Episode 24 - Part 2. DOT Compliance and Trucking Consultant Kenneth Nolley
In part two of this episode featuring DOT Compliance and Trucking Consultant Kenneth Nolley, he and Michael dive deeper into his expertise and work with P1 Compliance.
Questions that are answered in this episode:
"What are some things you are looking for when you're speaking to a prospective client or motor carrier?"
"How can companies build their culture to be more preventative than reactive?"
"How can drivers improve their daily safety routines?"
"Driver managers are busy. What can they be doing to ensure drivers practice these routines over the road?"
"How important is it for executive leadership to be promoting a safe culture in the business?"
"Do you think ELDs make trucking safer?"
"How can trucking companies keep insurance costs down?"
"Where do you see technology going now and how will it effect compliance and safety in the future?"
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Kenneth Nolley:
Over several years, but if you have a bad culture or that safety culture or one that really just doesn't care, it's going to translate into ultimately higher premiums.
Michael Clements:
Welcome to trucking for millennials where we engage with the future of freight happening. Now my name is Michael Clements.
Aaron Dunn:
And I'm Aaron Dunn, and we're here to help trucking and logistics professionals stay up to date and ahead of the curve, as our industry evolve.
Michael Clements:
We're connecting with every step of the supply chain as part of our mission to increase transparency and provide world-class freight solutions.
Michael Clements:
So moving on to the compliance side, you were in operations. What do you think though ... What was one of the greatest things you think you took from being in on the old field side of things? What do you think that that taught you most about compliance and how did that add to your knowledge of being a DOT officer?
Kenneth Nolley:
Well, from the DOT inspector side of things, whenever you look at the truck, you're pointing out a lot of things that are wrong with it. You're not necessarily pointing out all the good. Whenever you've pointed out all the wrong things and you've written your report and either place the driver out of service or send him down the road with a handful of violations. Typically that's the last that you hear of it.
Kenneth Nolley:
Being on the motor carrier side where you're the carrier official. If a driver returns and hands you one of these inspection reports that he's been stopped and has all these violations on it, well now you got some work to do. You've got to investigate and figure out, okay, what went wrong? What part of our process was not followed? Did a driver do his pre-trip inspection? Is it something that the drivers should have caught during this pre trip inspection? How do we fix it and how do we keep it from reoccurring?
Kenneth Nolley:
Those are big challenges. It's a whole lot easier just to pick it apart and say, "Hey, you're doing this wrong, this wrong, this wrong, this wrong, here's your report, see you later". Versus having to get all that stuff corrected and figured out and how do you safeguard against that in the future?
Michael Clements:
Mm-hmm (affirmative). So you're with compliance one priority compliance one. If you're going into interview a possible client or prospect, what are some things ... What are some questions maybe your things you're looking for that that company's already doing to assess their current safety or how important compliance is to them?
Kenneth Nolley:
Well, I can tell you a lot of the motor carriers that we work with are the new motor carriers who have gotten their new entrant letter and have found us on the internet or word of mouth. So they're in dire need. They've gotten a letter that they're fixing to be audited. More often than not, it's the new entrance audit, which is really not that big of a deal, but whenever you're on the motor carrier side and you get any type of audit, it tends to raise your blood pressure a little bit and put a lot of undue stress on you.
Kenneth Nolley:
Just because even if you've done everything that you're supposed to do, it's the chance that, "Hey, something could be found here and could cost me money. Something could be found here. It could put me out of business if something I wasn't aware of". So, it does ... that create a little bit of stress. So whenever we go in and we start talking with motor carriers and a lot of times these are owner operators and figuring out what they have in place. Often we find that they don't have anything or hopefully some of these guys have at least they heard that you're supposed to get a drug and alcohol screen and they've at least got that.
Kenneth Nolley:
That's one of the first areas that we try to get corrected if it's not ... if it is in need of correction, is get the drug and alcohol stuff sorted out, because that is one of the areas that is going to be an automatic failure. If you don't have a proof of being enrolled in a DOT drug and alcohol program at the prescribed rates and you don't have the records to reflect that, then that can be an automatic failure and you can lose your operating authority and be placed out of service just on that alone.
