Brokerage risk, the Affordable Care Act and the question of safety and insurance – these are three major issues affecting the vehicle haulage business in North America and all three were under discussion at the first meeting of the Auto Haulers Association of America, recently held in Atlanta.

The Association was founded last July by a number of leading US companies involved in vehicle haulage including Hansen and Adkins Auto Transport, Proficient Auto Transport, Amerifleet, Virginia Transportation, Bill Fralic Insurance Services and Brothers Auto Transport. Their aim is to promote the sharing of information and the establishment of shared best practices for improved operational performance amongst small to medium-sized car carriers in North America. The Association’s motto is “Delivering customer satisfaction by improving our members’ operational performance” and it now has 11 carrier members and six equipment suppliers.

The Association’s general manager Bill Schroeder, former owner of Willam P Schroeder Consulting, said that the point of the Association is to concentrate on the day-to-day issues that affect the running of the hauler business.

In the US an employee is either a W-2 employee or covered by the 1099 corporation and, according to Schroeder, there may be a significant regulatory impact on how subcontracted drivers are defined. This can affect health insurance liability.

The brokerage risk associated with the use of subcontractors at times of peak demand is an issue affecting many in the industry.  From discussions between Association members and presenters at the recent meeting, haulers using subcontractors should be looking at setting up separate corporations when dealing with subcontractors so they are not fully liable in the event of damage to equipment.

According to Schroeder a message from the speakers is that carriers should insist that subcontractors have a type of insurance called Constructive Total Loss, which covers an incident where the cost of replacement of a new vehicle exceeds the allowable cost to repair the equipment.

Another important topic under discussion at the meeting involved how to improve the working relatinship said Schroeder. “It is one thing to compete – and you have to compete hard – but we should not be doing things like taking each others drivers without a courtesy call.”

The temporary benefit of getting that driver is less important than the long-term aim of getting more employees into the driver pool said Schroeder, something the industry needs to work on together.

Driver recruitment is a big issue for the haulage sector and legislation enforced by the Department of Transport’s Federal Motor Carrier Safety Administration (FMCSA) affects everything from customer contracts to insurance.

“The driver question is what is going to determine everything for [the hauler] in the future, including whether you are insurable and the rate of insurance,” said Schroeder.

Representatives from Carolina Casualty presented a range of statistics that showed that having specific practices in place has shown to reduce accidents by significant percentages.  The fundamental message was that problems were avoided by putting best practices in early and a longer probationary period for drivers was one of them.

The meeting also involved discussion with the Department of Transport’s Nate Seymour and the issue of defects investigation and recall.

“We are setting up a relationship with him where he can push information to us and ask questions of our people, such as how many of you have such-and-such a model of truck. Or are you experiencing a particular problem,” said Schroeder. “Establishing a tight relationship will help him help us. It will mean that systemic problems in the industry won’t drag on before they hit the light of day and we can stop them more quickly through collaboration.”

The clear message from the carriers (and suppliers) was that the more companies collaborating, the better for the industry; a message the Association is eager to get out to other haulers and suppliers.

The next meeting of the Auto Haulers Association of America will be held just ahead of the FVL North America conference which will take place between 5-7th June 2013.