Upgrading your DOT safety rating
Updated: Aug 23, 2022
In 2021, the Federal Motor Carrier Safety Administration (FMCSA) and its state partners conducted a total of 7,989 federal compliance reviews of regulated motor carriers. 175 of those reviews resulted in the carrier receiving an Unsatisfactory safety rating, and a whopping 1,061 resulted in a Conditional safety rating. An Unsatisfactory and even a Conditional safety rating can take a substantial toll on your business. In a prior article, we discussed what steps you can take to proactively avoid a downgraded safety rating, but what do you do if you're already in that predicament? In this article, we'll explore why safety ratings matter, how they are assigned, and how to upgrade a rating either through an administrative appeal or by corrective action.
Why your safety rating matters
DOT safety ratings (aka safety fitness determinations) are reflections of a motor carrier's compliance with the Federal Motor Carrier Safety Regulations (FMCSRs), as of the date of the FMCSA audit that resulted in the rating. If an audit reveals substantial enough non-compliance, the carrier will receive an Unsatisfactory rating, which will ultimately result in the carrier being shut down. And aside from the regulatory consequences, safety ratings can also have commercial consequences, given that they are publicly-available through the FMCSA's online SAFER database.
Unsatisfactory ratings lead to operational out-of-service orders. Section 385.13 of the FMCSRs provides that carriers who receive Unsatisfactory ratings following a compliance review are "prohibited from operating a [commercial motor vehicle]" in both interstate and intrastate commerce, meaning that the carrier's entire fleet will be shut down once the Unsatisfactory rating becomes final. In practice, we've seen local law enforcement dispatched to the locations of an Unsatisfactory-rated carrier to physically remove the license plates from vehicles once the rating takes effect. Further, if the carrier is for-hire rather than private, the carrier's motor carrier operating authority will be automatically revoked as a result of the Unsatisfactory rating.
Conditional ratings can lead to increased insurance premiums. Conditional safety ratings do not result in operational out-of-service orders, but, from a regulatory perspective, are often accompanied by civil penalties. And aside from the regulatory consequences, Conditional ratings tend to lead to increased premiums on the carrier's commercial auto-liability insurance coverage--the idea being that, from an underwriting perspective, the carrier has been deemed less safe and more risky than if it had received a Satisfactory rating or no rating at all. The premium increase can be significant, and in practice, we've worked with a number of carriers who simply could not afford the increased premium after they received a Conditional rating.
Unsatisfactory and Conditional ratings can tarnish your goodwill and cause you to lose customers. Carriers (particularly for-hire) that receive a less-than-Satisfactory rating following an FMCSA audit risk losing business as a result. More and more, shippers and property brokers are unwilling to do business with motor carriers that have been assigned a Conditional (and certainly an Unsatisfactory) safety rating. Often, any written agreement that's in place between that carrier and its shipper or broker customer will mandate that the carrier maintain a Satisfactory rating or no rating. Thus, receiving a Conditional or Unsatisfactory rating can have a long-lasting impact on your customer relationships.
How your safety rating is assigned
The FMCSA determines a carrier's safety rating in accordance with the detailed safety rating methodology contained in Appendix B to 49 C.F.R. Part 385. As a preliminary matter, the FMCSA only issues safety ratings to carriers that have undergone a comprehensive on- or offsite compliance review. These audits are conducted by either the FMCSA or one of its state enforcement partners. Motor carriers are prioritized for these audits based, in part, on their roadside performance relative to their peers through a system known as the Safety Measurement System (SMS). Carriers with relatively high SMS scores in one or more of the seven measured categories are at an increased risk of an FMCSA audit.
Once a carrier is selected for a comprehensive audit, the investigator evaluates and rates the carrier's compliance in six broad factor areas: (1) general compliance (parts 387 and 390 of the FMCSRs); (2) driver (parts 382, 383, and 391 of the FMCSRs); (3) operational (parts 392 and 395 of the FMCSRs); (4) vehicle (parts 393 and 396 of the FMCSRs); (5) hazardous materials (part 397 of the FMCSRs and parts 171, 177, and 180 of the HMRs); and (6) accidents (based on the carrier's calculated accident rate).
Each individual factor rating depends on the number of "acute" and/or "critical" violations that the investigator uncovers within those factors. "Acute" regulations are those identified as such where noncompliance is so severe as to require immediate corrective actions by a motor carrier regardless of the overall safety posture of the motor carrier. An example is allowing a driver to operate a commercial motor vehicle after having test positive for drugs or alcohol. "Critical" regulations are those identified as such where noncompliance relates to management and/or operational controls. These are indicative of breakdowns in a carrier's management controls.
