Why is Swift Leaving Leased Owner-Operators Behind?

leased owner-operators

Swift Transportation, one of the largest carriers in the US, is reacting to the recent California Supreme Court ruling. The ruling, from April 2018, created changes in the way of leased owner-operator.

Before, leasing to owner-operators was the traditional model. But, an alternative to leasing gives loads to independents instead. Essentially, this concept is looked at as a work-around. However, the decision made by the California court set strict conditions on owner-operators. This makes it more difficult for carriers to lease to owner-operators.

Now, there’s been a lot of backlash since the decision. As a result, companies filed cases to fight the ruling. Both the Western States Trucking Association and the California Trucking Association are suing. However, companies are already feeling the impact of the decision.

For example, Swift, a branch of the Knight-Swift conglomerate, operates more than 30,000 trucks. And, nearly 5,000 of those are owner-operators. According to reports, Swift decided to end arrangements with its leased owner-operators based in California. They will do so if the owner-operators don’t meet certain conditions laid out in the ruling. In fact, they are now encouraging some of them to transition to independents.

Two of the owner-operators affected by this confirmed that they received notice from the company. Apparently, Swift informed them that they must make a decision by the beginning of March. While it is uncertain how many leased owner-operators the policy impacts, estimates show that it could be up to 20% of Swift’s owner-operators. This means about 1,000 of the 5,000 may feel the impacts.

These recent rulings created tension and difficulties in the trucking industry. This impacts many independent contractor relationships throughout the state of California. What do you think of the ruling? Do you think the federal court will overrule the new laws for leased owner-operators?

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