The Owner-Operator Independent Drivers Association Foundation (OOFI) late in 2023 conducted a pair of surveys with its membership to gauge the impacts of two major issues for owner-operators -- detention time and freight rates.
Both surveys were sent out to OOIDA members in December. They had through the end of the year to participate.
Dealing with detention: Time is money
The 27-question detention time survey was sent to 18,788 members and received 253 total responses. The highest number of respondents (35%) identified as owner-operators with their own authority, while 34% lease their truck on with a carrier. Another 17% listed themselves as company drivers.
Respondents were predominately in long-haul (501+ miles), truckload operations running in North Central, South Central, and Southeast regions of the United States. Most pulled dry van, flatbed, or reefer trailers.
OOFI’s survey found two factors making detention time negatively impactful for owners and drivers:
- Method of driver compensation, as very few receive pay for all hours worked
- Hours of service regulations
According to survey results, 83% of respondents utilize the 70-hour/8-day hours of service rule, with the remaining 17% operating under the 60-hour/7-day rule. The chart below shows respondents' estimates of weekly time spent waiting to load/unload.
While a majority of those under both the 60-hour rule and the 70-hour rule spend between 0 and 2 hours each week waiting to have their truck loaded, and another 0 to 2 hours waiting to have their truck unloaded, OOFI found, the average weekly wait time for loading is 7.2 hours, and the average weekly wait time for unloading is 7.1 hours, for a total of 14.3 hours.All graphs courtesy the OOIDA Foundation
Members who are complying with the 60-hour rule spend on average 24% of their possible compensated drive time in detention, 20% for those under the 70-hour rule.
OOFI believed this “can ultimately create the incentive for drivers to operate longer and push harder," skipping breaks and/or just not pausing when tired. That's "in order to make up for lost compensation and prevent the domino effect of missed deadlines leading to lost loads. It can force drivers to park in unsafe and/or unsecure locations if they run out of hours and are no longer allowed to legally drive while also not being allowed to legally park.”
While trucking generally defines detention as any time spent waiting beyond two hours, surveyed OOIDA members presented variations on the theme. Some defined the terms as anything in excess of half an hour to an hour, or all time spent at a pick-up or delivery location, including when their truck first entered the yard.
Some surveyed drivers described detention in general as lost revenue or stolen time that is difficult to plan for, OOFI added.
[Related: Turn up the heat on detention: How truckers can calculate a fair rate to compensate for delays]
The survey also asked drivers what they thought to be the best method for tracking detention time. Many indicated that electronic logging devices work well for the purpose. “For not only do ELDs electronically record a driver’s record-of-duty status, but they are also required to track the geographic location of the truck,” OOFI said. Both “could be utilized to measure and verify the time a driver spends waiting to load or unload.”
How often survey respondents attempt to collect compensation for detention time
49% of the OOFI survey respondents indicated that they always attempt to receive compensation for detention time.
To address detention time, survey respondents flagged proper planning coupled with cooperation with shippers/receivers to more effectively honor appointment times. Others said carriers and drivers either need to push for and demand detention compensation in their contracts/rate agreements, or quit doing business with the worst offenders altogether. Shippers and receivers “need to be held accountable,” respondents said, and should “pay the driver directly” instead of a broker, “increase their labor force, and schedule realistic pickup and delivery appointments and honor them.”
Most respondents said they believed shippers, receivers and brokers wouldn’t honor detention time pay unless they were incentivized to do so, whether by a federally-mandated fine or by contracting with other brokers, shippers, and receivers who will ensure detention pay.
[Related: Demand detention improvement -- high time for action from all industry quarters]
Detention's downstream impact: Loads reported lost weekly after delays
Half of owner-operators responding to the survey reported losing one to two loads a week because of detention time. Another 10% reported losing three to four loads a week because of time spent at shippers and receivers.
Read the full results of the OOIDA Foundation's detention time study here.
Fickle freight: Owners' outlook for 2024 after 2023's negative outcomes
The OOIDA Foundation's 29-question freight rate survey was sent to 23,869 OOIDA members and received 189 total responses. Survey respondents were comprised almost entirely of owner-operators (76%), with a small segment of company drivers (7%) and mostly-small fleet owners (15%).
General freight was hauled most commonly by respondents, regardless of operational type or business model, followed by refrigerated freight. The vast majority indicated they ran long-haul (average haul more than 500 miles) or regional, which OOFI defined as 150-500 miles.
