This month in Overdrive, I examined a couple different alternatives to traditional leasing models carriers and their advisers are exploring for ways to avoid what some see as long-term growing challenges to the independent contractor business model.
Two models in particular stand a chance to take hold in the future, one being the conversion of a fleet of leased owner-operators to a contract fleet of true independents, running under their own respective authorities. In this model, the motor carrier who formerly leased with the owner-operators becomes a freight forwarder and files as such with the DOT, and the operators enjoy enhanced freedom to potentially run outside the forwarder’s pool of freight.
An example of this kind of fleet conversion in action exists in Rudolph Freight of Murray, Ky. For more about the freight forwarder model and Rudolph, check out the “Independent thinking” story in this month’s issue.
The second model, called by some watchers of trends in leasing the “Transportation Agent” model, puts an independent business entity (i.e., the agent, or TA) between a motor carrier and leased owner-operators to take care of driver qualification monitoring and all of the services that carriers often offer leased guys (and in some cases profit from those services), such as insurance programs, volume buying programs, etc.
At the time I was putting the story together, I talked to Contractor Management Services, who was moving in the direction of the Transportation Agent model, about their contractor-management software and various programs. Today, they’re working for carrier clients to take care of driver qualifications with active, ongoing safety monitoring. For the independent contractor owner-operators, CMS’ service holds the potential to in future make changing carriers much less of a burden, given potential portability of the qualification file.
In the process of writing the story, I’d also reached out to Equinox Owner-Operator Solutions, a company somewhat akin to ATBS in that they provide business-management tools for owner-operators, services that include help with accounting and business analysis, likewise access to equipment with various lease options. I’d been introduced to them at the Great American Trucking Show in August, and something about company president Michael Fife’s description of the company’s efforts to partner with carriers to help their owner-operators refine their businesses brought to mind the Transportation Agent model.
While neither Equinox nor CMS were close to anything as comprehensive as the way analysts describe the potential of the TA model in the story, I got word just this month that the two companies have entered into a partnership — between the two of them, their services combined come pretty close to the model.
At no added charge, CMS Members will now have access to numerous Equinox business services, including real-time profit-and-loss statements, quarterly tax liability estimations and their budget builder, as well as access to business advisers and tax consultants for guidance.
Along with having their own owner-operator profile web page for various purposes, Equinox clients will now be able to store public and private documents on the CMS network and access member benefits that include discounts on programs such as phone providers, store memberships, wellness programs, entertainment and travel. In the near future, the capability to create a business entity and access to the CMS Alert System will be available. This system allows owner-operators and carriers to communicate using system alerts and e-mail.
You can check out Equinox — and even obtain a free 30-day trial — via this link.
As more carriers turn to agents like CMS in the future to avoid control issues associated with independent contractor misclassification lawsuits and legal challenges, these kinds of organizations hold the potential to inject more freedom into leasing arrangements, ultimately — so heads up on it all for the future.
For more detail about it, as I noted above, check out the story in this month’s issue.
Thoughts on it all? Let me know in the comments here.
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