Indiana Motor Transport Association September 8, 2009 Indianapolis, IN

1. Comprehensive Safety Analysis (CSA) 2010 Indiana Motor Transport Association September 8, 2009 Indianapolis, IN

2. Vertical Alliance Group and infinit-i Intelligence Systems • Vertical Alliance Group • 10 years of experience helping over 1000 trucking companies attract higher trained employees and companies improve OR and increase revenue. • Websites attract nearly 1 million unique visitors per month • www.bubbajunk.com , www.truckertrucker.com and www.infinit-i.net • infinit-i Intelligence Systems • Enterprise-wide, web-based platform addressing the needs of all company employees • Cost effective, quick to implement • Provides the ability to track user participation and comprehension.

3. What is • A Federal Motor Carrier Safety Administration initiative designed to develop more effective and efficient methods, with industry and state partners, to achieve it mission of reducing commercial motor vehicle (CMV) crashes, fatalities and injuries. • Key attributes • Flexibility – Adapt to changing environments • Efficiency – Maximize use of resources • Effectiveness – Improve safety performance • Innovation – Leverage data and technology • Equitability – Be fair and unbiased

4. New FMCSA Operational Model (Op-Model)

5. Implementation Timeline

6. 15 Deadly Sins • Failure of any of these “deadly sins” will result in the fleet failing the audit. • Notification of failure within 45 days of audit and 60 days to correct • Passenger carriers and hazmat haulers are only given 45 days to correct • “Deadly Sins” are: • Failing to implement an alcohol and/or controlled substances testing program • Using a driver who has refused to submit to an alcohol or controlled substances test required under Part 382. • Using a driver known to have tested positive for a controlled substance. • Failing to implement a random controlled substances and/or alcohol testing program. • Knowingly using a driver who does not possess a valid CDL. • Knowingly allowing, requiring, permitting, or authorizing an employee with a commercial driver’s license which is suspended, revoked, or canceled by a state or who is disqualified to operate a commercial motor vehicle. • Knowingly allowing, requiring, permitting, or authorizing a driver to drive who is disqualified to drive a commercial motor vehicle. • Operating a motor vehicle without having in effect the required minimum levels of financial responsibility coverage. • Operating a passenger carrying vehicle without having in effect the required minimum levels of financial responsibility coverage. • Knowingly using a disqualified driver. • Knowingly using a physically unqualified driver. • Failing to require a driver to make a record of duty status. • Requiring or permitting the operation of a commercial motor vehicle declared "out-of-service" before repairs are made. • Failing to correct out-of-service defects listed by driver in a driver vehicle inspection report before the vehicle is operated again. • Using a commercial motor vehicle not periodically inspected.

7. What will mean for your company? FINES? CORRECTIVE ACTION PLANS? HAVING TO CEASE OPERATIONS DUE TO UNFIT STATUS? Let’s understand the ingredients of

8. SafeStat vs. SMS Today’s Measurement System: SafeStat CSA 2010 SMS (Safety Management System) Organized by seven specific Behavior Analysis Safety Improvement Categories (BASICs) Identifies safety problems to determine who to investigate and where to focus the investigation Emphasizes on-road safety performance, using all safety-based road-side inspection violations Used to propose adverse safety fitness determination based on carriers’ current on-road safety performance (future) Violations are weighted based on relationship to crash risk Two distinct safety measurement systems-one for individual carriers and one for individual commercial motor vehicle (CMV) drivers Organized by four broad categories - Safety Evaluation Areas (SEAs): Accident, Driver, Vehicle, and Safety Management Identifies carrier for a compliance review (CR) From roadside inspections, uses only out-of service (OOS) and moving violations No impact on safety rating Violations are not weighted based on relationship to crash risk Assesses carriers only

9. Safety Events Safety Event Data Attributed to Entity • Carrier Safety Measurement System (CSMS) includes 24 months of carrier on road safety performance • ~6.6 Million inspections • ~290 K crashes • ~690 K carriers • Driver Safety Measurement System (DSMS) includes 36 months of driver on road performance • ~9.6 Million inspection records • ~440 K crash records • ~3.6 Million drivers Safety Events Basic Data Basic Measures Rank/ Percentile

10. BASIC Data Safety Event Data Sorted by 7 BASIC • Unsafe Driving (Parts 392 & 397) • Fatigued Driving (HOS) (Parts 392 & 395) • Driver Fitness (Parts 383 & 391) • Controlled Substances /Alcohol (Part 392) • Vehicle Maintenance (Parts 393 & 396) • Improper Loading/Cargo Securement (Parts 392, 393, 397 & HM) • Crash Indicator Safety Events Basic Data Basic Measures Rank/ Percentile

11. BASIC Measures Convert BASIC Data into Quantifiable Measure Considerations • Time Weighting / Time Frame - More recent events more relevant • Severity Weightings - Increase weighting of violations that have been shown to create a greater risk of crash involvement • Normalizing - Based on exposure: use of number of inspections and power units • Single Inspection Cap – limit violation weight of single poor inspection Safety Events Basic Data Basic Measures Rank/ Percentile

