How Worker Demands are Changing the Transportation Industry
By: David A. Napper and Neil A. Eddington
April 24, 2016
Total Transportation Services, Inc. (“TTSI”), a prominent drayage hauler out of the Los Angeles and Long Beach ports, recently filed for Chapter 11 bankruptcy. The bankruptcy filing is the direct result of workers’ demands for employee designation.1
For many years, drayage hauling – the short-distance transport of goods from local ports –functioned primarily through an “owner-operator” business model where drivers contracted to perform services using trucks they either own or lease. As a result, the drivers had always been characterized as independent contractors not employees. However, in 2010, after the IRS ruled a single TTSI driver was an employee, other TTSI drivers began to resist the model, filing their own suits to garner employee designation.2 For companies like TTSI, litigation expenses have piled up and led to bankruptcy; for the drayage hauling industry, the viability of its business model is in doubt.