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Why growing final mile companies need compliance practices that can scale with the business
CLDA Final Mile Fridays with Wendy Greenland, CEO of Openforce
Growth creates opportunity.
More customers. More revenue. New markets. A larger contractor network.
But growth also puts pressure on the systems behind the business. Processes that were easy to manage with a smaller independent contractor network can become much harder to execute consistently as the company scales. Documentation can get missed. Responsibilities can become unclear. And practices that work in one market may not necessarily work in another.
For final mile companies that utilize independent contractors, that creates an important question:
If your contractor model were challenged tomorrow, could you prove that the way you operate supports what’s written in your agreements?
That question was at the center of a recent CLDA Final Mile Fridays conversation between CLDA President Lorena Camargo and Wendy Greenland, CEO of Openforce.
Greenland’s message to carriers was clear: Building a strong independent contractor model is only part of the job. Companies also need the processes, documentation and evidence to demonstrate that the model is being executed consistently.
Many compliance gaps don’t begin with bad intentions.
They begin when business gets busy.
A company wins a new customer. Volume increases. More contractors need to be onboarded quickly. Operations is focused on getting routes covered and meeting customer expectations.
The company may have good policies in place, but the pressure of growth can create a gap between what the policy says and what actually happens.
That distinction matters.
As Greenland explained, companies may build contractor programs with strong processes and good intentions, but those processes have to be followed consistently throughout the organization.
“It’s not enough to say you have a compliant contractor model. You have to be able to prove it.”
For growing companies, that means periodically asking whether the compliance infrastructure behind the contractor program is keeping pace with the size and complexity of the operation.
Growth can also introduce another layer of complexity: geography.
Independent contractor requirements are not necessarily uniform from one market to another. Companies may need to navigate federal worker-classification standards as well as requirements at the state and, in some cases, local level.
A model operating in one state may face different considerations when the company expands into another.
That makes regulatory awareness part of the growth conversation.
Before entering a new market, companies should understand not only whether they can operationally service the business, but also whether different requirements could affect how they structure and manage their contractor relationships.
This is one reason advocacy remains a core pillar of CLDA.
Through CLDA’s advocacy efforts, members have access to the CLDA Legislation Tracker, which helps members follow state and federal legislation the association is monitoring that could impact the customized logistics and delivery industry.
Staying informed gives business owners greater visibility into potential changes and an opportunity to prepare as the legislative landscape evolves.
A signed independent contractor agreement is important.
But it is only one piece of the story.
One of the concepts Greenland emphasized during the conversation was the importance of creating “proof points” throughout the contractor relationship.
Depending on the company’s model and the jurisdictions where it operates, those proof points may include records and documentation that help demonstrate how the contractor relationship actually functions.
The specific requirements will vary, and companies should work with qualified legal and compliance advisors when evaluating their individual programs.
But the broader business principle is straightforward:
Don’t wait until your contractor model is challenged to start looking for the documentation that supports it.
Proof should be created as part of the normal course of business.
That means thinking beyond the initial agreement and looking at the entire contract lifecycle, from onboarding and documentation to insurance requirements and ongoing compliance practices.
The question isn’t simply, Do we have a policy for this?
It’s also, Can we show that we actually follow it?
Technology in final mile logistics is often discussed in terms of efficiency.
Can it make dispatching faster? Improve visibility? Automate administrative work? Help the company scale?
But technology can serve another purpose:
It can help manage risk.
As contractor networks grow, processes that depend heavily on people remembering every step can become difficult to execute consistently.
Technology can help standardize workflows, collect required information, maintain records and create an audit trail. Openforce, for example, describes digital documentation, audit trails and automated workflows as tools for helping companies demonstrate compliance, and contractor separation, throughout the contract lifecycle.
Technology doesn’t replace strong policies, leadership or oversight.
Instead, it can help connect policy with execution.
A company may know exactly what should happen during contractor onboarding. The challenge is making sure the process occurs consistently whether the company is onboarding one contractor, 10 contractors or 100.
