TransForce, a major employer of drivers, is broadening its offerings. (Photo: Jim Allen\FreightWaves)
With a new chairman and CEO at the helm, TransForce, which supplies labor solutions that range from training to providing actual workers, is rolling out an expanded key offering.
Rafael Andres Diaz-Granados is the new head of the company. He was most recently the chairman and CEO of ParagonISG, an energy and environmental services company. He will stay on as chairman there. He also had a 15-year career in numerous roles at General Electric.
When the list of the biggest employers in trucking is rattled off, TransForce’s name rarely comes up. But the reality is that many of the drivers it supplies to its clients are actually W-2 employees of TransForce, and their numbers at any given time can be in the thousands.
Diaz-Granados said that its driver count, in any given week or month, generally totals between 2,500 and 4,000 people. But that number isn’t static. Given fluctuations in customer needs and volatility in the driver population, TransForce might employ “tens of thousands” of drivers in a 12-month period.
The basis for the latter number, Diaz-Granados said, is how many drivers are “greenlighted” during the course of a year. Once that process is complete, he said, a driver is ready to take on an assignment with one of TransForce’s customers.
Going from bespoke to a broad market
The core of the new offerings at TransForce is a service it is calling Managed Workforce. Diaz-Granados said in an interview with FreightWaves that Managed Workforce is not entirely new; it’s been a service that it sold to customers on a “bespoke” basis, tailored to fit the needs of a particular customer who would ask for something like it. “We had a very limited number of customers,” he said.
The company is rolling it out to a wider audience, in particular small to medium business, because “the market is asking us to come out there with a different solution, a different offering,” Diaz-Granados said. “It’s not enough for you guys to be a staffing agency and send me somebody. We need a lot more than that.”
TransForce is pushing Managed Workforce as a soup-to-nuts solution, involving managing a company’s needs related to recruiting, onboarding, safety, compliance and the basic TransForce role of putting a body in a driver’s seat.
Diaz-Granados described it as a “strategic partnership” set up under a long-term contract. “And it’s really kind of letting the customer stop worrying about their driver population,” he added. It has the benefit of keeping drivers “engaged,” he said, because they can have more stability servicing a company utilizing the Managed Workforce offering than jumping around among TransForce clients. “When we’re changing them from job to job, that can sometimes be a little bit difficult.” That can involve time “sitting on the bench,” he said, which could be diminished if they are sticking with a small number of Managed Workforce clients.
TransForce drivers, who get W-2 tax statements as full-time workers rather than 1099 forms sent to contractors – do receive a package of benefits through their employment with the company.
“That is one of the reasons why partnering with us in a Managed Workforce capacity can make a lot of sense, because we can actually enhance the attractiveness of those jobs by being able to offer these kinds of added services and benefits to the driver,” said Kelly McGurk, TransForce’s vice president of revenue marketing who sat in on the interview with Diaz-Granados.
A subset of those drivers are employed into dedicated managed workforce solutions where they work for a longer term: about six months a year or longer. Diaz-Granados said that would account for about half of TransForce drivers. “That segment tends not to rotate too quickly,” he said.
Another key activity is the “flex” segment within TransForce, which is “really solving for very specific in-the-moment issues that our carrier customers might have.” By definition, those assignments are less than six months, Diaz-Granados said, and could be as short as a week or two or even a few hours.
Making its pitch to drivers to sign up
Even in a market where by all accounts driver availability has loosened significantly from where it was in 2021 and much of 2022, TransForce needs to make a marketing push to drivers to sign up with them, rather than taking other options: owner-operator, owner-operator on a lease with a company, or company driver. Diaz-Granados was asked: What’s the sales pitch to be a TransForce driver rather than pursuing one of those other choices?
“We tend to see a fairly wide variety of jobs,” he said. “And one of the things that can happen, and we have seen multiple examples of this, is that, let’s say you need a job tomorrow. But the job that you really want isn’t available in the market at that particular moment. You can come take a job with us. You can become part of the TransForce family, and you can daisy chain from job to job. Eventually you may find that job that you really do want.”
He also said TransForce is often selected by clients to fill out the roster of new driving jobs at a facility that the customer is opening. If somebody wants to get one of those jobs, “the only way to do it is through TransForce. They aren’t being advertised directly by the company,” Diaz-Granados said.
Given the sheer number of drivers TransForce needs to employ at any given time, and even more so over the course of 12 months, the company does have a perspective on the strength of the driver market that not many companies can match. But Diaz-Granados’ views on the driver market are not unique: a fairly standard blend of market weakness and signs of a possible turnaround.
“We’re starting to see some of that overcapacity finally come out of the market,” he said. But he added that the company is not just waiting for a return to a driver squeeze to send potential clients running to TransForce. “What we’re trying to do is create the type of value propositions where we can go talk to customers almost independent of what’s happening in the broader macro environment.”
What it sees with AB5 in California
Given that the drivers at TransForce are W-2 employees, it was one of the first companies that publicly rolled out a potential solution to California fleets that in 2022 suddenly needed to stare down the barrel of AB5, the state’s independent contractor law. The law’s structure is designed to make it more difficult to hire an independent contractor and instead push companies toward turning those workers into employees – in other words, make them W-2 employees rather than sending them a 1099.
What TransForce offered is known as the “two-check solution,” called that because the driver gets a check from TransForce for driving services rendered and a second from the carrier for leasing his or her truck. Two-check drivers are employed by TransForce but are set up to drive for the carrier with status equivalent to that of a pre-AB5 independent contractor relationship.
What’s notable about AB5 enforcement in California trucking is how quiet the landscape has been. If the state has taken any actions against a trucking company for its conclusion that an employer was violating AB5, it hasn’t been publicized. California trucking officials have made the same comment.
With TransForce on the ground in the Golden State with its solution early in the game, Diaz-Granados has a perspective on the law that by now is almost 3 years old, given that the company began touting the “two-check solution” soon after the U.S. Supreme Court declined to hear an appeal from the California Trucking Association and AB5 went into effect for trucking.
He said that solution “is actually working really well. … It’s been a pretty successful offering.”
But he cautioned that the lack of visible enforcement may be masking some signs that state audits of trucking companies’ compliance with AB5 reportedly may be picking up speed.