Kenneth Nolley:
The purpose of the new entrant audit, just to make sure the motor carrier has in place the basic safety procedures to make sure ... to ensure safety that they're doing what they're supposed to be doing. Driver qualification files, making sure that they understand the paperwork that goes into each driver qualification vol and that they're doing their required checks, whether it be through the previous background, now through the motor carrier, through the drug and alcohol clearing house, a driving record, making sure that they have that.
Kenneth Nolley:
And, a lot of this stuff, making sure that they have some sort of competence as far as a maintenance program, making sure that they have something in place, not just, okay, well whenever I get stopped and get inspected and they tell me that I have a bad tire, that's not the time to be replacing it. You want to try to be proactive and have stuff on a schedule where you are every 5, 000 every 10, 000 miles that you're doing certain checks at different intervals to make sure that tried to take a proactive approach, preventative maintenance. So that you can keep the truck going and keep everybody else safe as well.
Michael Clements:
So how ... You bring up a great word and that's preventative. How can companies really build their culture to be more preventative versus reactive?
Kenneth Nolley:
Very good. One, we're evaluating your schedules of what type of maintenance is being performed at each different interval. Generally a motor carrier understands they've got a lot of money going out and it's spent on parts. It's spent on recur tow bills, it's spent on roadside service calls. If you can evaluate that and figure out where your money's going, if you can try to figure out how to minimize the roadside calls, is it your drivers in investing in good, thorough pre-trip training to make sure that your drivers are doing what they're supposed to be doing.
Kenneth Nolley:
They group, a lot of times your first line of defense. They can tell their ... especially if they're assigned a particular unit, they know when the truck is not driving right.
Michael Clements:
Mm-hmm (affirmative).
Kenneth Nolley:
They know whenever they hear a sound. They just understand that, "Okay, this truck's not operating the way that it was yesterday or something's just not right". They are your first line of defense. And I think if you invest in them and have good drivers that they will help you maintain your maintenance cost and can be a good alert system whenever something occurs outside the normal wear and tear interval, in which you're checking on it.
Kenneth Nolley:
They can be the ones that prevents you from getting the roadside inspections and then having some issues violations discovered during the roadside inspections just by doing a good thorough pre-trip inspection.
Michael Clements:
Mm-hmm (affirmative).
Kenneth Nolley:
And ultimately it leads to less roadside mechanic calls and having stuff done. It's a lot cheaper, do stuff on the yard or at the truck stop versus having to be towed in somewhere or having the roadside mechanic come out to you.
Michael Clements:
So how can drivers improve their ... just their daily safety routines? How can they do that?
Kenneth Nolley:
I'm going to go back to pre-trip inspections. There's numerous resources out there and I know that oftentimes, we study and study and study to pass the pre-trip assessment whenever we get our driver's licenses. It doesn't need to stop there. They need to continually try to be proactive looking at stuff a lot more in depth. Don't just get relaxed just because you've passed the test and you've got your driver's license now everything is good.
Kenneth Nolley:
Try to be proactive, come up with a systematic way that you inspect the vehicle every time. I have my way that whenever I do a pre trip inspection, I inspect it the same way every time. And I stick to that. That was one thing I really enjoy to dealing with new drivers coming on board to our company is being able to evaluate that process.
Kenneth Nolley:
And I cannot believe that a lot of them, they really ... they didn't have anything ... they didn't even understand that they're cranked the truck up and I'll turn on the lights and I'll walk around it and everything's good. Well, I tend to show them my method, not that my method is 100% correct. If the right way I tell them that, "Hey, as long as you're checking all these components, checking things, you come up with a system that fits you".
Kenneth Nolley:
It does not have to be the way that I do it, but I encourage each and every person come up with a systematic way to inspect this stuff each and every time and don't deviate from it. Do it the same way every time. And I think you're less likely to have an issue there. Some companies actually ... and we see it now in the ELD systems, they are building software and things in there that drivers can use as a trip inspection as well. If they see it written down, it can prompt them to, "Oh yeah, I need to go check that".