12. Rank/Percentile Based on each BASIC measure, develop rank and percentile indicating entity's BASIC performance • Provides a relative assessment of performance • Allows for prioritizing intervention resources by behavior • Considerations: • Peer Grouping - compare measures of entities with similar levels of exposure • Data Sufficiency standards – define events/exposure necessary to generate a robust measure • SFD/Intervention standards – define “critical mass” of poor performance necessary for inclusion of entity in intervention process or detrimental SFD • Recency of Inspection Data – assignment of percentile dependent on age and result of most recent inspection (12 months) Safety Events Basic Data Basic Measures Rank/ Percentile

13. Unsafe Driving Measure • Operation of CMVs in a dangerous or careless manner. • Examples: speeding, reckless driving, improper lane change • Considerations: • Time weight: 0-12 Months (x2), 13-24 Months (x1) • Violation Severity Weight based on crash risk: Range from 1-10, where 10 is the most severe • Normalized by Average Power Units Sum of Time and Severity Weighted Violations Average Number of Power Units (PU) Basic Measure =

14. Driver Safety Measurement System (DSMS) • Uses the 7 BASICs but are segmented differently • Unsafe Driving BASIC and Controlled Substances and Alcohol BASIC • Fatigued Driving BASIC and Driver Fitness BASIC • Vehicle Maintenance BASIC and Improper Loading/Cargo Securement BASIC • Crash Indicator • Severity of violation is the same as carrier • Time is based on 3 years • 3x for 0 – 12 months • 2x for 13 to 24 months • 1x for 25 to 36 months • Unsafe Driving and Controlled Substances values are converted to percentages and ranked against all drivers having at least one violation • The other three segments are grouped based on number of violations or severity of crash. Driver rating will stay with the driver if they change to a new fleet or become an Owner/Operator

15. Pilot Program Operational Model Field Test Design: • Completed January 2008 Operational Model Field Test: • Began February 2008 • Planned completion June 2010 • Designed to test validity, efficiency and effectiveness of new model • Evaluation to be conducted by independent 3rd party • Test states include: Colorado, Georgia, Minnesota, Missouri, Montana, New Jersey

16. CSA 2010 Test Findings So far, CSA 2010 is: • Reaching its goal of contacting more carriers • One objective of CSA 2010 was to conduct more investigations per FTE, per month • This goal is being met or exceeded by test state SIs • Resulting in strong enforcement; similar to current model • Employing the full array of investigations to achieve efficiency and effectiveness • Investigations in test states have been done in the following proportions • Onsite Investigations – Comprehensive (~25%) • Onsite Investigations – Focused (~45%) • Offsite Investigations (~30%)

17. Test Fleet Comments Mike Clay – Director of Training – Kennesaw Transport We have had on intervention based on a component being too high on our trailer found during an roadside inspection. We were instructed to fix the issue and we did. We notified FMCSA and we have not had any problems since then. Jay Thomas – Packard Transport We are a 100% owner/operator company. Our message to them has changed regarding CSA 2010. We got their attention by sharing with them that they are responsible for their own individual safety ratings going forward. Their safety rating will have consequences that could affect their ability to work or get a job, really got their attention. We also shared with our management team that a change was made to Article 444 pertaining to having a moral and legal obligation to PREVENT violations. Therefore, if you come in contact with a driver, you are deemed to have influence and can be held accountable, individually, to prevent violations.

18. Test Fleet Comments Safety Director – Fleet involve in the CSA 2010 Program (anonymous) Under the SafeStat program we had an excellent safety rating. Since the CSA 2010 program stated, we had a reportable accident that put our drivers in the Targeted Roadside Inspection category. During another inspection, we violated another BASIC and we were upgraded to a On-Site Investigation. This has cost us thousands of dollars in preparing for this On-site investigation which is in its second week. We terminated both drivers but that did not have an impact on the intervention because our ISS-D rating is still deficient. Once you are in this category, this is “NOT a friendly environment for carriers”. We also found that a different weighing system was being used then published. Violations were multiplied by 3x during the 0 – 6 month period and 2x for 7 – 12 month period for the Carrier instead of 2x for 0 – 12 months. This means that carriers will be paying more fines then in the past.

19. How will influence the lawyers? Steve Gursten – Partner – Michigan Auto Law When an accident occurs, lawyers will be looking for violations of Driver Fitness, Unsafe Driving and Driver Fatigue. Continual HOS violations, sleep apnea and moving violations such as speeding and tailgating will be areas that lawyers will look for when representing crash victims. Effective driver safety training with third party documentation will have a major impact in the courtroom in mitigating punitive damages. Crash victim’s lawyers will pursue evidence of driver violations in Driver Fitness, Unsafe Driving and Driver Fatigue but fleet’s liability can be diminished based on documented effective driver training.