Surveyed owner-operators with their own authority received the highest average compensation rate both per-trip ($1,661) and per-mile ($2.50). Those rates fell respectively by 35% and 15% from 2022, though still higher than in 2019 before the pandemic, OOFI found.
Company driver compensation came in at an average 64 cents per mile, representing an 11%, or 8-cents-per-mile, fall from 2022. This was one penny higher than pre-pandemic levels.
OOIDA members responding to the survey who pull dry van trailers clocked a 37% rates decrease per-trip, 23% per-mile. Flatbedders experienced a 23% reduction per-trip (2% per-mile), and reefer haulers saw an astounding 51% drop in trip rates, with a 6% decline per-mile.
Average rates reported by survey respondents
Overall, reported rates per mile decreased 18% from $2.56 in 2022 to $2.09 in 2023, while per-trip rates declined 37% from $2,390 to $1,511.
The survey found 57% of fleet owners obtain the majority of their freight through direct contracts, with 46% utilizing brokers (the survey allowed for multiple responses). For owner-operators with authority, 45% obtain the majority of their loads from brokers, and 35% from direct contracts.
When asked how they determine rates, several owners with authority noted utilizing region, state, and seasonal information, including reviewing their past cost of operations. Various economic data -- freight volumes coming out of a specific destination and DAT’s 15-day rate view -- also figured into the rates equation for owners.
[Related: Broker margins, rates data, transparency: What owner-operators really think]
Some respondents reported establishing a kind of break-even -- the minimum price per mile they need in order cover their operating costs, including fuel, insurance, tolls, truck payments, etc., as well as paying themselves, OOFI found.
The average reported cost per mile was $2.11 for those under their own authority, $1.81 for leased owners, and $2.58 for fleet owners. Those cost figures marked a significant fall from 2022, with the exception for fleet owner OOIDA members who saw a 4% increase. The average operating cost per mile dropped 13%, from $2.38 per mile in 2022 to $2.08 per mile in 2023.
It pays to know your costs, too, OOFI found.
Average compensation rates higher for those who know their costs
OOFI found that owner-operators who know their costs earned 67 cents per mile more than those who don't. The per-trip premium calculated to $715 more.
[Related: Truckers' New Year's Resolutions: Get closer to the freight source, and back to basics on costs]
Almost half (49%) of survey respondents forecasted worsening prospects for 2024. This was especially true for those leased to a carrier, those who pull a flatbed, and those on dedicated routes.
Negative views for the coming year stemmed from worries over, largely, high operating costs, broker fraud, and too little demand for the amount of capacity still in the market, OOFI said. Those who held a more positive view saw inflation and fuel prices coming down and helping spur growth and reduce costs.
Several owner-operators with their own authority expressed a desire to retire or to forgo authority for the time being and lease to another carrier, or even to sell the truck and change careers altogether. Others commented that they are considering changing up their equipment or running less equipment, operating more regionally or in different lanes, attempting to network more and establish direct contracts with shippers, even park the truck until the market improves.
Rates, load volumes forecast in decline
Owner-operators reported decreasing freight rates and fewer loads available going into 2024. Load availability was worse for those who use brokers than working directly with shippers and leased to motor carriers.
Many leased owners reported active prospecting for another carrier, or moves to select loads more carefully, with few looking to get out of the business.
[Related: How owner-operators can avoid joining the 'capacity reduction' ranks]
Regardless of operational type, however, many respondents pledged to increase business efficiency, whether through more freight-market research, changing lanes or regions, being more selective of routes, becoming more specialized, or simply reducing expenses and deadhead miles by operating fewer trucks.
Read the full results of the OOIDA Foundation's freight rate survey here.
Owners looking for additional detention advice and freight-rates insight can find it in the "Going Independent" (pictured) and "Choosing a Carrier" chapters of the Partners in Business handbook for owner-operator business, start to finish, sponsored this year by the Rush Truck Centers 150-plus full-service dealership network. The Overdrive/ATBS-coproduced "Partners in Business" book for new and established owner-operators is a comprehensive guide to running a small trucking business. Click here to download the latest edition of Partners in Business free of charge. Join Overdrive and ATBS March 22, 2024, at the Mid-America Trucking Show for the annual Partners in Business seminar, benchmarking owner-operator performance of recent history, this year with a focus on "Owner-operator survival strategies, and tactics to thrive, in a down market." Find more detail about the session at this link.
