New Business Model for Unsafe Trucking Companies
As described in an April 2011 Milwaukee Journal Sentinel article, the trucking industry has seen the development of a new business model. This new business model involves flagrant regulatory abuses resulting in a poor governmental safety rating, which then gives way to bankruptcy and restructuring under a new name with a clean slate.
The article describes the path taken by Franklin's JDC Logistics Inc. In the mid-2000's JDC was continually driving over hours and had a poor safety rating. The Federal Motor Carrier Safety Administration tracks the safety rating of trucking companies. One of the seven measures the FMCSA uses is driving over-hours or "fatigued driving." Another measure is "unsafe driving." JDC ranked low in both of these categories, which led the FMCSA to issue some of the heaviest fines in the country to JDC. The company eventually was forced into bankruptcy. However, the company would surface again under a new name, JTL Carriers LLC.
After bankruptcy and restructuring, JTL was essentially able to start from scratch with the FMCSA's safety rating, but it didn't take JTL long to once again earn rankings as one of the worst trucking companies in the nation. Not surprisingly, two of JTL's poorest rankings, are driver fatigue and unsafe driving. The FMCSA recently audited JTL's records and is in the process of downgrading the safety rating of JTL from "satisfactory" to "conditional." This will have a major impact on business for JTL, because shippers can be held legally responsible for negligently choosing an unsafe trucking company to haul their products if there is a trucking crash.
The comments in the online version of the Journal Sentinel article tells the whole story, as one former JDC driver describes how, he was often pressured by dispatchers and even JDC's owner to drive over hours. Another comment describes how the company used to maintain computer log books and it was not uncommon for dispatchers to go into the computer system and tamper with the logbooks to put drivers "under" the maximum driving hours.
If the FMCSA is successful in downgrading JTL to "conditional" it seems likely the JTL will be forced out of business again. The problem is obviously that they will likely rise again under a new name with the same unsafe practices. The FMCSA and federal legislators need to take action to prevent the gaming of the system by the worst of the worst trucking companies.
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