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Protecting the family jewel

Back in the days of economic regulation in Ontario, the family jewel in the trucking industry was your operating licence. That was the ticket so to speak. In the post-deregulation days, it moved to in...

Back in the days of economic regulation in Ontario, the family jewel in the trucking industry was your operating licence. That was the ticket so to speak. In the post-deregulation days, it moved to insurance because insurers were reluctant to take on a whole new group of operators. Today I would suggest it’s having a Commercial Vehicle Operator Registration that is satisfactory not only in the eyes of the Ministry of Transportation but to your insurer and your clients.

There are a few things of late that I have noticed. First, some insurance companies are now starting from the position that they will not re-insure a carrier with something less than a satisfactory safety rating. In a very tight insurance market made worse by September 11, some players in the insurance market are looking for ways to get out of the trucking market and this is one of them.

Second, there is a growing trend for shippers, particularly some of the bigger players, to scrutinize the CVOR records of their carriers. While their analysis is not always the greatest, a conditional and certainly an unsatisfactory rating serves as a flag. And in one instance I am aware of, the carrier was quite literally placed on probation.

Third, the Ministry of Transportation itself conducts interviews and show-cause hearings on a daily basis. Hit the magic sanction thresholds and you will be targeted for an interview or the next stage, a hearing to explain why you should not have your operating privileges suspended or revoked. Trust me, it ain’t like it used to be. Suspensions are not uncommon and in many instances sound the death knell of a business.

The key to keeping the rubber rolling is taking preventative measures up front and never having to face the prospect of having a portion of your fleet shut down for 15 days or so. Carriers who regularly access their CVOR and take the measures necessary to quickly respond to any negative trend will not be in this situation.

So, Rule Number One: Access your CVOR regularly. If your overall violation rate is less than 34%, MTO will not be in contact with you. But if you’re getting close to that number, say about 25%, I’d strongly suggest that you obtain the record monthly and take those steps to ensure the numbers don’t move any higher.

But let’s move to the situation where you are contacted, and are required to attend either an interview or the show cause hearing. First, unless you fully understand the system and know what the Ministry wants to hear, get some proper advice. The reason I emphasize this is because I am aware of two situations recently where the advice received at the interview stage was pathetic. In one case the client was advised that MTO would not expect the owner of the company to attend the interview. And in another instance the action plan for improved compliance was merely that the carrier would improve to an acceptable level, as CVOR points would drop off over the next 6-month period. No consideration was given to the fact that during the same period points would be added.

Always ensure that the owner or senior management of the company attend. The Ministry, and rightfully so, wants to be clearly satisfied that the concern for safety and compliance is a key priority at the top of the food chain.

It is also critical that an effective and achievable action plan is presented. The action plan must address any specific problem areas that have been identified by the Ministry in any correspondence that has been sent to the carrier prior to the meeting. One other thing: If you have been audited in the past, or if there has been any specific intervention associated with a safety, compliance or record issue, make sure you are able to speak to it, and identify how that problem was addressed. For example, if an audit revealed there was a problem associated with vehicle maintenance records, explain exactly what steps you took to fix the problem.

While I have seen some action plans that in fact would be better described as inaction, I have seen others that are equally meaningless either because the goals and initiatives are unachievable or, they have not been implemented. I would emphasize that any undertaking an operator makes to the Ministry must be implemented as stated. And if it must be amended in terms of how or when, that the Ministry be contacted and advised of any changes. Also, after any meeting there may be other initiatives that you take. If so advise them of these as well.

There are a couple of things to avoid during an interview or hearing. First, don’t be defensive in the sense that it sounds like you are explaining away problem areas. Second, avoid blaming drivers, even though their actions or inactions are often the source of many CVOR problems. The key involving any discussion about driver issues is how you have dealt with or intend to modify their behavior through disciplinary action, perhaps combined with cash or other incentives, training and re-training etc.

With any of the problems or issues that are raised, some actions you take obviously will be reactive. But the key notion to impart to the Ministry is how your approach is now going to be one of prevention.

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