20. National Implementation Elements and Timeline Summer 2010 • Replace SafeStat with SMS • Inspect carriers with deficient BASICs on the roadside July through December 2010 • Roll out interventions tool box • Send warning letters nationwide State of Indiana FMCSA Office will begin training Safety Inspectors in July, 2010. Expect early roll-out for Indiana fleets.

21. FMCSA Safety Management Cycle

22. How to get ready for CSA 2010 • Create and implement a CSA 2010 training program for your drivers and for your management team • This applies not only to your drivers but to your maintenance team, dispatch, operations and your leadership team. • Make sure that your drivers know that their livelihood depends on a good driver rating • Train, observe, and retrain • Remember – 66% of all roadside inspections are triggered by observable defects and speeding. • Factors for a good training program • Available 24/7 • Easy to deploy and access • Reporting system that allows for evaluation of compliance • 3rd party record of training completion with time and date stamp is advantageous

23. Effective Training Methodologies A recent study by Deloitte LLP on “Effective Training Methods” describes the following: • Training content, i.e.., videos, power points, etc., should be kept under 5 minutes. An individual forgets more than 50% between 5 and 10 minutes and nearly 75% over 10 minutes. • Testing after training is crucial and shows more than 50% increase in knowledge when testing is used. • Training should be consistent from instructor to instructor • On-going training is more effective than attempting to absorb total training at one time. • Make it convenient to the individual. • infinit-i utilizes all of the above training methods.

24. infinit-i can help your company meet the requirements of CSA 2010 by: • Track your driver’s safety training anytime…anywhere. • Extensive library of training and safety videos targeted for seven BASIC categories – Behavioral Analysis Safety Improvement Categories • Complete tracking, testing and reporting ability • 3rd party verification and recording of training and test results. Date and time stamped. • Safety training and documentation to avoid “15 deadly sins” that can result in failure of motor carrier audit. • Reduce chance of motor carrier intervention by improved safety performance

25. CSA 2010 Information Sites • www.csa2010.com • www.fmcsa.dot.gov • http://csa2010.fmcsa.dot.gov/Yourrole/motorcarriers.aspx CSA 2010 is Happening Now Your rating is being developed for your fleet and your drivers. Become Informed – Train – Produce Results

26. Background Slides

27. Commercial Motor Vehicle Fatalities Rate of Commercial Motor Vehicle Fatalities is Leveling Off

28. Elements of • Measurement system utilizing the 7 BASICs (Basic Analysis Safety Improvement Categories) • Data scored and weighted based on relationship to crash causation • Intervention • Warning • Targeted roadside inspection • Off-site investigation • On-site investigation • Comprehensive notification of claim/settlement agreement • Safety evaluation (every 30 days for driver and fleet) • Continue to operate • Marginal (ongoing intervention) • Unfit • COMPASS • Computer system designed to help state and federal enforcement make better decisions, identify at-risk fleets and driver more effectively and provide a wider range of interventions to correct high-risk behavior earlier

29. 7 BASICs • Driver Fitness • Unsafe Driving • Fatigued Driving • Controlled Substances/Alcohol • Crash Indicator • Vehicle Maintenance • Improper Loading/Cargo Securement Safety Measurement System (SMS) will score a driver and fleet on each BASIC to determine whether the driver and/or fleet should continue to operate.

30. c Driver Safety Measurement System (DSMS) DSMS quantifies commercial motor vehicle (CMV) driver performance in terms of BASICs, using available roadside performance data During the Operational Model Test: • SIs examine drivers who have been cited for severe driver violations, in conjunction with carrier interventions • May result in driver Notice of Violation or Notice of Claim based on driver violation history across current and previous employers Beyond the Operational Model Test: • DSMS will be used to identify the “worst of the worst” drivers so that interventions may be done directly with drivers, independent of carrier interventions

31. Commonly Asked Question About Driver Data • When Will Carriers Have Access to Driver Data for Employment Decisions? • FMSCA’s Driver Information Resource (DIR) attributes roadside inspection and crash data to individual CMV drivers • “Driver Profiles” from DIR that contain inspection and crash histories for individual drivers will be made available through FMCSA’s Commercial Driver Pre-employment Screening Program (PSP) later in 2009; drivers would authorize release of profiles • FMCSA is negotiating with 3rd party vendors to provide access to PSP data for carriers and drivers

32. Carrier Measurement: SafeStat Results

33. Carrier Measurement: SMS Results

34. Violation Details Provided in SMS

35. Further Drilldown in SMS

36. Driver Measurement: By Basic

37. Driver History: Current and Previous Carriers

38. Driver History: Unsafe Driver Measure and Violations

39. Driver History: Inspections with Unsafe Driver Violations Across Several Companies

40. New Intervention Tools • New intervention tools reach more carriers and influence safety compliance earlier • Warning Letters • Investigations • Offsite Investigations • Onsite Investigations - Focused • Onsite Investigations – Comprehensive • Follow-on corrective actions • Cooperative Safety Plan (CSP) • Notice of Violation (NOV) • Notice of Claim (NOC) • Operations Out-of-Service Order (OOS)