FMCSA Rebuts Analyst’s Claim of No Link Between Truck Crash Rates, CSA Scores

The Federal Motor Carrier Safety Administration took exception recently to a little-noticed stock analyst report that said there was no relation between two of the agency’s key safety scores and actual truck-involved crashes, saying there is actually a strong correlation between a carrier’s unfavorable safety scores and high crash rates.

The analyst report, published in November by Wells Fargo Securities LLC research, said there is no “meaningful statistical relationship” between truck-involved crash rates and the carrier scores in two of the agency’s critical Compliance, Safety, Accountability categories.

“We continue to find various aspects of the program problematic,” said the study, adding, “It is still not clear to us whether the carrier safety performance measures accurately portray either the risk profile of individual carriers or the likelihood of an accident.”

FMCSA said it “strongly disagrees” with the Wells Fargo conclusions and cited broad-based research by the Volpe National Transportation Systems Center and the University of Michigan Transportation Research Institute.

“The Volpe Center analysis showed a statistically strong positive relationship between carriers with high BASICs percentiles and high subsequent crash rates,” FMCSA said.

The Wells Fargo study — “CSA: Good Intentions, Unclear Outcomes” — made public in November was an analysis of the accident frequency of the 200 largest carriers in the CSA database and their statistical relationship to the safety scores in two of the six BASICs categories — Unsafe Driving and Fatigued Driving.

The agency also said an “independent evaluation” by UMTRI done prior to the program’s rollout found “robust statistical relationships” between the Unsafe Driving and Fatigued Driving BASICs and crash risk.

But Wells Fargo said that the CSA program’s increased scrutiny often leads to an increase in carrier violations, making it difficult for carriers to improve once they “breach” a BASICs threshold.

The equity analyst research said the program has created a “negative feedback loop” for carriers with unfavorable BASICs, noting that there is a high correlation between frequency of inspections and Unsafe Driver BASICs percentiles.

The CSA process, begun in December 2010, takes each carrier’s safety events — roadside inspection violations and crashes — and places them in seven respective categories known as BASICs, which stands for Behavioral Analysis and Safety Improvement Categories.

FMCSA also said that while the Wells Fargo study looked at 200 carriers, the “comprehensive” Volpe study of FMCSA’s carrier data sample was 29,000 carriers for the Unsafe Driving BASIC and 42,000 carriers for the Fatigued Driving BASIC.

“The FMCSA has carefully reviewed the Wells Fargo analysis and does not agree with its main premise that there is insufficient correlation between the Behavior Analysis and Safety Improvement Category scores and crash risk,” Anne Ferro wrote in a March 16 letter to David Palmer, president of the Commercial Vehicle Safety Alliance and an assistant chief with the Texas Department of Public Safety.

“We believe that our safety program’s focus on crash risk helps to prevent and reduce actual accident frequency,” Ferro stated.

Palmer had received a copy of the report from John Esparza, president of the Texas Motor Transportation Association, and asked FMCSA to review it and provide comments on the report, according to Ferro’s letter.

Neither Palmer nor Esparza returned a phone call seeking comment.

Anthony Gallo, a senior analyst with Wells Fargo, said he has never seen such a response to equity research from the FMCSA since he began working as an analyst in 1994.

“When we ran a statistical analysis for the top 200 carriers, we could not find a correlation between CSA scores that were above threshold and actual accident incidents,” Gallo told Transport Topics. “Apparently, FMCSA didn’t see it that way, and I’m sure they didn’t like the report.”

A disclaimer in the research report said that Wells Fargo “does and seeks to do business with companies covered in its research reports” and that it was possible the firm may have a “conflict of interest that could affect the objectivity of the report.”

Gallo said Wells Fargo did the statistical analysis for two reasons.

“One was, would a carrier be losing business because of bad threshold scores?” Gallo said. “And the other issue was one of safety. If they’re not safe, ultimately that’s going to show up in their earnings — either higher insurance or greater claims.”

Gallo said he did not agree with all of FMCSA’s comments in the review.

“Their rebuttal certainly got us thinking,” he said. “But it didn’t change our primary concern that the CSA BASICs score does not tell us all that we need to know about carrier safety.”