In this hot market, remember to learn while you earn

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In a hot freight market, as we’ve seen for months, ambitious truckers see career move risks tilting in their favor. Company drivers consider opportunities as owner-operators, and leased operators think of striking out under their own authority.

Many have taken that step. As of July, the number of registered carriers with six or fewer trucks had grown 72 percent – 78,624 new fleets – over about six years.

Those numbers were presented by Jeff Tucker, owner and chief executive officer of compliance firm Qualified Carriers and brokerage Tucker Company Worldwide. He spoke at the annual FTR conference, covered by Overdrive Senior Editor James Jaillet.

To be better equipped for steady freight at good rates when the market ebbs, get familiar with the latest market tools and build relationships with key partners.To be better equipped for steady freight at good rates when the market ebbs, get familiar with the latest market tools and build relationships with key partners.

Data gathered by Overdrive sister company RigDig, looking at fleets below 10 trucks, shows particularly strong growth this year. There were 35,617 applicants for operating authority in 2016 and 39,945 in 2017. If the pace for the first half of this year keeps up, new small fleets will top 50,000 in 2018.

However, there’s more to the heat than just a sizzling economy.

“Tools like Truckstop.com give owner-operators data that only the big guys had before,” Tucker said. Such tools “for creditworthiness and collections and speed of pay … are so cheap.”

In our September issue, Senior Editor Todd Dills reported on factoring, where the cost has dropped and the speed of payment has increased. In October in upcoming reporting, dispatch services are covered, which some independents find to be cost-effective partners in negotiating stronger rates with brokers.

Among those thousands of tiny new fleets, such services can be invaluable.

Just as motivated truckers become more entrepreneurial as the economy strengthens, the opposite also holds. During the 2008-09 recession, many independent owner-operators sought a more secure leased arrangement or, as did some leased operators, signed on as company drivers.

When the current surge recedes, it might not create a recession, but there will be some shaking out. Among the newer owner-operator fleets, those most equipped to survive will have adopted tools that enhance their awareness of metrics such as regional load-to-truck and inbound-to-outbound load-post ratios, as well as rate fluctuations in specific lanes. They also will have built relationships with a few key players, whether it’s shippers, brokers, factors, dispatch services or, if they have more than one truck, reliable drivers.

Tucker said for the first time in his 30 years in the industry, he’s seeing that the smallest fleets are easily “able to be profitable.” Those that learn as they prosper also will be more likely to stay profitable when the gravy train has pulled out.

The Business Manual for Owner-Operators
Overdrive editors and ATBS present the industry’s best manual for prospective and committed owner-operators. You’ll find exceptional depth on many issues in the 2021 edition of Partners in Business.
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