Kenneth Nolley:
And it can kind of be a good adviser or reminder to check certain components and make sure, because they know how to do it. It's just a matter of going and doing it, not be lazy whenever it's raining outside or it's colder than normal. Being able to just put your coat on, go get it done because your safety as well as other people's, it depends on you.
Michael Clements:
Usually, driver managers they're tied up, they're busy, those are busy folks just like the guys in the trucks but or guys or girls. But those driver managers, what can they be doing on their end to also ensure that their drivers are practicing these routines daily or go going through the ... not just going through the motions but maintaining that consistency in pre-trip, post-trip, how they drive the truck, what they're doing, staying off their phone. Little things like that. How can driver managers be influenced in those decisions drivers are making over the road?
Kenneth Nolley:
Very good and I'm glad that you brought that up because oftentimes we create the rules and it just sits there in the rule book. It's pushed out to the drivers they're supposed to be doing that, but no one has come back and really evaluated to see if they are doing that. There was not an issue until they get an inspection and now it's brought up. I have worked for CEO one time and his motto was inspect what you expect. If you're not proactively going out there and checking some of the stuff, it can just be spot checking it behind these drivers just to see.
Kenneth Nolley:
Maybe it is okay, the trucks. In our case we had whenever our frack fleet went out, it was not just one truck here, one truck there. They were all leaving out generally at the same time. Could you be there in the mornings and see the trucks and stop and visit and just spot inspect them? Just basic stuff. Walk around the truck won't take just a moment. Get you another manager, look for violations. These guys, by the time they get up to the gate, their truck really and truly it should be ready to go.
Kenneth Nolley:
There are certain companies that actually do have their guards. They check this stuff. They do inspections on these units each and every time to make sure that everything's in good condition because they understand once that truck leaves, if it gets stopped and gets inspected, it gets placed out of service. If something's found to be defective on the side of the road that could have been called it the yard, it's going to cost a lot more money to get it done. It delays the truck from getting where it needs to be. Lots of different things that are impacted whenever a truck does not make it to its destination on time for whatever reason.
Kenneth Nolley:
So inspecting what you expect, doing spot inspections, looking at it really and truly, making sure that it is part of the safety meeting. It's not just something that we take for granted and just assume that everyone's doing, it's going back and making sure. And I think from a driver's standpoint, if they understand that you're going to be going behind them and checking it well, I think it would prod them to go ahead and do it anyway because they know that, "Hey, someone else is going to catch it. If I don't, I'm going to go out there and do it".
Kenneth Nolley:
We have a lot of good drivers out there that do a really good job at doing pre-trip inspections. So don't misunderstand me. There are people that do a phenomenal job on what they're supposed to be doing. I think some of the other ones is not that they're bad drivers. I think they just get a little relaxed sometimes and unfortunately whenever we get relaxed or complacent, that's whenever stuff starts to happen.
Michael Clements:
So you're not ... Being on the truck and then ... I mean there is some irritation. There are some times whenever you get a ding or you get a ticket. But how important is it for the CEO, president, the executive level people to be promoting a safe culture in the business? And have you been able to see a correlation between the companies that are doing it well and the companies that aren't in their leadership positions?
Kenneth Nolley:
Really and truly, let's look at 2019 I think we had a record number of motor carriers that went out of business. Insurance costs being a one of the factors and many of them going out of business and what a lot of people do not understand is those roadside inspections. You get enough of those that are negative. It impacts that insurance rating. It's not going to be something that you feel immediately. It may be over several years, but if you have a bad culture or that safety culture or one that really just doesn't care, it's going to translate into ultimately higher premiums being paid.
Kenneth Nolley:
And if your company goes out of business, then you're, that's not good. So trying to be proactive on the front end to avoid those things and correct and things and saying, "Hey, our company's not going to tolerate this, you got this inspection. It had all of these violations". Holding drivers accountable, making sure that they are doing what they're supposed to be doing. And it's huge, it is very, very imperative. I think if you look at on SAFER right now, you can see motor carriers that have a satisfactory safety rating.
