.

No, awesome. This is a really good article. The article that I want to share the story that I want to share is that we all know that the fraud has been huge in the industry for the last couple of years and there’s a new bill that is being introduced that would let FMCSA fine double broker events and fine carriers that should not be brokering loads, that are brokering loads up to, $10,000. So this is a new bill that is being introduced. It’s a bipartisan bill. Got a lot of support. It’s essentially targeting carriers and brokers and load boards and trying to penalize them [00:16:00] for not following, essentially your carrier or your broker or, whatever authority you have involved following those guidelines, right? So this would essentially penalize carriers that are brokering loads, primarily carriers that should not be brokering loads, right? So you definitely want to find out, and you want to know, being in the industry, you should know what is essentially a broker and what is a carrier, right?

For example, if you’re a carrier to carrier, you’re working and you’re giving loads away, that’s essentially a brokered relationship. So you want to read into that unless, especially if you don’t have a lease agreement, right? If you’re two carriers that are leased onto each other, that’s a leasing arrangement. But if you have no leasing arrangement together and you’re simply just giving a load to your friend or someone else randomly on, on a load board or someone else that is considered brokered freight. And you could be fined up to 10, 000 and I would say if you get flagged for that, you will get reported because everybody’s so sick of fraud in this industry that people will flag your company.

If they even notice one double brokering event. Sometimes there are situations where your friend has to deliver a load. You couldn’t make it. I’d rather cancel the load and give it back to the broker and just tell the broker that.

Caroline: Or just make a referral. Yeah guess then you don’t make money on it, right? But, you should just refer your friend to that load if that’s, If that’s what you want to do.

Gurvir: Yeah.

Caroline: I do think that in these kinds of double-brokered situations, sometimes we look at it as very black and white of, evil people who are double brokering loads and then, the good people that get scammed.

Caroline: And sometimes that’s true, but I do think that there’s a gray area there where some people might want to take advantage of that kind of situation. But you just have to be really careful about it because it can, if you’re, double brokering loads it’s making everybody else worse off in the industry.

And it’s not gonna help you in the long run either. 

Gurvir: But you have to speak to the broker and say, Hey, look, I have access to other carriers or whatever the situation may be.

But generally a broker will not give another broker [00:18:00] freight. To be double broker. That’s where the original double broker term actually comes from. I think a lot of the double broker situations in the past actually used to pay out. Like it’s like my dad getting a load from his friend,

The broker doesn’t know and this is a lane that he’s been running for a few years and now my dad is in California and used to come back. He’s like, Why don’t you just take a load from I have a load i’ll give it to you and the broker never finds out. Who would be a fraud? You know who the carrier was, right?

But in those situations, the carrier always got paid, but the fraudsters looked at the scheme and said, Hey, look, we’re ready to commit a lot of actual double broker scam and fraud. Double brokering has been going on for a while and it’s actually really hard to prevent. So that’s why FMCSA is actually looking at all these different things. And other things is that they’re going to make sure that you have an actual address, not a UPS or a PO box address. So there’s going to be, they’re going to be validating addresses. And it also mandates brokers and freight forwarders to disclose connections to other regulated entities, to curb double brokering.

So if you’re related to other brokerage, you’re going to have to disclose those things. and the [00:19:00] amount that in the industry annually that the industry suffers from double brokering scam is about 800 million. So the end carrier is the one that doesn’t get paid,

Caroline: I do wonder though, this 10, 000 fine, who’s actually going to pay it? If you’ve already skipped out, if you’re being reported, it means that somebody knows that you’re double brokering now. 

Gurvir: Yeah.

Caroline: How are they actually going to collect the 10, 000?

Gurvir: We discussed this in previous days. They’re also going to have ID, they’re gonna actually verify identifications. And that’s going to weed out a lot of players.

Caroline: But that’s before this happens, right?

Gurvir: Or I’m not sure what the timelines are. This is, I think where this is going to help is primarily a legitimate carrier where you know the identity, them not committing double brokering, Because

Gurvir: I think FMCSA is not going to say look, we only need to stop double brokering with people that are actually not paying the end carrier. to say, look, we need to stop double brokering throughout

Gurvir: Like whether it’s a legitimate carrier also doing it. So this is more so preventing that. And then the ID and the address verification and then the identity verification that [00:20:00] is more towards taking out companies that are offshore out of U. S. And they’re actually legitimately committing double-brokering.

Caroline: Yeah. Any progress is good progress, right? It’s a little late in the game to be taking action on it, but we’ve been talking about this for two years now, at least. But it’s good sign. Any progress is good progress.

Gurvir: Yeah, it’s crazy. How can you be hauling like hundreds and thousand dollars worth of cargo and nobody knows who you are, right? Nobody knows the owner, right? You go transfer 40 bucks to Western Union, they ask for your ID, right? It’s hauling all these things and it’s such expensive commodity.

Even the brokers would never ask for your ID. If I’m a legitimate broker, I know some of them may be doing this right now. I would actually have them on board through a KYB KYC process. At the end of the day, it’s your customers’ freight on these trucks, you should know what’s going on.

