Struggling but surviving

| September 29, 2009

The demise of the owner-operator has been a hot topic for more than 30 years, says Overdrive Trucker of the Year Steve Brosnan. “Every time I hear it – that the owner-operator will be extinct – I chuckle,” he says.

His trucking mentor Lonni Bryant heard the same thing in the 1970s when industry watchers were predicting a wave of large-fleet consolidation and fuel shocks would shut small-business truckers out of the industry. Brosnan bought his first truck in 1979 during nationwide owner-operator shutdowns. “I thought it was a hell of a bad time to buy a truck,” though he says he wouldn’t trade the decision for anything.

That love of the industry is one key to owner-operators’ survival, says Dart Transit’s in-house legal counsel Doug Grawe. “There are so many out there that really do want to be owner-operators.”

While barriers to achieving or maintaining independence in the current downturn may be many, they are also temporary, contrary to naysayers. In every economic cycle the owner-operator sector “contracts with everyone else,” says Jay Thompson, president of Transportation Business Associates, a fleet consulting firm. “We hear more noise about them because they are individual voices, as opposed to fleets that go away with little fanfare. The numbers tell the real story.”

For those who hang on, the prevailing view is that the down cycle in the wider economy will give way to recovery, as it always has. And small business truckers once again will prove wrong the following myths that predict their demise.

In Overdrive’s 35th Anniversary issue of September 1996, Truckload Carriers Association (then named Interstate Truckload Carriers Conference) President Lana Batts predicted greater consolidation among large truckload carriers. She also foresaw industry-wide gains coming through increasing utilization and a great deal of opportunity for owner-operators.

In 1996, recalls Batts, “the prospects for the owner-operator were bright. Today, they’re really kind of flat on their back.” Utilization rates are down. Particularly since 2003, as diesel prices began climbing, shippers moved cross-country freight to rail and away from the dominant long-haul trucking industry.

The average length of truck haul decreased. The Overdrive Owner-Operator Market Behavior Report since 2004 has tracked a 10 percent decline in the share of owner-operators with average hauls of 500 or more miles and a concurrent 10 percent rise in the share of owner-operators with average lengths of haul of 200 or fewer miles.

Long-haul might be on the wane, but it doesn’t mean it will go away. And even as it diminishes, does that deny opportunity for owner-operators? Absolutely not, Roger Knox says.

He runs containers full of Goodyear tires from Lawton, Okla., to a Dallas railhead and takes empties back. His 2003 Peterbilt 387 is leased to Dallas-based Rhino Transportation, a 40-50-truck fleet of mostly owner-operators.

Knox says an owner-operator moving to an intermodal short-haul operation from a high-paying long-haul gig might have to recalibrate his approach to business. Knox grosses just 92 cents a mile, loaded and empty (plus a fuel surcharge), but his expenses are lower.
“You don’t have to have a $150,000 tractor to do this,” he says. Instead, maximize uptime in an older truck with the convenience of being at or near home most days for solid maintenance and breakdown-service connections.

Local opportunities exist – and will continue to – for independents and small fleets, says Commercial Motor Vehicle Consulting’s Chris Brady, author of the annual Overdrive report. “I don’t think construction and building companies want to invest in transportation equipment,” he says. “Now, I don’t think you’ll see owner-operators driving mixers. But in dump applications and others where they can haul different commodities, where there’s flexibility in the system, they’ll definitely grow.”

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