SNDR - Scopelitis Seminar Delves Into Lease Purchase Deals M&A ESG and More | Benzinga
Here are five takeaways from the multitude of subjects the seminar covered.
The growing focus on lease purchase agreements
The ongoing task force created by the Federal Motor Carrier Safety Administration to study — investigate? — lease purchase agreements had a recent and largely negative moment in the sun with a public hearing at the Mid-America Trucking Show. Sentiment from panelists at the current Scopelitis seminar has so far not generally been supportive of the contracts, which are seen as either a pathway to truck ownership or an oppressive way fleets secure capacity from drivers who need to work endlessly to stay afloat.
Jeffrey S. Jackson, a Scopelitis partner, said in a short presentation that the deals are "very, very common in the industry for sure, although it's not nearly as common for them to be handled correctly."
"Oftentimes, folks will see lease purchase programs as kind of an automatically safe way to create more and more operators" Jackson said. "But the truth is really much more complex than that." As far as a method of securing capacity, Jackson described lease purchase deals as "not an answer." Rather, they are a "potential business solution" to recruitment challenges.
Jackson said the focus for fleets should be to avoid getting situations where the lease purchase deal results in a misclassification action against them either by a government agency or in a lawsuit by a disgruntled driver. One suggestion: A fleet should not do its own lease purchase deals. It should hire a third-party provider of the contractual arrangement.
The big orange company doesn't see a driver shortage
A notable moment came during a fireside chat at Monday's lunch session. Chris Spear, president of the American Trucking Associations, sat next to Thomas Jackson, general counsel of Schneider National (NYSE: SNDR). Spear and the ATA have been the loudest promoters of the view that there is a driver shortage.
But Jackson begged to differ. "We don't see ...