This news service called ‘Loaded and Rolling’ is aimed at the trucking sector. The article here is intriguing. The author has postulated the downward swing of spot trucking rates compared to negotiated or contract rates as the driver for an apparent movement by owner-operator drivers back to large truckers rather than staying on their own. The evidence they cite comes from several large firms’ quarterly reports, which indicate how many drivers and tractors they have.
It’s easy to understand why drivers might want to do this. With fuel prices through the roof, they’d rather let the trucking firm foot that bill. And they can’t get a spot premium anymore for working alone. So signing on reduces their risk. It may also let them take advantage of fleet buying prices for services and for tractors themselves, which are quite pricey right now.
This doesn’t imply anything about the drivers’ status regarding independent contracting. While some drivers might become employees, many will remain independent contractors. It’s only California at present where the status of employee versus contractor is under such scrutiny.
But even there, the economics will favor a move for drivers to larger firms. The costs are everywhere, and with spot prices down it’s harder to earn a premium on piecework. In California, it’s mostly drayage drivers, who work short hauls to and from ports and distribution points, over relatively short distances, that are protesting having to become employees.
I think the protests won’t go on much longer, and won’t spread outside the ports. Port drayage involves short hauls, and when there’s not as much congestion, reasonable turn times. If a driver can do several turns a day and get home at night, being an owner-operator might be ok. But when delays and sudden changes in routing screw up driver schedules and paid time, drivers are not satisfied. Owner-operators have the luxury of parking their truck and working in another industry, such as construction. Employees can’t; but on the other hand, they can get benefits such as health care and pay for wait time at turns, and the trucking firm will be paying the fuel and billing the customer. But the questions about how AB5 will be administrated in California, especially for drayage drivers, can be settled without changing the law.
If more drivers what employee status, due to the economics, that will reduce the noise level also. And it will be easier to make sure trucking firms are not taking advantage of their drivers of whatever type.
July 27, 2022
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Supply Chain and Logistics 