Caroline: Yeah. Absolutely. All right, let’s get into some [00:21:00] questions from our handy dandy Facebook groups. I have one question from someone on the owner operator group. My old South Florida progressive commercial truck insurance was 13, 000. I canceled my MC for two years until rates improve. Now they want 34, 000.

Caroline: Can someone help explain this nearly 75 percent increase? Ouch.

Gurvir: That’s why you should never lapse. The main single answer here is because you had a lapse.

Caroline: Yep.

Gurvir: They’re basically treating you like a new [carrier]. That’s the idea here. That the way you get low insurance cost is by not having your insurance lapse, right? And that’s a tough decision, right?

The market sucks. Yeah. And you have to make this decision that, hey, should I just continue running or should I just cut everything off and then come back into the industry? But the cost that people often forget about is [00:22:00] that, hey, if there’s a lapse in your insurance that would mean that you pay a high insurance cost when you come back.

Gurvir: I would say shop around, but that’s the main reason, by the way, because you had a lapse and everybody’s treating you like a new carrier, would say shop around, progressive is always going to be really expensive. Talk to multiple agents and try to see if you can get something really competitive.

That is an absurd number. And by the way, in two years, underwriting guidelines, change inflation, all these things play into the pricing. I would definitely suggest this person to shop around and see if they can get up cheaper. I would say don’t expect that 13 K

Caroline: No, definitely not. Not in 2024. You’re not gonna be paying that much for insurance in 2024. I would be surprised if it was more than double though. Double already would be such a big hit but 34. thousand dollars. Ouch. And he said it’s a 75 percent increase. It’s way more than that actually.

It’s more than double. So it’s over a hundred percent increase in the price that he’s getting. [00:23:00] But yeah, definitely shop around for insurance. We have a whole article on how to shop for insurance. So go check that out in the link below. 

All right. Another question that we actually got on our website chat is from Javier who asked, hello, where can I find a list for all permits and certifications for a truck owner-operator in California? So I know that you had your business based in Maryland, but I know you also have a lot of friends and family in California, and you know some people out in the business in California.

Gurvir, what do you know about the permits in California?

Gurvir: Yeah, I’ll start instead of California. I’ll come into California. I’ll start with the national, like the trucking company in the U. S. What do you need? You obviously need to be registered with the FMCSA, an authority, right? That’s number one thing. You need the MC number and DOT number.

If you’re crossing state lines, DOT number, you only need it if you’re staying within the state. If you’re crossing state lines, then you need both. You need the MC [00:24:00] number and the DOT number. After that, you’re probably going to need IRP, which is your state permit, like the essentially TAGS IRP International Registration Plan.

You’re going to also need a UCR, and you’re also going to need the IFTA, right? These are like the general high level permits and licenses that you need. So FMCSA authority. You need IRP, UCR, and IFTA, right?

Caroline: Yeah.

Gurvir: I’ve never operated within California but some of the things and resources that you should look into is the California Area Resource Board, the CARB, and see what, what, based on your truck what are the regulations if you’re running reefer.

By the way, there’s a lot of questions around here, what kind of operation you’re running but CARB is a good resource to look into, California Department of Transportation, Caltrans and what permits do you need there? And then you can also look at the California Department of Motor Vehicle and then California Highway Patrol, right?

Those are the four departments that I will look at. But mainly just high level, I would say, you need to be CARB registered if you’re running for reefer and stuff. There’s a lot of guidelines on, on, how old your equipment can be.

But I would check out those resources in California to see what exact permits and licenses are available.

Caroline: Yeah, definitely. And anything that we say here obviously is subject to change, right? So there’s always new stuff coming up out especially in California, especially around emissions. So definitely check those things out. CARB is a really big one. But also you’re going to need to file in that state as a business.

You may need a California authority. So that’s a California identification number, California motor carrier permit. You may also need a California employer pull notice if you’re going to be hiring drivers. And you’re also going to need a franchise tax board number. That’s like an EIN, but for the state.

So make sure you get that. And then CARB is the big one. This has regulations around drayage trucks emission screening and testing. There’s the new advanced clean fleets rule, which is going through the courts right now and getting challenged. But lots of stuff coming out around phasing out [00:26:00] internal combustion engines and phasing in electric trucks.

And so there’s a lot of controversy around that. But it’s good to know what trucks are going to be legal out on the roads by when so we have an article all about the trucking permits you need for a business in California, and we’ll link that below as well. Awesome. All right.

Gurvir: Permits in California, huh? California is a unique state. They want permits.

Caroline: Unique is a very kind word to use for the state of regulation in California. I know a lot of carriers are not as kind in their description of it. But yes it’s a lot. Running a trucking business just requires so much paperwork and so much compliance and knowledge of compliance.

I think that’s gotta be one of the most underrated things that people don’t necessarily think about when they’re going to start a business. So good for you, Javier, for asking that [00:27:00] question. And I hope the article that we wrote and sent to you helped.

Gurvir: Awesome. We’re seeing some improvement in freight rates. Hopefully next week we can continue to bring more and more venues.

Caroline: All right. Thanks, Gurvir, for joining me this week. And we’ll see you guys next time.

Gurvir: Awesome. Drive safe, everyone.​