Kenneth Nolley:
Some motor carriers have a conditional safety rating, some motor carriers placed out of service. And unfortunately, it's not going to be a quick fix. Whenever you get a conditional rating, whenever you get some poor inspections and maybe you just went through ... He had a manager who was not doing what they're supposed to be doing and you got rid of them and replace them, it often takes a lot of time to recover, from poor inspections or conditional safety rating. It's not just going to be an instant.
Kenneth Nolley:
It's easy to get in that condition sometimes, but it's a whole lot harder to pull yourself back up to be where you need to be. It can ... If you get a conditional safety rating, poor inspections, guess what? If you're a for hire motor carrier, there's some brokers that will not dispatch loads to you, because they have their agreements with the shippers that they're going to get this load where it needs to go. That is essentially your profile. That is your reputation that brokers often are going and looking at through carrier 411, looking through a FMCSA SAFER, looking to see what type of inspections does your company have, what type of violations are you being cited for?
Kenneth Nolley:
Because ultimately they want to maintain good relationships with their shippers and maintain a good status as a broker by using qualified motor carriers to move their loads.
Michael Clements:
Mm-hmm (affirmative). So how important do you think ELDs had been to the industry and do you think they're making trucking safer?
Kenneth Nolley:
Well, ELD used to almost translate to a cuss word for a lot of people, and I think it's a probably a lot broader than just ELD. I think, let's throw technology in there, and not the ELD being a major technology shift that we've seen recently that's been mandated. I've talked with a lot of drivers, I've talked with motor carriers and they throw their hands up, on the over the ELD situation, it being mandated. I've heard lots of different stories from different people. Well now, I can't make no loads. And I tend to point out to those same people.
Kenneth Nolley:
It's well, the hours of service didn't change. Our service is still the same. So if you're not able to do the same thing that you were doing, then really and truly, you just told me that you have not been doing what you're supposed to be doing. And I know a lot of carriers have been able to get by with that stuff. There's some motor carriers that turn a blind eye to it and just simply say, "Oh, the driver said that he had hours". And that's not a good management. They need to have a good oversight on that as well.
Kenneth Nolley:
A lot of people, have a bad taste in their mouth and don't think the federal government should be telling them how many hours they should be able to operate, and I understand, it's irritating. But on the other end of the spectrum too, I can be irritated, but a lot of things, I don't necessarily agree with a lot of things, but there's some stuff that I know that I can't win. I just got to figure out the best way to apply it and going about the business.
Kenneth Nolley:
ELDs I think they're great, and I can tell you this, it's not just from the hours of service feature, which is why they're pushed out, but the availability of data, that it provides to the motor carrier such as people RP, a portion license plates and [IFDA 00:17:51] well guess what? I'm from the generation before the ELDs were mandated where we were having to go through and record manually all the trip reports, for IFDA keeping track of all the roads that we drove on the mileage per state and all that stuff and having to compile those reports and put them on spreadsheets.
Kenneth Nolley:
So not if but when you get audited you could at least show, all of your stuff, all your documentation of all the of the miles that were counted for. During those processes lots of gap mileage is where you have a driver that, he pulled back into the yard and recorded a mileage only ending odometer. You may have a few hundred miles to a thousand mile gap between that trip record and the next trip record. So then you have to deal with another problem, and just like the inspections, it's not something that you see the results right then where you're going to be penalized.
Kenneth Nolley:
But whenever you do get audited and they come in and start looking through your records, that's whenever it becomes a problem. So the availability of data that the ELD systems that has put in place to be able to track all of that. Even if the ELD was not required, I would highly recommend a telematics system that still provides that capability so that they could do that, as well as all the other data that it generates from the trips and stuff. I think it's wonderful.
