educating companies on the “true cost” of keeping drivers
on payroll. “A company may pay $15 an hour [in base
wages] for a driver and then we come in at $24 an hour,” he
says. “They don’t understand what’s involved with the $24
an hour.” He says the $9 differential covers the “soft” costs
of employment and payroll expenses, health insurance,
vacation pay, and the convenience, flexibility, and peace of
mind of knowing a support system is in place to supply
them with drivers as needed.
A success story
One operation that doesn’t have to be educated is Ryder
Integrated Logistics’ Phoenix facility, which provides third-partly logistics (3PL) support to Ford Motor Co. After some
internal debate, the facility in 2002 opted to use ProDrivers
rather than put drivers on payroll to serve the facility. “We
decided to give it a year, to play it by ear and see if it would
work,” says Erin Holmes, Ryder’s customer logistics manager at the facility.
Ryder has been very satisfied with the relationship,
according to Holmes. The ProDrivers operation is transparent to Ford, and there hasn’t been a safety issue in two
years. And while the ProDrivers wages are not necessarily
lower than what Ryder would pay, the ancillary savings—
especially in the workers’ compensation area—are significant, she says.
For ProDrivers, which generates about 70 percent of its
business from the so-called seasonal category, the next
objective, according to Grissom, is to expand into more
strategic relationships, where drivers are deeply embedded
in its customers’ operations. Virtually all ProDrivers customers are 3PLs and private fleets, though the company is
eliciting some interest from the for-hire category, he says.
TransForce doesn’t have those issues. As much as 65 percent of its business comes from strategic, long-term contracts, with for-hire truckers accounting for about one-quarter of its customer base, according to CEO Broom.
Staffing firms are confident about their prospects, no
matter how the economic winds blow. On one hand, they
say, many drivers like the freedom and flexibility of not
being tethered to one trucker, and their drivers feel they are
treated better with them than when they were payroll
employees. On the other, as companies downsize their
internal recruitment and human resource staffs, they will
increasingly turn to outside partners to deliver services that
had been performed in house, they contend.
And what happens when the economy recovers, freight
volumes build, now-idled capacity returns to the road, and
the old driver-shortage bugaboo returns?
The staffing firms appear unconcerned. As they see it,
their services will remain in demand as truckers, private
fleets, and 3PLs scramble for drivers. “We had driver shortages from 2004 to 2006, and we doubled our business during that time,” says Mike Mitchell, area vice president for
ProDrivers.
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