The Domino-Effect – Don’t Get Caught

By Lina Demedieros

Well, it’s no secret, when the government feels the pinch. Those above the law (the government) will speak and implement change. You say NO WAY, they can’t do that. Oh yes they can, it’s called the domino-effect. It happened in the construction industry and will happen in the transportation industry if you don’t take care of “number one”, yourself.

The domino-effect occurs when the transportation industry simply does not exercise the 3 C’s; Contracting, Compliance and Continuing Education. The profound impact of these 3 C’s actually impact Profitability and Driver Retention which in turn impacts those above the law.

A tremendous amount of financial resources are used to maintain equipment while overlooking the “number one” resource that can not only build business but also outlast any piece of equipment; human resources. As a result, there has been an exodus of approximately 31% of drivers in Canada.

I have been an advisor in the insurance industry for over 25 years as well as a former Fleet Underwriter and Broker on both the General and Life & Accident Sickness industry. I found that as a result of overlooking the most important commodity “human resources” and exercising the 3 C’s, the industry on a whole has been faced with increased operating costs with the following sectors being dramatically impacted:

Sector	Benefit	Impact
Provincial Government	Health Care	Loss of Revenue, Increased Costs no accountability from private sector.
Federal Gov’t	CPP, Employment Insurance, Taxes	Administrative Costs-Costs kept at bay as a result of definitions and limitations. Taxes-loss of revenues due to poor planning.
Private	Workplace Safety & Insurance Board	Loss of Revenue via sales of alternatives to WSIB. Minimum amounts of coverage purchased.
General Insurance (Fleet Insurance)	Statutory Accident Benefits, Employer Liability, Liability, Umbrella policies.	Increased Operating Costs to Transport Company in turn Owner Operator
Life & Accident Insurance	Loss of Income	Limited Markets for Long Term Disability Coverage. Due to limited knowledge.
Private Sector Owner Operators	Compensation	Lost Revenue-Increased Operating Costs, Compliance etc.

Lost Revenue-Increased Operating Costs, Compliance etc.How can you make a difference? Simply by take the initiative to learn. Find out what your overall risk exposure is and if it is profitable. If you’re not satisfied, make the necessary changes.

Driving is a profession that requires a tremendous amount of skill, awareness and tolerance. The industry and the professional community understand that you focus on what will benefit the average consumer as a result of your love to drive your truck and provide an income for your family. However, when you overlook some of the important aspects of your business such as protecting your earnings and protecting your family, those “above the law” will make the decision for you. Why, you ask? Well, the impact is on profitability for your partners who keep you in business, the transport company by getting the contracts, negotiating the insurance, buy down insurance etc.

When the government audits transport companies who employ many of your services, they often complain about loss of revenue. This loss of revenue is a result of either not filing tax returns or filing low net taxable incomes, which impacts every level of government. Once they see a decrease in revenues, increase of expenditure in sectors such as health care, legislated programs like WSIB (Workers Safety Insurance Board), they will mandate something that you really don’t want. If revenues are not coming in via any one sector they will be looking to replace those revenues and what better way than to re-group and restructure and get those revenues that are required to feed those under funded levels of government. You must stand and be counted for.

In my last article I spoke about the importance of illness coverage. The Workplace Safety and Insurance Board covers only occupational injuries plus Illness coverage and extends health care coverage to address any expenses incurred while you are recovering from your injuries sustained at work. The Alternatives to WSIB offer you much more flexibility and allow you to budget your overall expenses. Just consider some of the coverage you currently do have in force such as spousal health care coverage, individual life, and treatment from your choice of physician and increased or decreased insurance costs.

Whatever you do when talking about alternatives to WSIB, don’t kid yourself and buy coverage that you know will not adequately protect you. You are only cheating yourself and cheating the system that will later have an impact on you.

As an Owner Operator you are the most important resource to a transport company. Be sure to talk to your peers and the transport company you work with. Compliance and due diligence by a professional advisor specializing in the transportation market not only protects you but also the transport carrier and builds your relationship with the carrier rather than making it a negative relationship.

Make a difference and avoid the domino-effect.

For more information call Lina M. Demedeiros, Living Benefits Specialist at 1-800-236-5810.

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