OTL creates Central States Delivery, our master contractor company
A major change at On Time Logistics has made it easier to manage our workforce, which includes both employees of OTL and independent contract couriers.
We have used contract couriers since our inception in 2007, but in recent months created a new company that serves as a subsidiary and master contractor for On Time Logistics. Central States Delivery is now a subsidiary of On Time Logistics and OTL contracts with the separate entity for all its courier work in Northwest Arkansas, Little Rock, and Tulsa. OTL continues to be the employer of record for the last mile delivery drivers, who are employees of the company. We currently have 35 employees and 18 independent contractors.
An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes, but they also can set their own hours and decide their own workload. The IRS has strict rules about how couriers are treated, paid, and reported compared to traditional employees.
We’ve always been very careful to make sure we were following the rules but decided to create this separate company to even better distinguish the difference between our contract couriers and our delivery drivers who are employees. This new company just makes all the legal definitions even more clear.
OTL started as a courier service company but as the electronic age took over, the need for last mile delivery and warehousing services overshadowed the courier needs for several years.
The tide is changing once again, however, and the courier service business is also seeing an increase. This time, instead of being a largely business-to-business service, OTL is seeing more business-to-consumer business as well as courier deliveries between different campuses within the same company. Transferring medical records between different clinics in the same hospital system, for example. We are also using contract couriers more frequently to make small-item, last mile deliveries to residential customers, especially in Little Rock.
While we do not see last mile delivery slowing down any time soon, we are seeing a noticeable return of demand for courier services, especially in our Northwest Arkansas and Little Rock markets. Research and conversations that we’ve had with counterparts from other parts of the country concur that this is not an anomaly.