Decision

Decision for SMI Logistic Ltd

Published 12 April 2024

0.1 EAST OF ENGLAND TRAFFIC AREA

1. DECISION OF THE DEPUTY TRAFFIC COMMISSIONER

2. PUBLIC INQUIRY HELD IN CAMBRIDGE ON 29 FEBRUARY 2024

3. OPERATOR: SMI LOGISTIC LTD LICENCE OF1124061

4. Background

SMI Logistic Ltd (“SMI”) holds a standard international goods vehicle operator’s licence (OF1124061) for four vehicles and four trailers (although the company applied on 25 February 2024 to reduce this authority to two vehicles and two trailers). There is one vehicle currently specified on the licence, which was granted in June 2014. The sole director of the company is Mariusz Dulkiewicz. The nominated transport manager on the licence is Karolina Rogucka.

5. S-marked prohibition and DVSA investigation

On 11 August 2023 one of the company’s vehicles AE11 ELJ was stopped at the roadside by DVSA and issued with an immediate S-marked prohibition (denoting a significant failure in the maintenance system) for tyre tread worn away, exposing 80mm of cords. The fuel tank was also found to be insecure. The vehicle’s trailer was issued with an immediate prohibition for a disconnected locking pin and a delayed prohibition for a damaged suspension unit.

DVSA vehicle examiner Paul Dolby visited the operator on 22 August 2023 to carry out a follow-up investigation. His report marked the operator as “unsatisfactory” for the following reasons:

• the preventative maintenance inspection (PMI) intervals had been exceeded;

• the PMI sheets showed no evidence of any form of brake testing;

• driver defect reports, including those immediately prior to the S-marked prohibition, never recorded any defects;

• there was no system for recording vehicles off road (VOR); there was no forward planner.

• the maintenance contractor who carried out the PMIs was a mobile mechanic, operating from a van. His maintenance facilities were inadequate. He had carried out a PMI on AE11 ELJ just three days before the stop on 11 August 2023 and had failed to identify any defects, although the defective tyre and fuel tank should have been evident;

• there was no system for managing wheels/tyres;

• the transport manager Karolina Rogucka was not exercising effective management of the transport activities of the business. Records had not been readily available during the vehicle examiner’s visit.

On 28 November 2023, the traffic commissioner’s office wrote to SMI proposing to revoke its licence under Sections 26(1) and 27(1) of the 1995 Act. The company duly responded to this letter by requesting a public inquiry. SMI also stated that it had arranged for an independent audit to be carried out in January 2024 and that it would make a copy available in advance of the inquiry.

6. Audit

The audit, carried out on 5 January 2024 by John Bagley of Compass Transport Solutions Ltd, was duly submitted a short while later. The auditor scored the operator as only 36% compliant. Many of his conclusions matched those of VE Dolby some five months earlier. Mr Bagley found that:

• Karolina Rogucka was acting as transport manager in name only; she had “not visited either the operating centre or the director for some months and did not demonstrate continuous or effective control”;

• the director Mariusz Dulkiewicz had “a very vague view of what the undertakings of the O-licence actually meant” and “a lack of understanding of the responsibilities of an operator”;

• there was no provision for brake testing other than at MOT;

• PMIs were completed by a mobile mechanic and appointments were only made with him the week they needed doing. No one checked the PMI sheets before the vehicle was put back into service. Some PMIs had been missed. There was still no forward planner;

• there was no system for checking the effectiveness of drivers’ daily walk-round checks. There was “an abundance of nil defect sheets” that did not accord with the defects listed on the PMI sheets. A “culture of cutting corners” was apparent with defect checks;

• no wheel/tyre policy or torque register was yet in place;

• the director had no access to the tachograph analysis system. Only the transport manager had access but it was not made available on the day of the audit. The auditor had seen a folder of printed out drivers’ hours infringement reports but these had not been signed by the transport manager (or director) and there were no explanations for the infringements. There was no missing mileage reconciliation or any awareness of how to keep an effective account of this.

