Allow me to clarify my statement.
I am beholden to no one. By this, I mean that I am not obligated to run any particular load.
Neither is a FedEx Custom Critical contractor. We can decline any load offer we wish.
If somebody calls me and I'm not within a reasonable range, or under another load, then I can't very well run it, can I?
Nor can a FedEx Custom Critical contractor.
Since you are leased to Fedex, you cannot run loads for anybody else, is that not correct?
That is not correct. Our lease permits us to run loads for other shippers independent of FedEx. We can also run loads that we find on our own and run under our carrier's authority through their "Home Run" program. Diane and I seldom do so because it is more trouble than it is worth, but it can be done without putting our lease in jepordy.
Therefore, while you are in fact a contractor, you are not an independent contractor. You can refuse loads, true enough. However, without your own authorities and insurance policies in place, you can't get your own load from boards like DAT360 or getloaded.com, right? Right.
Your premise is incorrect on two counts. First, Independent contractor status is not determined by how you buy your insurance or who you get it from. You are legally required to have it no matter what kind of authority you run under. For IRS purposes, your source of insurance is irrelevant in determining independent contractor status. If our insurance was given to us by our carrier and we had no other choice as to where to get it, that would be different. But as FedEx Custom Critical independent contractors, we buy our own insurance from souces we deem best.
Second, we can indeed get loads off load boards like the ones you mentioned. Diane and I have done that very thing when finding freight on our own. Again, we seldom do it, but it can be done.
If I am not mistaken, you are on a group insurance policy which you obtained through channels at Fedex. You are simply not covered to do work for anybody else.
You are mistaken. Insurance coverage varies from contractor to contractor. We are not required to buy our insurance through FedEx channels. We are only required to have insurance as a condition of maintaining our lease. Many contractors buy their insurance through FedEx because the group policy costs less than individual coverage and the claims service is generally good. Having such coverage does not preclude us from buying additional coverage from other sources if such coverage was needed to run freight for someone else while also maintaining a lease with FedEx Custom Critical.
I can walk into any shipper and negotiate a load on the spot, present my insurance certificates, even have them named on a cert within 30 minutes and faxed directly to them by my insurance carrier (during west coast business hours), and drive out with their freight if they decide to hire me. I can tender airfreight for unknown shippers by performing ID checks and site inspections on the fly.
So could Diane and me if we jumped through the same hoops you did. We do not do so, not because we can't, but beause the freedom we enjoy and the good money we make at FedEx Custom Critical makes it unnecessary to do so.
Nobody is saying you're not a good expediter simply because you're not independent, nothing could be further from the truth.
Understood. You are not saying we are not good expediters. But you are incorrect when you say we are not independent. We are free to find and haul our own freight, interact directly with customers, buy our own insurance, set our own rates, etc. Just because we do not do so, it does not follow that we can't.
I have merely taken the same steps anybody else can take and formed a corporation, filed the DBA, got my EIN number, got the business checking account and line of credit, obtained my own CA and GA DOT, USDOT, broker's authority, IAC authority, freight forwarder's authority, joined IATA and FFA, and got my CSA2010 and IMDG certifications.
Diane and I could do the very same things while also maintaining a lease with FedEx Custom Critical. If we decided to do so, such administrative actions are well within our capabilities and we would have it done in short order. We already have completed five of the items on your list. It would not take much to complete the rest.
I am an independent contractor. Fedex may call you an Independent Contractor, and the IRS or Labor Board may view you as such, but you are in fact only a contractor unless you operate autonomously.
You are splitting hairs to establish a distinction without a difference.
When an independent contractor carpenter contracts to build a house, does he become "only" a contractor because the customer tells him how to build it?
When an own-authority, independent-contractor dump truck owner operator hires onto a construction job, he or she loses his autonomy to the general contractor who tells him where to be, when and where to go and when. Does that reduce the dump truck person to "only" a contractor?
No matter what kind of contractor you are, you always lose autonomy to the customers you serve. It is no different with independent contractors who lease their trucks to FedEx Custom Critical. In that case, FedEx is the customer and, by virtue of the contract FDCC and the independent contractor entered into, the contractor cedes a certain amount of autonomy to the customer.
The IRS recognizes this in its independent contractor definition. Autonomy is not absolute. It is a matter of degree. The trick to maintaining independent contractor status is to maintain enough autonomy in the relationship to satisfy the IRS definition.
For IRS purposes, the term "Independent Contractor" is not split. There is no such thing as a contractor that is different than an independent. There is no such thing as an independent that is different than a contractor. The two words combined -- the phrase -- describes a single entity.
"Independent Contractor" is used as a noun in this context. Your error is made by separating the two words. You are using "independent" as an adjective and "contractor" as a noun. In other contexts, that would be legitimate. But for the purposes of business relationships defined by the IRS, "Independent Contractor" is a noun.
That's the distinction I cling to.
Mistakenly so, as I suggest above.
My word is good as well, and when I agree to a load, it gets done for the price agreed upon and within the agreed upon time frame. EVEN IF it ends up costing me money. I mail, fax, or email invoices for the jobs that I do. I follow up with phone calls and get paid within two weeks. Jobs under 500 miles are given a flat rate. Beyond that range, it's per-mile plus FSC.
I am sure that is true.
I got into the van a few years ago because I saw all the new regulations coming, and I wanted to stay out on the road and have fun getting paid to see the country. I don't like being limited as to how far or where I can go. The van affords me freedom I didn't have in the Peterbilt, or sitting behind a desk coordinating logistics for other people.
In this discussion, let's be careful about blending topics. In your final paragraph you speak about new regulations, type of truck and how freedom is affected by them. Those are different topics than independent contractor.
But since you raise the new regulations and freedom topics, allow me to offer this.
Diane and I entered the business in 2003 and have driven Class 8 straight trucks the entire time. As I think about it, our freedom has been diminished as follows:
- FedEx Custom Critical mandated that our truck be speed limited to 65 mph because of new regulations in Ontario and Quebec.
- FedEx Custom Critical required the installation of the Qualcomm MCP200 in our truck, an electronic logging device. We did not want it and it costs us $5.00 per week more than the unit it replaced.
- With the electronic logs and the ability they give our carrier to more closely monitor the truck, FedEx Custom Critical limited our personal conveyance time tighter than the law permits.
- CSA 2010 came along and later became known as CSA. While CSA is changing the enforcement techniques by using technology in a new way, it did not change the rules that are being enforced. We were compliant before CSA and remain compliant now; thus, the new program did not affect our freedom.
- Security concerns have driven many freedom-limiting changes including longer waits at international border crossings, required TWIC cards, IAC training requirements, required passports, required fingerprinting for HAZMAT endorsements on your CDL, etc. But most of these do not limit your freedom as much as they increase the time and cost of compliance. We remain free to enter and leave Canada. We remain free to haul HAZMAT. It just costs us more time and money to do so.
- For a variety of reasons, truck routes and bridge weights have become more restrictive. Sometimes rules are changed to force us to drive on toll roads we would prefer to avoid.
These are items that come off the top of my head. There are probably more that are not coming to mind at the moment.
Beholden to no one. As I said.
It's a nice slogan but in fact you are beholden to everyone. You don't build your truck yourself or the highways you drive on. If you want to drive safely down the highway, you must follow the same right side or the road rule everyone else does.
You can move into the woods to live off the land, but if you want a gun and some Velcro, a society is required for you to obtain them.
