Few shippers who import goods have not read this USA article on the alleged mistreatment of port drivers who move containers to and from seaports. If you haven’t, it’s a must read.
The article alleges chronic bad practices by carriers at Southern California ports, ranging from overwork to one-sided truck leasing deals that can bankrupt drivers.
Our industry has a problem and this article further substantiates how certain trucking companies, and even the shippers who hire them, are forcing drivers out of the workplace.
Driving is an essential and noble career that can provide a good living. But the sub-standard practices of some carriers, particularly when they are splashed across the pages of a national newspaper, make it difficult for ethical, high-quality carriers to attract and hire port drivers.
BCOs are at risk because of poor carrier practices
The root of the problem is the fact that drayage services are highly price competitive. Importers seek to move their goods at the lowest possible cost and, therefore, turn a blind eye to questionable practices in the quest for the lowest price.
The USA Today article quotes corporate ethics professor, Jeffrey Klink, who says “it’s easy for retailers to dodge accountability because they can argue they don’t directly hire port trucking companies.”
The problem is not limited to carriers with fleets and company drivers, which is the focus of the USA Today story. In fact, most port drayage is handled by independent drivers. Non-asset-based carriers contract with these independent drivers to avoid taxes, healthcare coverage and other overhead that hikes costs.
This model creates risk for BCOs.
In fact, SalSon just wrote a white paper on why the use of independent drivers for port drayage is a risk that large importers can’t afford to take. Read Rolling the Dice on Import Cargo.
The risks include:
- Unreliable source of capacity. When an importer uses a non-asset based dray carrier, these carriers rely on “on-call” drivers who can simply decide not to show up on a given day. They are not a dependable source of ongoing capacity
- Fewer independent drivers. Stepped up federal regulations on clean trucks and hours of service are cutting into the profitability of owner-operators. This has led existing independent port drivers to get out of the business and potential new drivers to seek other career paths.
- Potential liability. For economic reasons, independent drivers use older trucks and don’t invest to maintain trucks like an asset-based dray carrier like SalSon. This can lead to more accidents and liability issues should someone get hurt. Carriers push insurance responsibility to the owner-operator, who takes out the minimum amount of coverage. Increasingly, courts have been willing to assign liability to the BCO who is regularly contracting for these dray hauls.
Time for a Shift?
A huge part of our economy depends upon the efficient flow of goods into the U.S. This requires a sustainable corps of high-quality, port drivers. However, to minimize costs, we ignore questionable business practices and tolerate dray carriers that operate in the shadows, avoiding regulators and, until recently, avoiding the limelight.
With port drayage, importers contract with these low-cost providers and ask few questions about how goods are picked up and delivered. Long term, this strategy may backfire.
For importers that want to reduce risk and ensure reliable dray capacity, here’s a crazy idea. Perhaps it’s time to align with asset-based transportation companies that run the newest, cleanest dray fleets, maintain their own equipment, comply with applicable laws, pick up and deliver on time, and have a track record of ethical treatment of drivers.