It's more difficult to operate in today's transportation environment than ever before.

Ok, not earth shattering news but you've already read all the “doom & gloom” and most likely have experienced significant changes to your business over the past few years. When examining impending changes to the current transportation landscape, most of us would start by acknowledging the 10,000 pound gorilla in the middle of the room - CSA (2010).

Its looming December implementation continues to be witnessed in industry safety management practices and felt in already razor thin margins. Investing in technological solutions such as EOBRs, PSPs, and “scorecards” to keep pace with competitors, and more importantly, to proactively manage regulatory compliance, will no longer be optional. CSA repercussions will include, but are not limited to; shipper rates and corresponding driver pay, joint negligence case law and underwriting insurance guidelines. Just to name a few.

Invariably, obstacles in the transportation segment surface. Our nation's ability to tackle these issues will continue to evolve due to cultural shifts in ideologies and demographics (see fellow expert BTTV blogger Dan Baker). Still, companies of all sizes continue to successfully rely upon the service of independent owner-operators to supply our nation with the essential goods which fuel our economy. Over the next few months the objective of this blog is to foster discussion on strategies helping companies maximize their investment in non-asset based capacities.

Certainly this is not the most favorable environment for Independent Contractors; Health Care Reform (Obama-care), IRS targeting employment misclassification (FedEx¹) and the “Fair Playing Field Act of 2010”, State's depleted unemployment trust funds², etc. If you are a motor carrier or shipper leveraging owner-operators during this driver shortage, how are you proactively managing this hostile landscape?

• What type(s) of Independent Contractor model is your company using?
  • W-2 driver, 1099 asset
  • Lease driver from Professional Employer Organization (PEO)
  • IC assumes majority of liability
  • IC obtains authority
• How is your company managing the financial, operational and risk components for the motor carrier, shipper and driver?
• What steps is your firm taking to continuously develop the skills, safety and business acumen of today's professional, independent driver?

By providing independent contractors with fundamental tools and guidance, especially to attract younger generations, you aren't guilty of employment misclassification; you're guilty of leadership.

Stay tuned as we continue this journey of delving into the independent contractors. In the mean time, feel free to contact us with any questions.

Onward and Upward!

¹ 10/21/10 FedEx Ground agreed to pay $2.3 million for improperly classifying 40 drivers as independent contractors; $1.1M for unemployment insurance premiums, $1.2M for penalties and interest. ² 8/4/10 Thirty One (31) States have borrowed almost $40 billion from the federal government to support exhausted unemployment funds.