For growing final mile businesses, that consistency can become just as important as efficiency.
Independent contractor compliance can sound like an internal issue between a company and its contractors.
It isn’t.
Final mile logistics operates within a larger ecosystem that includes logistics companies, independent contractors, shippers, customers, insurance providers, brokers and other partners.
Customers entrust transportation providers with their products, service commitments and reputations. They want confidence that the companies representing them in the field have appropriate systems and processes in place.
Gaps involving insurance, background checks, motor vehicle records, documentation or other requirements can potentially create exposure that reaches beyond the logistics company itself.
For providers pursuing larger and more sophisticated customers, strong compliance practices can therefore be more than a defensive measure.
They can also demonstrate operational discipline, accountability and professionalism.
Greenland’s most practical recommendation was also one of the simplest:
Conduct an audit.
Don’t assume your contractor program is operating exactly the way it was designed.
Test it.
Select a sample of contractor files and review them as though someone outside your organization was evaluating your program.
Ask:
Greenland shared the example of a company that believed it had built a strong contractor model. When individual contractor files were later reviewed, however, important documentation was missing.
The model itself wasn’t necessarily the problem.
The execution was.
An internal audit gives leadership an opportunity to identify gaps while the business can still address them, rather than discovering those gaps after the contractor model is already under scrutiny.
For companies that want another way to evaluate their current program, Openforce offers an Independent Contractor Self-Defense Audit designed to help companies assess their IC model and identify potential weaknesses. Openforce says participants receive a directional audit score of strong, needs improvement, or requires action after completing the assessment.
For final mile companies using independent contractors, several lessons stand out:
Growth is something final mile companies should pursue and celebrate.
Winning customers, expanding into new markets and creating opportunities for independent contractors can all be signs of a healthy business.
But sustainable growth requires more than increasing revenue or adding volume.
The infrastructure behind the business must grow too.
That includes operations. Technology. Safety. Insurance. Leadership. And compliance.
A contractor model may work extremely well when a company is smaller. As the business expands, however, more people become involved, more contractors enter the network and new markets can introduce additional complexity.
That makes consistency increasingly important.
The question isn’t simply whether the company has good agreements and policies.
It’s whether those policies are reflected in the way the business operates every day, and whether the company has the documentation to demonstrate it.
Because when a contractor model is challenged, what’s written on paper is only part of the story.
The real question is: Can you prove that the way you operate supports what’s on paper, and can you prove the contractor ran their own business?
For growing final mile companies, making sure the answers are yes is part of building a business that is prepared to scale.
CLDA Final Mile Fridays brings together leaders from across the customized logistics and delivery industry to share practical ideas and real-world experience that can help members build stronger businesses and keep moving the final mile forward.
Join us every Friday at 10 a.m. Pacific / 1 p.m. Eastern on LinkedIn for a new conversation.
By Dominick Simone, SVP-Client Services, SCI, LLC.
Recent headlines have once again brought national attention to the ongoing conversation surrounding independent contractors. While much of the media coverage has focused on political personalities and organizations, the larger issue remains unchanged: the future of independent businesses in America.
For those working in transportation, logistics, delivery, construction, and countless other industries, this isn’t a new conversation. For years, lawmakers, regulators, labor organizations, and advocacy groups have debated whether the independent contractor model should remain a viable option for workers and businesses alike. Proposals such as California’s Assembly Bill 5 (AB5), the federal PRO Act, and evolving Department of Labor guidance have all reflected a broader effort to redefine worker classification.
Although individual proposals may come and go, the broader effort to reshape independent contracting continues. That reality serves as an important reminder that the industry must remain engaged.
Independent contractors represent millions of entrepreneurs who have intentionally chosen to operate their own businesses.
Throughout the logistics industry, these professionals provide the flexibility that keeps supply chains moving while creating opportunities for individuals to build successful businesses on their own terms.
Yet uncertainty surrounding worker classification continues to create challenges for both businesses and independent contractors.
Rather than relying on increasingly subjective worker classification standards, many organizations believe the focus should be on creating greater clarity.
