Overdrive Staff | April 03, 2011

“There’s a tsunami coming,” Robert Low, president of Prime Inc., said March 15 during a panel discussion at the Truckload Carriers Association annual meeting in San Diego. Low referred to a looming driver shortage that will keep capacity tight and force up rates.

“But what is a higher rate going to do for you if you can’t get a driver?” he asked.

Low and panelists Richard Stocking, president and COO, Swift Transportation, and Kevin Knight, president and CEO of Knight Transportation, agreed the ability to hire qualified drivers is the biggest challenge carriers face. The panel was moderated by Todd Amen, president of financial services firm ATBS.

Factors such as the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program and the possibility of mandatory electronic on-board recorders will further shrink the pool of drivers, panelists said. They also agreed drivers don’t earn enough to compensate them for the difficulties of life on the road. “Drivers need predictability in their lives, in their home time and their paycheck,” Stocking said.

Low and Stocking spoke positively about the long-term viability of using leased owner-operators to meet their capacity needs. The way carriers compensate owner-operators is “a natural incentive program,” Low said. Prime pays 72 percent of a load’s revenue to the owner-operator. “Our philosophy has been that if 72 percent doesn’t produce good earnings for the owner-operator, we don’t need another truck,” he said.

Having “skin in the game” is what drives owner-operators to be successful, panelists said. “They have a business owner mentality, so they run more miles,” said Stocking. Swift leases to about 4,000 owner-operators. They work harder and they watch costs closely, he said.

“Getting the worker to understand the concept of costs in a business is very powerful in terms of running an efficient business,” Low said.

— Linda Longton

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