Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/305892
PULSE May 2014 | Overdrive | 7 By Max Heine Editorial director mheine@randallreilly.com T here are countless fleets, big and small, that can trace their roots to an owner-operator who saved his money, gulped hard and bought a second truck. It's the American dream: The sky's the limit for someone with smarts and a strong work ethic. That scenario lives on in trucking, though it might not be as alive and well as it used to be. Overdrive's annual population studies of for-hire owner-operator businesses where the owner still drives show that the average fleet size was 1.66 trucks in 2001, before the '01 recession set in. Since the more recent recession, there's been a steady decline – from 1.56 in 2008 to 1.40 in 2013. "Fleet size is decreasing as individuals estab- lish owner-operator trucking businesses that are typically one-unit fleets," says Chris Brady, head of Commercial Motor Vehicle Consulting, which conducts Overdrive's study. Most of the new establishments are leased operations. Since the populations of leased and independent operators bottomed out in 2010, independents grew by only 6,200 (11 percent), while leased operators grew by 15,300 (16 percent). Will average owner-operator fleet size ever get back to the 2001 level of 1.66? Brady believes it could. That's assuming freight demand increases enough, and assuming that demand translates into rates strong enough for owner-operators to afford additional trucks. Others think structural changes in the industry weigh too heavily against expansion. An Overdrive poll in late 2013 showed half of our readers believe such changes have made it more difficult to get your operating authority and be profitable. Industry changes since 2001 have indeed made it tough on small-fleet owners. Round after round of emissions regulations have accelerated the rise of new equipment costs. The reluctance of lenders to finance additional owner-operator trucks following the recession probably has contributed to the shrinking fleet ratio, says Todd Amen, head of financial services provider ATBS. "But I do hear money is coming back into the business, and they will start financing second trucks," he says. Moving beyond a solo opera- tion always was fraught with the hassles of becoming an employ- er. That transition is even more of a head-banger now with the Compliance, Safety, Account- ability program. As Overdrive's Todd Dills has documented, under CSA independents carry the most risk of being inspected and put out of service. Even with such hurdles, ambitious operators will see opportunities in an ongoing recovery. If you're one of them, prepare well, especially if you're getting your authority. Save a sizable fund. Find stable, dedicated shippers. Don't cut corners on hiring a good driver. Learn about all the regulatory issues you'll face. It's hard work keeping the dream alive. For an online tutorial about this, visit OverdriveOnline.com/betheboss to see three installments from Todd Dills' January cover story. They address getting your authority, as well as 14 critical compliance duties for an independent. Fading dream? '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 1.70 1.60 1.50 1.40 1.30 CMVC Average owner-operator fleet size FROM RULE'S PUBLIC DOCKET Alan Moore of Blackfoot, Ind., believes the agency "may have the rule right this time," he noted, referring to FMCSA's previous attempts that were vacated, most recently in 2011, when a federal court threw out the electronic on- board recorder limited mandate due to concerns over the devices' ability to be used to harass driv- ers. "We need something done about the cowboys who are left to run however they please." Brock Girling: "It's about time the electronic log became mandatory." Warren Smith of Gatesville, Texas: "Thanks for putting small trucking companies out of business. I am struggling to make payments on trucks and trailers now without the additional ex- penses of the federal government. I am a two-truck operation, and I work hard at keeping up with all of the compliance regs now. I feel you are going to be hurting this country more than helping it, be- cause having to pass on the cost of this — everyone will suffer." Sean Adams of St. Joseph, Minn., suggested mandatory use of the devices be targeted at companies with poor CSA scores. Otherwise, ELD use should be up to carriers, rather than an industrywide requirement: "Drivers don't like to be watched, just like anyone would not like their boss or su- pervisor watching and question- ing their every move." Martin Sulak of Waco, Texas: "I guess what the FMCSA wants is to run the independent drivers/ owners out of business! You have so many regs now, it's funny! What we need is a housecleaning in Washington with some people who have some common sense!" Voices_0514.indd 7 4/30/14 3:10 PM