While the ongoing freight market correction cycle has created a tough environment for trucking companies of all sizes and eaten into revenue and profits across the industry, the downturn in freight rates combined with climbing operating costs has likely been the toughest on our smallest companies — our one- and two-truck operators who are simply trying to break even, pay themselves what they can, and live to see a rebound. However, independent contractors with the right support and services at their fingertips don’t fear the current market. They’re not rolling in the dough, but they’re also not shaking in their boots and fretting about losing their trucks, their business, and their livelihoods.
That was my chief takeaway from Expediter Services’ Success In Trucking Engagement (SITE) in April attended by elite motor carriers, vendors focused on IC safety and success, and vetted independent contractors eager to start a business or grow an existing trucking business: With the right support, the right guidance, the right access to products and services, we help create an environment where our contractors can find a bridge to more profitable times ahead.
Here’s what I learned about how to properly support independent contractor drivers today — and through any market — to maintain a proper legal relationship with them while also helping them thrive and prosper in their work with your company.
Find the right balance between protecting their status as an independent while also providing appropriate support
As a fleet working with independent contractor drivers, it’s obviously imperative that you maintain their status as, well, independent. That means not forcing them to take certain loads, not providing them benefits, not telling them when they can and can’t work, where they need to fuel, requiring certain training or classes, requiring them to choose certain vendors — anything that exerts control over their independent business that could blur the lines of their classification status.
You must properly handle behavioral control, financial control, and the relationship at large. But there are plenty of opportunities for your fleet to support your contractors that doesn’t equate to completely hands off or over-management.
NTI last year talked to Doug Grawe, a transportation attorney and CEO of The Grawe Group, about all of the ways fleets can support their contractors, particularly in a tougher freight market, as well as pitfalls to avoid. You can read that resource here.
And in the case of Expediter Services, who operates as a third-party between carriers and independent contractors, their strategy is effective and proven. They have pooled vendors that offer support and services to their network of independent contractors so the drivers can focus their energy and efforts on safely delivering freight on time, and then rely on ES’ vendor network to handle tasks like managing paperwork and cash flow, minimizing tax obligations, finding better rates on insurance, accessing health insurance, managing truck notes and amortization schedules, fuel and equipment discounts — you get it. This type of service provides ICs’ access to services at rates and pricing befitting of a larger fleet, but at the one-truck level.
That could also be a strategy your fleet uses and then educates your ICs about, so long as you do not at all require use of those vendors or require participation in any type of program like that. You could also leverage a third-party service like ES so as to minimize your control over ICs — a strategy I would highly recommend.
Take an active role in educating and coaching ICs
As we noted last year in our blog talking to Doug Grawe, you absolutely can and should educate your independent contractors as much as possible by offering classes and resources to help them thrive. Coaching your contractors on how to run a successful small trucking business is perfectly OK and can help your contactors succeed and thrive. Think information and classes covering topics like spec’ing and choosing equipment, load selection, managing expenses, and any and all topics that will help them stay in the black.
Of course offer these resources as encouraged, but not required to your contractors.
Tap a point person internally
Tying in the two themes above, one effective approach I’ve seen over the years is designating a person or a team internally at a fleet that understand the separation of an IC and a motor carrier, and who can spearhead programs that offer the appropriate guidance, resources, and coaching for your contractors.
This person (or team) ideally would know what it takes to be successful based on what the IC can control — such as managing costs, choosing loads, understanding cash flow (especially related to load selection), and can work with your company’s ICs, and the right vendors to help them prosper through any market, up or down.
Having support and services available to your contractors is an invaluable asset. Few professional drivers wake up, and head to work with the goal of simply surviving – most are eager to work, to safely deliver every day, and to thrive!
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Don’t forget to check out our previous resources on helping your ICs navigate this current market cycle, available at this link. In the meantime, be safe and well. ~Leah