Whereas a single violation of an acute regulation has the potential to negatively impact a carrier's factor rating, violations of critical regulations require a violation rate of at least 10% of the files checked in order to impact the carrier's ratings. An example is a violation of the 11-hour driving rule. If, for example, an investigator reviews 30 days' worth of driver logs for 2 drivers during the audit (i.e., a total of 60 logs) and discovers 6 11-hour violations, this would amount to a critical violation since 10% of the files checked had that same violation. Click here to download an up-to-date list of all "acute" and "critical" regulations.
Once the investigator completes the audit, he/she will tally the number of acute and/or critical violations in each of the six factor areas. One acute or critical violation in any of the factors will result in a conditional rating in that factor (except in the operational factor, where acute and critical violations are double-weighted and thus result in an automatic unsatisfactory factor rating). Two or more acute or critical violations in any factor will result in an unsatisfactory rating in that factor. And once all factors are tallied, the agency uses the following chart to determine the carrier's overall proposed safety rating:
Less-than-Satisfactory safety ratings are considered "proposed" (as opposed to final) for a certain period of time following a compliance review. For general commodity carriers, the rating will remain proposed for a period of 60 days. For hazmat carriers, the rating is proposed for 45 days. Once the applicable time period expires, the rating will become final, assuming the carrier hasn't successfully upgraded the rating in the interim.
Upgrading a safety rating through an administrative appeal
One option for upgrading a less-than-Satisfactory safety rating is to file an administrative appeal using the procedures set forth in 49 C.F.R. 385.15. An administrative appeal is appropriate if the carrier believes the assigned safety rating was premised on legal or factual errors.
Importantly, the FMCSA has held that an administrative appeal is not appropriate in situations where the legal or factual errors committed would not ultimately change the safety rating that was assigned if corrected. As an example, let's say that your compliance review resulted in you receiving an Unsatisfactory rating in the operational (hours-of-service) factor, and Conditional ratings in the driver and accident factors, which led to an overall Conditional rating. And let's say that the FMCSA made a legal error that led to the Conditional rating in the driver factor, but was otherwise correct in its assessment. Even if you are correct about the legal error in the driver factor and your rating in that factor were, therefore, upgraded to Satisfactory, you would still be left with an overall Conditional rating due to the Unsatisfactory rating in the operational factor and the Conditional rating in the accident factor. Accordingly, an administrative appeal would not be appropriate in this circumstance.
If an administrative appeal is appropriate, it should be filed as soon as possible after the FMCSA issues the proposed rating. If the rating is Unsatisfactory, the FMCSA has a regulatory obligation to rule on the carrier's administrative appeal within a certain amount of time after it is submitted (i.e., within 30 days for hazmat carriers and within 45 days for non-hazmat carriers). Thus, if the Unsatisfactory rating is still in the "proposed" stage, it is imperative that the appeal is filed within 15 days after the rating is proposed, so that the FMCSA rules on the appeal before the rating becomes final, since filing an appeal does not extend the timeframe.
If, on the other hand, the rating is Conditional, the FMCSA is under no regulatory obligation to rule on the appeal within a certain amount of time. So, it is entirely possible that, even if you were to file the appeal shortly after the Conditional rating is proposed, the rating could become final before the FMCSA rules on your appeal.
In any event, administrative appeals must be filed within 90 days of the date the rating becomes final. Otherwise, your appeal option is deemed waived, and your only option for an upgrade would be one based on corrective actions, as discussed below.
Administrative appeals are initiated by filing a formal notice of appeal with the FMCSA's Chief Safety Officer who is based out of the FMCSA's headquarters in Washington, D.C. The notice must explain in detail the reasons why the carrier believes the rating was assigned in error, and attach any documentation or evidence to support its argument. Once the appeal is filed, the Chief Safety Officer typically requests that the agency respond to the carrier's appeal with its own version of the facts and law. And occasionally, the Chief Safety Officer will require the carrier to submit additional evidence or attend a conference to discuss the appeal. Once the case is fully briefed, the Chief Safety Officer will render his/her decision, which is considered a "final agency order." If the Chief Safety Officer grants the appeal, then the rating will be rescinded, but if not, the rating will be upheld. As a final agency order, the Chief Safety Officer's decision is appealable to federal circuit courts of appeal.
