George Iacono, vice-president of Global Driver Services, has watched his company and his industry grow steadily over the past 12 years. While growth is good, some of the trends that have become part o...
George Iacono, vice-president of Global Driver Services, has watched his company and his industry grow steadily over the past 12 years. While growth is good, some of the trends that have become part of that growth, leave Iacono worried about the future.
MT. The driver leasing industry has enjoyed steady growth over the past decade, particularly over the past four or five years. Is it growing too fast?
GI: Unfortunately, it’s too easy of an industry to get into. There’s too many “mom and pop” type operations and they give the industry a bad reputation. You’ve got these people just pumping out bodies at real low prices. And another problem related to that is that a lot of these mom and pop operations hire their drivers as subcontractors. So the driver-leasing agency is not paying its payroll burdens and its costs are a lot lower, substantially lower. Twenty plus per cent lower than an agency doing it legitimately. Therefore it can offer the carrier really low rates…But many of these mom and pop operations don’t have a safety supervisor or a driver trainer that road tests and does ongoing training. And the carrier using subcontracted drivers should also worry about what happens if WSIB finds out and decides these people aren’t really subcontractors…In the eyes of the WSIB the only legitimate subcontractors are owner/operators. If the WSIB goes to the driver agency and asks for payment for the last three years worth of assessments and the agency can’t afford it and closes up, the next door they will knock on is the trucking company’s.
MT: Finding quality drivers is clearly essential to your company’s growth so you have an obvious stake in the human resource issues faced by trucking. If you had to put together a recipe for attracting more quality drivers into this industry and keeping them there what would you put into that recipe?
GI: I would first consider the quality of life the guy wants, whether he wants to be a local driver or a highway driver. If you’ve got a highway operation you have to make sure you have minimal downtime, pay an above average per mile rate and even consider paying for down time. Drivers want to be paid for what they are doing. The equipment has got to be good and well maintained. For a local operation it has be a decent hourly pay. I would say a minimum $17+/hour in Ontario. The big thing in both cases is to train dispatchers on how to deal with drivers. There are too many instances where they are treating these guys very poorly and it ends up reflecting in their work.
MT: Considering the price sensitive nature of the trucking industry how do you ensure your drivers are paid well enough to stay?
GI: I like to view us as the human resources department for the fleet we are dealing with. We do wage surveys and show the client what’s going on in the marketplace. We will recommend, based on the type of operation they run, what we feel the driver should be paid. Although an above-average pay rate may at first appear to a client to be too costly it’s going to save them in the long run by reducing turnover. We also try to encourage incentives… I think (the industry’s thinking on wages) is starting to change. Right now the toughest driver to get is a longhaul driver going to the U.S. A couple of years ago most for-hire fleets were paying 28 cents a mile and now they’ve bumped it up to between 36 and 40. They are finally getting in the game but that’s just the start. You can’t pay a guy a good wage and then continue to mistreat him. It has to be all or nothing.
MT:You spearheaded and now maintain your company’s ISO 9002 certification. Looking back on it, have the accrued benefits been worth the investment in time and resources?
GI: We have gained business because of our certification. Probably not as much as we would have hoped and I think that’s reflected in the competitive and price sensitive nature of our business. But looking back I would do it again. ISO forces you to look at every aspect of your business and document how you do things. As you are doing that you begin to question if you really are doing certain things the best way. The big thing I noticed right away is how it tightens up your operation. Employees know the things they have to do and document and how to properly follow up. Most companies get audited once a year; we get audited twice a year. The reason I wanted it that way was so that people wouldn’t let it slip away.
MT:You sit on the board of directors of the Private Motor Truck Council and the Transportation Safety Association and you are active on several committees. Unfortunately many in the trucking industry don’t show that kind of commitment. How can industry associations change that?
GI: That’s a tough one. When companies cut back in allowing their employees to participate in associations strictly because of the cost, to me that’s partly the employee’s fault. They should be making more of a case for being involved. What can the associations do? Maybe they need to look at their rate structures and look at some different packages to get more people involved, such as discounts for associate members or trial memberships.
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