Kenneth Nolley:
As far as the ELDs, there's a lot of people that have jumped on the bandwagon. Whenever it became mandated, lots of people jumped in into the technology world and said, "Oh, I think we can do this". There's a lot of good systems out there. I've also spoken with some people, some different ELD providers that they've used it. It really has not panned out to be what they thought. We've had problems during audits with some of the information being exported to the auditor and it's been a problem.
Kenneth Nolley:
If you pull up into a point of entry at another state way station and they want to review your data and you're not able to pull it right then, and it's worked all the way up until the end, you're going to have a problem. And they're going to write you up for it. So technology, it can be very good, I'm not anti technology. From an insurance standpoint, from an underwriting standpoint. I've seen it on insurance and I think it's where insurance is probably going to move into. Right now, it's hard, in the trucking insurance market.
Kenneth Nolley:
In general, there's a lot of motor care, a lot of insurance carriers that have jumped out of the insurance running business. Some carriers have stepped back, said, "Well we will look at it if they have three or four years of business. That way we can evaluate the history and see". So you just kind of have a narrow market of new venture guys. But I think that the days come in and I've seen some insurance carriers come back say, "Okay, well you know what, we'll give you a decent rate for trucking insurance, but we're going to require that you employ some other technology", whether it be forward facing cameras that that seems to be kind of the next biggest thing.
Kenneth Nolley:
It's not mandated by FMCSA, but insurance ... from an insurance standpoint, they're having to defend a lot of these claims. And that is one way that they have, that's a tool in their tool box that they can use to help defend against some of the claims that they have is, real live actual video. So it's a partnership between the insurance carrier and the motor carrier.
Kenneth Nolley:
Motor carrier wants to be able to operate. We understand that we need trucks, we cannot do without trucks. We have to have them. But being able to hopefully provide insurance pricing that the motor carrier can't afford, and also maybe putting some extra stipulations on there to help defend against any type of claim should one arise.
Michael Clements:
So how can companies keep their costs down with insurance? Because it seems every single year since we've been in business process have went up and really in the last three process have really went up. So, what can we be doing on our end? Whether that's ... I mean I've heard it's everything from what you mark on the FMCSA side and you're buying annual report. It's how many drivers you have versus how many trucks are on your deal, how many trailers you have versus how many trucks are insured.
Michael Clements:
All these things play into it. So what, how can a small company keep their costs down?
Kenneth Nolley:
Very good. And I wish there was a one size that fits all answer. The stuff that you mentioned, right there is stuff that is taken into consideration. Believe it or not, there are some carriers that seem to dim companies that may have more drivers than trucks or they may have more trucks than drivers. And they're just kind of rating to try to protect themselves in case someone is placed into a truck. Numerous things, I go back to compliance.
Kenneth Nolley:
That being a big thing, people really and truly, and I alluded to this early on, the correlation between your roadside inspections, your compliance record, they look at that stuff annually every year to see what kind of violations are you getting, where are you operating? Sometimes that can be a factor. What's you're transporting is another factor, so try your best to keep a clean inspection record or at least have those be good inspections that will lead to opening up different motor care, different insurance carriers that you are available to.
Kenneth Nolley:
Some carrier, insurance carriers, underwriters will look at the risk, write off. They'll just go straight to SAFER. They use a program called CAB stands for Central Analysis Bureau that pulls the information from SAFER, puts it in a good format for them and they're going to look at that and they're going to scrutinize it. And if you've got a lot of violations or you're out of service percentage is higher than what they feel it should be. A lot of them won't even waste any more time on it. They'll just say, "No, we're not going to go maybe next year. Come back to the market then".
Kenneth Nolley:
Claims making sure that, I'm going to go back to pre-trip inspections, one for the compliance, two making sure, I think if you're doing a good pre-trip inspection and checking your lug nuts and stuff, well the possibility of a set of duals coming off may have been minimized or something may have been caught that that prevented that from happening. So even if nobody got hurt or anything but it caused property damage, that can help creep up on prices on the insurance side of things.
