Independent contractors (ICs) are the heart of this country’s supply chain and without them, businesses that provide responsive service will be unable to meet their customer’s needs. ICs are the key to meeting fluctuating customer demand. But constant assaults in Congress on the very idea of using ICs in business seem to be in fashion. This threatens almost every industry in this country and the commerce they support.
Without ICs many businesses would not be able to adequately respond to what the marketplace demands – quick, customized and flexible solutions. The loss of the IC model in my industry, for example, would cripple such diverse sectors as same-day and expedited delivery, US Postal Service rural route and Express Mail delivery.
The ability to use ICs is critical in the same-day customized logistics and delivery industry. We are an integral part of the American economy, providing transportation of packages, medical supplies, bulk materials and documents among businesses and corporations in the United States and beyond. Owner-operators pick up and deliver important business documents or packages that need to be sent or received quickly either locally, regionally or nationally. They also deliver items that the customer is unwilling to entrust to other means of delivery because they are either time-sensitive or require specialized individual handling, including machine parts, medical supplies, blood and organs for transplant.
What distinguishes customized logistics and delivery companies from other components in the delivery supply chain is our emphasis on less than 24 hour, just-in-time delivery of packages in response to customer demand. The pillar of that ability is the independent contractor.
During the immediate aftermath of Super Storm Sandy, owner-operators were the ones making the pharmaceutical deliveries that many individuals relied on in New Jersey. While larger companies were closed down for as much as three days trying to reorganize, local ICs were the ones making the life-saving deliveries.
Our industry has great concerns over the legislation that has been introduced in the Senate and House of Representatives in previous Congresses on classification of independent contractors. Legislation to eliminate the safe harbor provision found in Section 530 of the Internal Revenue Code in particular is very troubling to our industry. The intention of these bills may be to curtail intentional misclassification by those companies or even industries. However, the reality is that these bills will affect all companies using independent contractors, including those that apply rigorous standards compliant with federal, state and local regulations.
The majority of the legislation introduced over the last few years has focused on the rights of a misclassified worker, but it has never extended to the right of an individual who chooses to operate as an independent contractor.
We urge legislators to proceed cautiously with this issue. It has the potential to devastate our industry causing a ripple effect to others dedicated to responsiveness of customer demands.
The customized logistics and delivery industry is a critical part of the national and global supply chain. People in our industry are saving lives daily and improving the health and well being of our citizens. The most important deliveries - including financial transactions, critical machine parts, lab reports and lifesaving medications - are performed by independent contractors working for more than five thousand small courier companies. For more than 100 years, our industry has been served by a business model that is a great example of the American Dream. Our independent contractors work hard, follows the rules and provide efficient, flexible services that cannot be duplicated.
We recommend that any future legislation consider how it will impact our industry as the others that depend up one core component: the independent contractor.
MacKrell is immediate past president of the Customized Logistics and Delivery Association.