enroute
outsourcing
the wheel
Truck driver leasing services are thriving in a down economy.
But what happens when business rebounds?
THE FIRST THING TO KNOW ABOUT THE CONCEPT OF TRUCK DRIVER
outsourcing is that it is not—pardon the pun—reinventing the wheel.
The practice of so-called driver leasing is commonplace in the world of warehouses and distribution centers. And the flex-staffing model has long been standard
operating procedure in many other industries.
But in the trucking business, where old habits are hard to break and where procedures governing manager-driver relations are deeply ingrained, flex staffing is
hardly mainstream stuff. In an industry where labor can account for up to 70 percent of a firm’s operating costs and where companies are leaving no stone unturned
in their quest for greater efficiencies, however, applying the “variable cost” model to
the economics of the driver workforce may be an idea whose time has come.
“We’re getting our foot in the door more frequently today than we were five years
ago,” says David Broom, CEO of TransForce Inc., a transport staffing firm based in
Springfield, Va.
ProDrivers, a unit of Atlanta-based staffing company Employbridge, shares that
optimism. “The case for driver outsourcing has never been stronger than it is today,”
says CEO Chip Grissom.
Under the outsourcing model, the staffing firms, not their customers, keep drivers on the payroll and meet all related expense and benefit obligations. They, not
their customers, absorb such potential liabilities as workers’ compensation, unemployment costs, and wrongful termination claims. They may not train the drivers,
but they ensure the drivers they hire are trained and in compliance with all applicable regulations. They can quickly dispatch drivers in an emergency, or they can supplement a customer’s in-house workforce with “dedicated” drivers who behave like
full-time employees but are paid by the staffing firm.
Proponents say the savings can be big. In a white paper released earlier this year
discussing the trend, ProDrivers laid out three scenarios involving an actual customer with a 52-person driver workforce. The first scenario utilizes 50 company drivers and two “supplemental” or seasonal drivers. The second has 40 company drivers,
10 “dedicated” or full-time equivalents, and two supplemental drivers. The third is a
“contract insourced” relationship where all 52 drivers are ProDrivers’ employees.