Mr Bagley concluded that the majority of the failings were due to the transport manager being one in name only. He did add that, with the right support and person in place, he believed that SMI would be capable of being a compliant operator.

7. Public inquiry

Call-up letters were sent to the operator and transport manager on 25 January 2024, citing Section 26(1)(b), (c)(iii), (e), (f) and (h) and Section 27(1) of the 1995 Act. The inquiry was held in Cambridge on 29 February 2024.

7.1 Updates

A few days before the inquiry I received updated reports from DVSA vehicle examiner Paul Dolby, who had examined the operator’s most recent records. He reported that:

• SMI were still using the unsatisfactory mobile mechanic;

• PMIs were now generally completed on time (with one exception). However, brake tests were still not being carried out (with the exception of the one at MOT and one very recent (unladen) one for AE11 ELJ;

• drivers still seemed to be missing defects on their walk-round checks. A pre-MOT PMI had identified three loose wheel nuts and a tyre tread worn to 2mm. Neither had been identified on walk-round checks;

• the prohibition issued to AE11 ELJ on 11 August 2023 had been varied (once the immediately prohibitable defects had been fixed) to allow the operator until 18 August to fix the remaining defects and present the vehicle at an MOT testing station for the prohibition to be cleared. The operator had failed to do this until the vehicle’s annual MOT on 31 October 2023, yet it was clear from the walk-round check records that the vehicle had been in constant service between 11 September and 31 October 2023 while still under prohibition.

7.2 Public inquiry

SMI director Mariusz Dulkiewicz and transport manager Karolina Rogucka attended the inquiry, along with a Polish interpreter. Mr Dulkiewicz said that he was now operating only one vehicle and had appointed a new maintenance contractor, Halls Vehicle Services Ltd from 25 January 2024. He produced the first PMI carried out by Halls, dated 28 February 2024 (the day before the inquiry). I noted that the PMI sheet had not recorded tyre pressures and noted that it stated that the operator had “declined” a brake test. The PMI did not sign the vehicle off as roadworthy. Four defects had been identified, but the action taken was “report to owner all above faults, await instruction”. Mr Dulkiewicz said he had since instructed Halls to rectify the defects.

Only one brake test record was provided (other than the brake test at MOT), a roller brake test carried out on 26 January 2024 to AE11 ELJ. I noted that it was not coterminous with the PMI which had been carried out by the mobile mechanic on 20 January: nor was it within the permissible seven days prior to the PMI. The roller brake test had been unladen, with insufficient load on both axle 2 and axle 3. Wheel imbalances of more than 30% were recorded on all three axles.

Mr Dulkiewicz said he had now begun to tackle the issue of ineffective driver walk-round checks. He had not realised until the audit just how serious this issue was. I noted however that all four defects listed on the PMI dated 28 February 2024 were driver detectable.

Mr Dulkiewicz said that he was planning to attend an operator licence management course later in the year.

Asked about why he had continued to operate AE11 ELJ for two months while it was still prohibited, Mr Dulkiewicz said that he had thought that the mobile mechanic’s inspection had been sufficient to lift the prohibition.

Transport manager Karolina Rogucka said that she had spoken with the mobile mechanic and the operator about the S-marked prohibition. She had not appointed a new maintenance provider until January 2024 because Halls had had no capacity to take them on until then. She had spoken with drivers in January 2024 and stressed to them the importance of effective driver walk-round checks. She had showed drivers how to carry out such checks previously, in September 2023. She could not offer an explanation for why AE11 ELJ had been operated throughout September and October 2023 while still under prohibition.

7.3 Closing submissions

Mariusz Dulkiewicz said that he was trying to find a new transport manager. But there were few transport managers prepared to act on a licence with only one vehicle. He had employed an independent auditor after receiving the “propose to revoke” letter and now asked for a chance to implement its recommendations and improve. He had voluntarily reduced the number of authorised vehicles from four to two and in practice was currently operating just the one. He was now using a tyre contractor, Bush, to look after tyres. The tyres had been in a good condition in August 2023, but the driver had not been careful.