That is why SCI actively supports the Freelancer Expense and Tax Relief (FLEX) Act.
The FLEX Act would modernize outdated tax rules by establishing objective standards that help distinguish legitimate independent businesses from traditional employment relationships. Instead of creating additional uncertainty, it provides businesses and independent contractors with clearer expectations while preserving the freedom to operate independently.
SCI believes protecting legitimate independent businesses requires more than responding to new proposals after they emerge. It requires advocating for practical, balanced solutions that recognize today’s workforce and the vital role independent contractors play throughout the American economy.
The headlines may change, but the conversation surrounding independent contractors continues.
As new proposals emerge and debates evolve, SCI will continue supporting policies that promote clarity, consistency, and the long-term success of legitimate independent businesses.
Because preserving the opportunity to work independently isn’t simply about today’s legislation—it’s about protecting entrepreneurship, innovation, and the future of the independent workforce.
Source: Kim Kavin, “The Rise of Megan Romer,” Good Morning, Comrade (Freelance Busting), August 3, 2026. https://www.freelancebusting.com/
By Casie Daugherty, Prime
Prime continues to advocate with the U.S. Congress on adoption of the FLEX Act, primarily focusing on securing sponsors in both the House and Senate. We continue to receive good reception from offices with whom we had discussed previous versions of legislation seeking clarification around the tax status of independent contractors and believe we will be able to secure the support of a Member who serves on the House Ways and Means Committee to lead the effort on our behalf.
The House took the first step today on Reconciliation 3.0 by passing it on a party-line vote out of the House Budget Committee. Notably, they have chosen not to include any tax provisions in the bill, over the public and private objections of Ways and Means Chairman Jason Smith (R-MO). Chairman Smith says that he will continue to push for tax provisions to be included, and has previously threatened not to support the legislation if it doesn’t include such provisions, but so far he has been unable to convince House Leadership. Prime will continue our discussions with Ways and Means leadership to press for FLEX Act inclusion in Reconciliation to be ready if there is a course change on including tax provisions.
By Dominick Simone, SVP-Client Services, SCI, LLC.
The way Americans work has changed dramatically, but many of the federal tax rules governing independent businesses have not. Today, millions of professionals—from consultants and tradespeople to technology specialists, healthcare providers, and delivery contractors—operate successful independent businesses serving multiple clients. Yet they continue to navigate tax rules built for a much different workforce.
One of the biggest challenges under the current system is uncertainty. Worker classification for federal tax purposes often relies on subjective, case-by-case evaluations, making it difficult for businesses and independent contractors to know whether their working relationships will be viewed correctly. Even when businesses act in good faith, they can face audits, penalties, or retroactive tax assessments years later.
That’s why the Freelancer Expense and Tax Relief (FLEX) Act was introduced, and why trade associations for the Final-mile supply chain, like the Customized Logistics and Delivery Association (CLDA) supports its advancement. The independent business economy deserves greater clarity through objective standards that recognize legitimate independent business relationships. Unlike the current system, which relies on subjective interpretations, the FLEX Act establishes clear criteria, including written service agreements, the use of an Employer Identification Number (EIN), the ability to work with multiple clients, control over how services are performed, financial responsibility, and providing the primary tools or equipment needed to perform the work.
By establishing these standards, the FLEX Act would give businesses and independent contractors greater confidence before entering into a working relationship, rather than leaving them to defend their decisions years later during an audit.
The proposal also includes a temporary federal income tax credit for qualifying independent contractors equal to 20% of their self-employment taxes through 2036. Importantly, this credit would not reduce Social Security or Medicare contributions, allowing independent business owners to receive targeted tax relief while preserving the benefits tied to those programs.
Just as importantly, the FLEX Act does not rewrite existing labor laws or change wage-and-hour protections, workers’ compensation requirements, or collective bargaining rights. Its focus is specifically on modernizing federal employment tax administration while maintaining enforcement against fraud and intentional misclassification.
