The topic of driver misclassification and Driver Inc. is a major factor in why smaller carriers are struggling in a down market, according to carriers speaking at the Truckload Carriers Association\u2019s annual Bridging Border Barriers event in Mississauga, Ont.<\/p>\n
As reported by James Menzies of Trucknews.com<\/em>:<\/p>\n Mark Bylsma, president of Spring Creek Carriers, spoke about competition against carriers that illegally classify company drivers as independent contractors to avoid paying certain source deductions and taxes. \u201cDriver Inc. carriers are dabbling their toes in the partial load business; it\u2019s not something we\u2019re free of anymore.\u201d<\/p>\n He even called out some of the carriers within the room for \u201cgiving freight to the Driver Inc. world\u201d through their brokerages.<\/p>\n Julie Tanguay, president and CEO of EG Gray Transportation in Peterborough, Ont., said she has encountered it in rural areas as well.<\/p>\n \u201cThe Driver Inc. issue is industry-wide. It doesn\u2019t matter if you\u2019re small, medium or large. Kawarthas or the Greater Toronto Area,\u201d she said. \u201cIt\u2019s becoming more prominent and harder to compete with. They\u2019re everywhere, knocking on doors \u2013 especially in a freight recession \u2013 and they\u2019re willing to go anywhere and do anything.\u201d<\/p>\n James Steed, president of Steed Standard Transport, blamed the government for favoring an educational approach over actual enforcement. He noted there\u2019s no need to create new legislation, just to enforce the rules already on the books.<\/p>\n Looking at the broader issues facing the industry, Bylsma said capacity has been slower than expected to leave the market. \u201cFailures bring supply and demand back in line,\u201d he noted. \u201cWe\u2019re not seeing the failure rate that we should.\u201d<\/p>\n He said freight volumes are out of whack, with strong volumes headed south but little to bring back north. Spring Creek is heavily reliant on the spot market, where Bylsma said northbound rates are 75-80 cents\/mile below normal.<\/p>\n Tanguay added the recent requirement for federally regulated carriers to offer paid sick days to drivers has also eaten into profits. At EG Gray, she has been poring over the profit-and-loss (P&L) statements looking for ways to cut costs without eliminating jobs.<\/p>\n At Spring Creek Carriers it\u2019s all hands on deck. The president himself has returned to his roots at times, doing dispatch for the first times in 20 years. \u201cIt\u2019s nice to dip your toe back in that water once in a while,\u201d Bylsma said. His company has also focused on the maintenance department for potential savings.<\/p>\n Asked how the carriers are managing relationships with drivers in a down market when pay increases aren\u2019t feasible, Tanguay said it\u2019s about communication. She said she normally works Saturdays and keeps her door open and is willing to have \u201chonest discussions\u201d with drivers who come to see her.<\/p>\n \u201cMost of our cross-border drivers see the trucks parked at the truck stops and are very thankful we keep them rolling,\u201d she said.<\/p>\n Bylsma favored paying bonuses over permanent pay increases during the post-Covid boom, which has served the company well since the tide turned.<\/p>\n