Kenneth Nolley:
The age of your drivers, some insurance companies, they want the driver to have at least two years of experience before they can be placed on insurance. Qualifying the driver being very particular about who you hire, as far as MVR records and some insurance carriers, they will tell you, you're any driver that you hire has to fit within this box. They have to have this. Some insurance carriers have an age restriction as far as maybe on the higher end, maybe been a little bit older.
Kenneth Nolley:
Training ... Trying to be proactive on training to just try to safeguard against claims and poor inspections. I think that is another one. I'm sure that there's more to it than I'm just leaving off right now, but a lot of it really does and a lot of people just kind of shake your head when I keep coming back to compliance, because it is, it's really [crosstalk 00:25:33] really is that important. It is very important and having a good safe inspection history.
Michael Clements:
Well, to round us out today Kenneth, the really last question I have for you is where do you see technology in the industry going right now and how is it going to affect compliance and safety in the future?
Kenneth Nolley:
You bet. As I stated before, I think technology, we're just seeing the beginning of it with the ELD systems. There's other safety features out there. The forward facing cameras. Some companies, they even have the rear facing cameras and I think the thought process behind that is ... Well, if the driver knows that we're watching them too, there'll be less likely to be doing something that's prohibited by the company or by FMCSA, whether it be talking or texting on the phone, which they shouldn't be through handheld device anyway.
Kenneth Nolley:
But being able to capture some of that and get rid of the problems before there's a claim or before something bad happens. So being able to monitor that, I think sometimes it helps keep people on their toes being able to install lane departure warning systems. I've remember seeing some of these devices on trucks whenever back in 2005, 2006, 2007 a local [sand and gravel haller 00:26:41], I believe had equipment on their truck to help safeguard them from changing lanes at an unsafe time.
Kenneth Nolley:
And any money spent on that system that prevents crash, it's well worth it. There is ... The sky's the limit as far as the amount of technology. I mean you can monitor your reefer temperature from in the CAB. The motor carrier can monitor it. Some of the players on the ELD GPS systems early on, saw the numerous other opportunities to capture data and started developing systems that would. I think it's going to be imperative on the insurance side. I think that insurance is high anyway for trucking.
Kenneth Nolley:
It's a big risk, the biggest poachers out there on the road and not only are you worried about yourself, it's the other people that you have to be as a professional driver. You have to be conscious of them too and try to be able to take evasive measures to keep from a wreck occurrence. Those are some of the things. I know that there's some bills passed in some other state or propose rather, and other states that require GPS. I don't necessarily see that as a bad thing. We see hear stories from certain motor carriers being off routes that had no business being on.
Kenneth Nolley:
Maybe having a GPS provider that shows the actual truck routes to keep you off the routes that you're restricted from, whether it be for weight reasons or hype reasons or just heavily populated areas. I think technology is ... this is just the beginning of it. I think there's going to be a lot more employee and I think ultimately ... I know it's a lot of money upfront, but I think as we go along, I think the investment in the technology that we can help coordinate, when loads can be delivered, how many trucks need to be arriving in a location a certain time. I think hopefully they can employ technology to help alleviate some of those problems and a lot of excessive downtime.
Kenneth Nolley:
A lot of the detention time that is spent at loading facilities and unloading facilities and on the insurance part as well, just being out, being able to use that data to give a good risk assessment of whether a motor carrier is a safe motor carrier, not whether they're going to anticipate having to pay a claim and they're going to factor in extra premium on the front end of it if they're unsure about it just in case they do have to pay a claim.
Michael Clements:
Wonderful. Well, Kenneth, man, I think you've given us some awesome, awesome information today. I think our listeners are going to be definitely pleased with what they're hearing and what you've shared. So man, your experience is ... you have an abundance of experience and it showed today on the show and I really appreciate you coming on.
Kenneth Nolley:
I appreciate you having me. Thank you so much.
Michael Clements:
Yes, sir.
Katie:
Hello, this is Katie from PDQ America. I wanted to invite you to join our newsletter, the transmitter. If you'd like to receive the latest trucking news, industry insights and other valuable information. Every week, visit go.PDQamerica.com/podcast.