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Dollars & Sense

When Your Carrier Goes Under, You Don't Have To...

By Jason W. McGlone
Posted Feb 24th 2010 6:41AM
Whether you're an Owner/Operator or a direct employee, it's never good to see your carrier go under.  Granted, it's rarely as bad a situation as what we've seen happen lately with Arrow Trucking, and many situations were made worse for Arrow truckers because they were direct employees.  Too, it seems to continue to be getting worse for Arrow, specifically in that reports are beginning to surface that medical and other financial claims are apparently being allowed to sit unpaid. 

So, here's the question: what recourse, if any, do you have when your carrier goes under, and what should you do?

What's Your Relationship?

Most folks driving in the expediting industry are Owner/Operators, which, if this makes any sense, is a difficult proposition when a carrier exits business.  Here's why: your truck is yours, and the carrier, technically speaking, is a client.  There's a lot that needs to be taken into account and much to be done, and as you're your own business, so to speak, things can be a lot more involved than if you're, say, an in-house employee of the carrier. 

Being a direct employee, of course, carries a set of bad possibilities all its own when your carrier goes own of business.  Situations like the Arrow Trucking debacle aren't typical, but in what might be a "milder" case, the waters of navigating a company going out of business might be considered a bit calmer. 

Which isn't to say that there are blessings to be counted; a carrier going out of business isn't really good for anyone.  Fewer carriers means fewer jobs, if only for a period of time.  In the big picture, a carrier going out of business could be a short-term positive for other carriers, as there's a likelihood of there being a brief increase in freight to be hauled for a time following the carrier's exit.  But how does that help the carrier's drivers?

What To Do

Depending upon your situation, what you don't do can prove to be just as important as what you do do.  So what don't you want to do?  Panic.  Seriously.  Don't panic.  First of all, it's not really going to help much.  In a threat at the ExpeditersOnline forums, Dynamite 1 says, "I would say the first and most important thing to do is not to panic or make rash decisions. Treat it as a normal carrier change and do your research."

Transporter, another EO forums regular, builds on this idea with, "Every expediting driver, owner/operator, or independent should have already have a company that they ready to jump on board with, just in case something happens."

The main idea here, and this was echoed by several other members, is that as independent contractors, the most prudent idea is to do your best to treat a carrier shutting down as though you were simply ending your relationship with them.  Of course, this approach isn't necessarily without its possible difficulties--if you're "ending your relationship" with a carrier, there are, in this case, lots of other drivers doing the same thing.  This means that simply "jumping on board" with another carrier could prove to be a difficult proposition, as forums Senior member Crazynuff says.  "The problem is when a carrier shuts down there will be a lot of contractors trying to make that move.  With today's economy will other carriers have a need to sign them on?"

On top of this, there's the matter of collecting any pay that might be due to you.  The best-case scenario, of course, is that the carrier pays you just as they had been all along, and that's that.  The worst case?  Well, it can be a mess to say the least, and it's times like those that you tend to find out just how good a job you've done in setting up your affairs as an Owner/Operator.  In the end, making sure that you get what's owed to you might be the most important thing, and it might prove to be one of the more difficult things to achieve in the event that a carrier goes under, depending upon that carrier's situation. 

Lawyer or no lawyer?

The question of whether or not one should contact legal representation in an event like this actually caused some reasonably lively debate in the forum post.  In short, some folks said that they would get in touch with their lawyer and some said that such action would be a waste of time--and money, especially since lawyers can tend to be expensive and such expense to collect what might turn out to be a comparatively small amount could turn out to be a wash. 

This is exactly the underlying issue that could, and perhaps should, dictate how fervently you might pursue collecting against a carrier that's gone out of business--will it be a wash?  A loss?  Do you keep an attorney on retainer?  If so, the chances are pretty good that you've paid them already (or are going to), and so further pursuing could be an advantage for you in such a situation. 

So, what's next?

In the end, losing your carrier is definitely a rough thing, and it's unfortunately been something of a sign of the recent times that many have to worry about.  As Owner/Operators, you're your own business and your first concern, as you're aware, has to be you.  The most important thing to do in a situation like this is to look ahead to your future business contacts and to maintain the health of your own business.

2 Comments

  • - February 26, 2010
    Robert Helm-=|=-If a carrier goes under who is at fault?
    Is it because of bad management. Or is it the Owner/Operators? I work as a expediter for a few years. Was an Owner /Operator of a straight truck.
    I was only getting 60% from what ever the total cost of the load was. The carrier got 40%. Then you have to take into consideration how honest the carrier is. Given me a lower price and getting a higher price from the shipper. I don't know what happen with Arrow. But from the stories I have read, they weren't to honest with their Owner/Operators either. Taking money out of weekly pay saying that it was going to pay for their truck when it wasn't. And when Arrow closed driver's thinking that their trucks are almost paid off but Arrow keep their money that was to go for truck payments. So really it doesn't matter to me if a dishonest carrier goes out of business. What really matters is how honest you are to other people. And the way you treat others also makes a big differents. I still don't know how some carriers treat their Owner/Operators like dirt and still be in business. Their recruiters must lie alot to get Owner/Operators to sign up with them.
    To make a long story short. What you do to others will always come back to you. Is there a web site just for truck drivers to vent out their feelings about these carriers?
  • - February 26, 2010
    Robert Helm-=|=-If a carrier goes under who is at fault?
    Is it because of bad management. Or is it the Owner/Operators? I work as a expediter for a few years. Was an Owner /Operator of a straight truck.
    I was only getting 60% from what ever the total cost of the load was. The carrier got 40%. Then you have to take into consideration how honest the carrier is. Given me a lower price and getting a higher price from the shipper. I don't know what happen with Arrow. But from the stories I have read, they weren't to honest with their Owner/Operators either. Taking money out of weekly pay saying that it was going to pay for their truck when it wasn't. And when Arrow closed driver's thinking that their trucks are almost paid off but Arrow keep their money that was to go for truck payments. So really it doesn't matter to me if a dishonest carrier goes out of business. What really matters is how honest you are to other people. And the way you treat others also makes a big differents. I still don't know how some carriers treat their Owner/Operators like dirt and still be in business. Their recruiters must lie alot to get Owner/Operators to sign up with them.
    To make a long story short. What you do to others will always come back to you. Is there a web site just for truck drivers to vent out their feelings about these carriers?

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