Learn these 10 strategies to avoid common – and costly – employee lawsuits in the transportation industry in California.

By Todd R. Wulffson and Denisha P. McKenzie

California is many things, but pro-employer likely is not one that immediately comes to mind. This is particularly true in the transportation industry, where employers face a myriad of regulatory and other legal challenges, in addition to the logistics involved in massive population centers spread out over one of the largest states in the nation. It can be extremely difficult to manage the legal risk exposure and still maintain a profitable business. The following are 10 very common legal pitfalls for employers in the transportation industry in California, and suggestions for how to minimize legal exposure:

Good news for millennials. Supply chain jobs are expected to grow by 25 percent over the next decade, according to the new 2016 Third-Party Logistics Study from Penn State researcher John Langley, Jr.

That presents great career opportunities in a dynamic industry, but the management challenges are even greater. One of the most worrisome is the intensifying shortage of transportation and warehouse workers. The supply chain is already experiencing significant labor shortages and that trend will accelerate as older workers retire. 

The recent acquisition of Con-Way by XPO Logistics – a move that makes XPO North America’s second largest provider of less-than-truckload (LTL) services – is just the latest in a surge of acquisitions in the logistics space. As cash-rich companies both inside and outside the industry continue to buy and sell with what feels like an unprecedented degree of vigor, the value of an experienced and capable third-party logistics provider (3PL) that utilizes a transparent logistics platform is becoming increasingly evident.

In today’s unpredictable marketplace, transparency matters. A commodity model may be increasingly common in the transportation industry, but the role played by freight forwarders, centralized brokers or contractors is more opaque. This means that the customer has little to no idea of the costs and margins involved in transportation and logistics services. That is a liability at any time, but is particularly burdensome during periods of transition before, during and after a merger or acquisition.

Since the enactment of the Fair Labor Standards Act (FLSA) in 1938, the Department of Labor (DOL) and plaintiffs’ attorneys across the country have targeted employers who fail to strictly adhere to the FLSA’s requirement that employees be paid minimum wage and overtime. However, trucking companies have not been a major target for either the DOL or plaintiffs’ attorneys. 

The drive for efficiency in the transportation sector has never been more achievable than it is today, thanks to the rise of data gathered from in-vehicle sensors and GPS navigation and tracking systems. Understanding and reacting to this data in real-time is where opportunity lies, particularly for fleet management.

Data Analytics

The interpretation and analysis of data informs fleet logistics practices and can lead to significant operational efficiencies. The consulting group Accenture estimates that an analytics-informed fleet operations strategy can help to, on average, reduce fleet size by more than 15 percent, reduce maintenance costs by more than 10 percent and achieve fuel savings of more than 8 percent.

As a Canadian business looking to expand distribution, it seems obviously beneficial to start with the United States. The U.S. has over 283 million more citizens than Canada’s 35.2 million, making for abundant opportunity to increase profits and amplify your company’s growth after launching your product there. 

Canada ships an incredible amount of goods to the U.S. each year and in 2013 exports to the U.S. amounted to an incredible $332.1 billion. According to The Office of the United States Trade Representative, that’s a 77 percent increase since 2003. In a 2013 statement, Foreign Affairs, Trade and Development Canada (FATDC) pointed out that the recovering economy in the United States helped to boost the overall demand for Canadian products, marking the fourth consecutive year that saw a significant increase of Canadian exports to the United States.

As the power and potential of new technological tools becomes increasingly evident, more companies are making a concerted effort to use those tools to enhance their supply chain processes.

When utilized correctly, the right technologies can streamline processes, introduce significant new efficiencies, and ultimately bolster the bottom line. An effective transportation technology system should have the capability to track large amounts of targeted data – from freight and fleet status and movements to carbon emission reductions – in order to provide both a high level overview of where supply chain resources are being spent, and a detailed breakdown of granular data that can help avoid or address specific pain points.

As most transport organizations know, the Federal Motor Carrier Safety Administration (FMCSA) will soon publish its final directive for the use of electronic logging devices, also known as the ELD mandate. Basically, an ELD is an electronic version of the paper logbook many over-the-road truck drivers currently use to record a driver’s record of duty status (RODS) and compliance with hours of service (HOS) requirements. Once the mandate is finalized, motor carrier fleets will have until 2017 to install certified ELDs. Fleets already using electronic logging technology of some kind will have until late 2019 to ensure all new specifications are incorporated into their existing technology solutions.

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