Karolina Rogucka said that she had tried to make lots of changes following the DVSA visit in August 2023. She had stayed on the licence in order to face the music at today’s public inquiry. She hoped to be more effective until the operator found a new transport manager. She had always tried to sort out PMIs and MOTs on time. She had talked frequently to drivers about tachograph infringements although she had not signed the written infringement reports. She had made changes and compliance would be better from now on.

8. Findings

After considering all the evidence, I make the following findings:

• the company’s vehicles have incurred prohibitions (Section 26(1)(c)(iii) of the 1995 Act refers). AE11 ELJ attracted an S-marked prohibition on 11 August 2023 for a seriously defective tyre. The trailer was also given prohibitions for a disconnected locking pin and a suspension defect. The driver was issued with a fixed penalty for not having an in-cab height indicator in the cab (Section 26(1)(ca) refers);

• the company has failed to fulfil the promise, given on application, that vehicles would be given a safety inspection every six weeks (Section 26(1)(e) refers). DVSA reported gaps of 11 and 17 weeks between inspections for AE11 ELJ between October 2022 and May 2023. For the other vehicle specified at that time, EU11 FPD, there were gaps of 12 and 16 weeks between September 2022 and April 2023. There were no records to suggest that the vehicles were off the road at these times;

• the company has failed to fulfil its undertakings (Section 26(1)(f)) refers) –

• to keep vehicles fit and serviceable. No brake tests of any kind were carried out (apart from at MOT) until AE11 ELJ had an unladen roller brake test on 26 January 2024. That test revealed serious imbalances (at least 30% and up to 46%) on all three axles, apparently unnoticed and unaddressed by both director and transport manager;

• to ensure that drivers report defects in writing. Drivers have clearly failed to identify and report defects such as unserviceable lights and  wipers, as well as worn tyres and loose wheel nuts. There has been no discernible sign of improvement: the most recent PMI sheet records a chip in the middle of the windscreen, a split wiper blade, an engine oil leak and an offside rear lightbulb not working. All these defects should have been spotted by drivers and reported to the operator – not await the next six week inspection to be identified and assessed;

• to ensure that rules relating to drivers’ hours and tachographs are observed. According to the auditor Mr Bagley, minimal systems were in place. Although downloads were being done, there was no effective management of infringements or any monitoring of missing mileage (driving without a card).  

• transport manager Karolina Rogucka is not of good repute (Schedule 3 and Section 27(1)(b) of the 1995 Act refer). She has clearly failed to exercise the required continuous and effective management of the transport activities of the business. On her watch PMIs have not been carried out at six week intervals, brake tests have not been carried out, and drivers have failed to record defects in writing. She had almost no systems in place to ensure the observance of drivers’ hours rules and, according to the independent auditor, did not understand the tachograph analysis system. The auditor describes her as a transport manager “in name only”. Although Ms Rogucka claimed during the inquiry that she had visited the operator regularly, I found almost no concrete evidence of this (in the form of drivers’ hours infringement reports or driver gate checks signed by her, for example). Ms Rogucka accepted that she did not have a signed contract with the operator setting out her duties (although she expressly confirmed that she did have such a contract when signing the TM1 nomination form). She did inform me that her remuneration as transport manager was an extraordinarily low £redacted per month, which helps explain why she has not been sufficiently active on the licence.

