Are We Facing a Potential Freight Market Shift?

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The state of California passed a law, starting on January 1, 2020, that will prevent truck owner/operators from leasing on or contracting with another trucking company as an independent contractor. Doing so, would impose significant liabilities on the companies that contract with owner-operators.

CA trucking companies don’t like this.

It will force them to “employ” all of their drivers as company drivers. Doing so costs them more in wages and insurance premiums.

CA owner-operators don’t like this.

Many aren’t able to operate profitably as a trucking company without the support of the larger company with whom they are contracted. Many would be forced out of business or forced to move to a different state.

Why should shippers care?

On one side, this will remove drivers from an already constrained driver market pushing rates up (especially if other states follow suit). On the other side, the case can be made that company employed drivers will add stability into long term costs and carrier performance.

For more news and trends, read the article from FreightWaves.

 

Posted by Steven Prince, Transportation Manager at LeanCor

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Results-driven logistics and transportation leader with expertise in carrier procurement and performance improvement, pricing, safety/rules compliance, strategy development, and supply chain implementation

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