As the independent workforce continues to grow, many believe the tax system should evolve alongside it. The FLEX Act represents an effort to provide clearer rules, reduce unnecessary disputes, and create a more predictable framework for businesses and independent professionals operating in today’s economy.
The FLEX Act provides a practical path toward modernizing federal tax rules for legitimate independent business relationships. Greater clarity and consistency can help reduce unnecessary uncertainty while supporting the businesses and independent contractors that power the logistics and final-mile delivery industry.
If you believe the federal tax code should better reflect today’s independent workforce, now is the time to make your voice heard.
Consider reaching out to your U.S. Senators and Representative to encourage them to learn more about the FLEX Act and the role it could play in providing clearer tax rules for legitimate independent business relationships. Whether you’re an independent contractor, business owner, carrier, broker, or industry stakeholder, your perspective can help policymakers better understand the real-world impact of outdated tax regulations.
Meaningful change begins with informed conversations. By engaging with your elected officials and encouraging support for the FLEX Act, you can help advance efforts to modernize the tax framework for today’s independent workforce and strengthen the future of the transportation and logistics industry.
By Doug Grawe, General Counsel, Openforce
Recent U.S. Supreme Court decisions involving transportation workers have generated significant discussion across the logistics industry. While much of the attention has focused on Montgomery v C.H. Robinson, another case deserves close attention from companies that utilize independent contractors: Flowers Foods, Inc. v. Brock.
For companies in last-mile delivery, courier services, trucking, appliance delivery, medical delivery, and other transportation-related sectors, the decision is an important reminder that arbitration clauses and the contracting process should be evaluated with both state and federal law in mind.
The case centered on Brock, a driver who delivered products for Flowers Foods under an independent contractor arrangement. Brock alleged that he had been misclassified as an independent contractor and sought overtime pay and reimbursement for certain wage deductions.
Flowers Foods wanted to enforce the arbitration provision in Brock’s agreement. The key question before the Supreme Court was whether the arbitration clause was enforceable under the Federal Arbitration Act.
Federal law generally favors arbitration. Arbitration can provide a more efficient, cost-effective, and predictable way to resolve disputes outside of traditional court litigation. In transportation, it can also allow parties to select arbitrators with industry experience, which may be especially useful when disputes involve nuanced industry regulations and operational details.
However, the Federal Arbitration Act does not cover transportation workers engaged in interstate commerce. In Flowers Foods, there was no real dispute that Brock was a transportation worker – he was a delivery driver. The question was whether he was engaged in interstate commerce even though his own deliveries occurred entirely within one state.
The Supreme Court focused not on whether the driver crossed state lines, but on the movement of the goods the driver delivered. In this case, the goods originated outside of the state and were delivered to the distribution center before Brock picked them up and delivered them to retail customers.
If goods originate out of state and continue through a supply chain before reaching their final destination, a worker completing the final in-state delivery may still be considered part of interstate commerce. (The reverse is true as well – a worker completing the first in-state delivery may still be operating in interstate commerce if the goods later are delivered by other providers out of state.)
Because the goods Brock delivered had moved through interstate channels, the Court ruled he was a transportation worker in interstate commerce and therefore the federal arbitration exception applied, meaning Flower Foods’ arbitration provision could not be enforced against Brock under the Federal Arbitration Act.
For transportation companies, this does not mean arbitration clauses are invalid or should be abandoned because even though federal law may not enforce the arbitration clause, state law still may.
The decision is a good reminder to review independent contractor agreements with arbitration provisions, onboarding workflows, contracting processes with a lawyer that knows your operation well. Companies should evaluate whether arbitration clauses are fair, clearly written, and presented in a way that gives independent contractors a meaningful opportunity to review and understand them.
In some jurisdictions, additional requirements may apply, including opt-out opportunities or separate acknowledgments. That makes both the language of the agreement and the process used to present it important.
Ultimately, Flowers Foods reinforces that courts are looking at both contract language and operational reality. For companies relying on independent contractors in transportation, risk management should not be limited to having agreements in place. Those agreements must align with the way the business actually operates.