If you are considering filing an administrative appeal, we highly recommend engaging an attorney who is knowledgeable about the FMCSRs to assist.
Upgrading a safety rating through corrective action
Another option for upgrading a less-than-Satisfactory rating is to file an upgrade request based on corrective actions, as outlined in 49 C.F.R. 385.17. Although carriers can file upgrade requests at any time after the issuance of their safety rating, it is recommended that they be filed as soon as possible, particularly if the rating is Unsatisfactory.
As with administrative appeals, the FMCSA is under a regulatory obligation to review and rule on an Unsatisfactory-rated carrier's corrective action upgrade request within a certain amount of time after it is filed (i.e., 30 days for hazmat carriers and 45 days for non-hazmat carriers). Thus, if your Unsatisfactory rating is in the "proposed" stage, filing the upgrade request within 15 days after the rating is proposed will ensure you receive a response before that rating becomes final and your fleet is shut down. On the other hand, the FMCSA is under no regulatory obligation to review or rule on a Conditionally-rated carrier's upgrade request within any certain amount of time. And, in our experience, the agency may take several months to rule on the request, depending on the complexity of the issues involved. If you have lived with a less-than-Satisfactory rating for quite some time, you should know that the FMCSA may not be inclined to grant an upgrade request without coming back in and conducting another audit.
Carriers can initiate a corrective action upgrade request by filing an upgrade petition and Safety Management Plan (SMP) with the FMCSA's regional field office that oversees the region in which they are situated, with a copy to the FMCSA's state office in the state in which they are situated. Such requests must be based on evidence that the carrier has substantially corrected the violations that led to the downgraded rating. It is crucial that the carrier's SMP detail the steps the carrier to took to (a) identify the root cause(s) of any such violations; and (b) correct the issue so that the same types of violations do not reoccur in the future. In our experience, the evidence submitted with the request must be substantial and must demonstrate that the corrective actions have been effective at fixing the problems. In other words, bare assertions that the problems have been fixed without any corresponding proof will almost always result in the request being denied.
The corrective action upgrade request process sometimes requires some back-and-forth with the agency. For example, the agency may review the initial request and SMP and decide that it needs additional evidence, in which case it may ask the carrier to provide it. Alternatively, the agency may deny the request outright, but include instructions to the carrier for what steps must be taken and what information must be submitted if the carrier is to submit another request. If the agency does deny the carriers request, such denial can be appealed through the FMCSA's administrative appeal procedures discussed above, if the carrier believes that the agency acted unreasonably in denying the request. Otherwise, the carrier must continue to work on correcting the deficiencies, documenting the corrective actions, and filing another request.
Ultimately, if the agency is satisfied with the SMP, then it can upgrade the rating without any conditions. Importantly, in our experience, it is extremely rare for the FMCSA to upgrade an Unsatisfactory rating all the way to Satisfactory. Instead, the agency is much more likely to upgrade an Unsatisfactory rating to Conditional, and then require the carrier to submit another request in the future (after enough time has passed to evaluate the effectiveness of the carrier's corrective actions) another upgrade to Satisfactory.
In some cases, the FMCSA may impose certain conditions when upgrading a carrier's rating. Any such conditions will be included in a "consent agreement," which the carrier will sign in order to receive the upgraded rating. Often, the consent agreement will mandate that the carrier make periodic reports to the agency regarding the deficient areas and maintain certain levels of compliance. For example, the consent agreement may require the carrier to keep its hours-of-service SMS score below the alert threshold for a period of 2 years. If the carrier does not comply with the terms of the consent agreement, then the old rating will be reinstated.
Lastly, if your safety rating stemmed from violations discovered during a "focused audit" (i.e., one that did not involve a review of all six factor areas), you should note that it will not be possible to upgrade your rating to anything higher than the rating you had before that audit. For example, if you were an unrated carrier prior to a focused audit, and that focused audit resulted in you receiving a Conditional rating, the best result you can hope for in filing an upgrade request is that you will be returned to the unrated status. In other words, you would not be upgraded to Satisfactory based on your corrective actions.
Conclusion
A DOT safety rating is one of the most important assets for a motor carrier, and it should be protected at all costs. If you've found yourself with a less-than-Satisfactory rating, there are options available to upgrade that rating. If you need assistance with or guidance on preparing an upgrade request, we can help! Also, be sure to check out our detailed DOT enforcement master class through Trucksafe Academy, which provides even more in-depth training on how to improve your safety scores and rating.