9. Consideration

Rather like the auditor Mr Bagley, I gained the strong impression at the public inquiry that director Mariusz Dulkiewicz knew little of the requirements of HGV operator licensing. He was content to operate with a transport manager whom he hardly ever saw. He has failed to make sufficient improvements following the visit of the vehicle examiner: the auditor’s report some five months later revealed very similar shortcomings, notably the lack of brake testing, ineffective driver defect reporting and failure to monitor and manage drivers’ hours correctly. He was under the impression that a DVSA prohibition could be lifted by his own mobile mechanic, despite the prohibition notice clearly stating that the prohibition could only be lifted by prior appointment at an official testing station. Despite indicating to the auditor that he planned to attend an operator licence management training (OLAT) course “at the first opportunity this year”, at the inquiry on 29 February Mr Dulkiewicz had not yet arranged (still less attended) such a course, saying merely that he planned to attend one “later in the year”.

10. Balancing act

I weighed up the negative against the positive issues. On the negative side were the above findings. On the positive side were the fact that PMIs since August 2023 had (with one exception) been completed at the stated six week intervals. A new maintenance contractor has been appointed (although it has as yet only performed one safety inspection). The operator’s MOT pass rate is very good (100%). But these positive features are not enough to compensate for the serious issues found by the DVSA vehicle examiner Paul Dolby, the operator’s lethargic response to it and the independent auditor’s damning findings five months later.

10.1 Priority Freight and Bryan Haulage questions

I asked myself if I could trust this operator to be compliant in the future (the Priority Freight question). The answer I am afraid is no. Mr Dulkiewicz took little effective action even after the S-marked prohibition and adverse DVSA investigation report. He has not made good his commitment to the auditor to attend an OLAT course. What action he has taken is too little and too late. I have no confidence in his ability to turn things around.

A negative answer to the Priority Freight question tends to suggest an affirmative answer to the Bryan Haulage question of whether the operator deserves to go out of business. Because of the range, seriousness and the duration of this operator’s shortcomings, I conclude that it does.

11. Decisions

11.1 Operator licence – revocation

I have concluded that the operator lacks a transport manager who has good repute. The operator is therefore without professional competence and (given Mr Dulkiewicz’s lack of knowledge and drive) I am not prepared to allow a period of grace to operate without a transport manager. Revocation of the licence is therefore mandatory under Section 27(1)(a) of the 1995 Act. I am also revoking it under Section 26(1)(c)(iii), (ca), (e) and (f) of the 1995 Act (see the findings above). I am allowing 28 days for the operator to wind down its business: the  revocation will take effect from 0001 hours on 11 April 2024.

11.2 Disqualification – operator

For the reasons outlined above, and having performed the same balancing act, I conclude that both the company and director Mariusz Dulkiewicz should be disqualified under Section 28 from holding or obtaining an operator’s licence in the future and (in Mr Dulkiewicz’s case) from being the director of any company holding or obtaining such a licence. In deciding upon the length of the disqualification, I have taken account of paragraph 108 of the Senior Traffic Commissioner’s Statutory Guidance Document 10. This states that for a first inquiry a disqualification of between one and three years could be appropriate. Because Mr Dulkiewicz’s failures have arisen more out of a failure to understand the regulatory regime and a failure to take sufficiently swift and thorough corrective action, I have decided to impose a disqualification period - 12 months - at the lower end of this scale. Mr Dulkiewicz should use this period, if he wishes to re-enter the industry thereafter – to attend relevant training and acquire the necessary knowledge of the requirements for holders of an operator licence. 

11.3 Disqualification – transport manager

Having removed her good repute, I must also disqualify Karolina Rogucka from acting as transport manager on any operator’s licence (paragraph 16 of Schedule 3 refers). She has failed to appreciate that, although some tasks can be carried out remotely, an absentee transport manager cannot continuously and effectively manage a licence. Certainly she failed to ensure that the operator’s response to the DVSA investigation was swift and robust. For reasons similar to those set out in the paragraph immediately above, I am imposing the minimum disqualification period recommended by the Senior Traffic Commissioner – one year. Ms Rogucka is disqualified from acting as a transport manager with immediate effect until 13 March 2025.

Nicholas Denton

Deputy Traffic Commissioner

12 March 2024