Shipping freight by truck long-distance has come a very long way since those foundational post WWII decades when the U.S. became manufacturer not only to the world but to millions of American boomers yearning to be free, wanting to consume more of everything in ever farther-flung suburbs.

Hauling U.S. industry’s growing post-war manufacturing and agriculture output meant a growing industry that today moves more than 70% of all the freight, some 10.5 billion tons of freight annually via 3.4 million heavy-duty Class 8 trucks. According to ATA, it takes 3.5 million truck drivers to move it all, and thanks in large part to them, are responsible for generating $726.4 billion in gross freight revenues (primary shipments only) a figure representing 81.5% of the nation’s freight bill in 2015.

http://www.trucking.org/News_and_Information_Reports_Industry_Data.aspx

The Owner-Operator Independent Drivers Association’s OOIDA Foundation does focused research on owner-operators. The group says among those 3.5 million drivers, approximately 350,000 are owner-operators -- however, this group is not as independent as one might suspect; recent statistics say most of these folks (+ 75% or higher) lease to larger carriers and operate under that carriers DOT number.

The number of available, working owner-operators running independent truck-based hauling businesses has been fluctuating over the past few years. And while trucking industry opinion leaders are currently both bullish and bearish on the future prospects for owner operators in the business, most point to a significant decrease in the ranks during the past recession as a harbinger of things to come.

The recession, according to industry observers, put significant downward pressure on freight rates which in turn, significantly cut owner-operator revenues and profitability. The economic environment prompted the industry to shed itself of nearly 25% of independent Authority holders according to OOIDA.

And although the number of owner-operators obtaining their Authority has rebounded to a certain degree (in light of the rising Trump economy and an uptick (finally) in shipping rates), the business model that led to the rise in the number of owner operators prior to 2015 is swiftly losing its economic edge, its financial attractiveness and profitability being impinged upon by a number of factors – with most centering on the rise of the regulatory burden being thrust on all players in the industry.

Figures for the number of drivers transitioning from owning and operating their own rigs and small 2-3 truck fleets to full-time Professional Employee Drivers (PEDs) for an established fleet are elusive, but there is obvious migration, as well as evidence of people leaving the profession altogether because of the costs, complexities and frustrations Federal regulations have placed (some say) disproportionally at the feet of the owner-operator.

Todd Spencer, vice president of the OOIDA cited “government regulations” among the key reasons why the owner-operator “micro carrier” no longer has a viable business model, one that’s both profitable and sustainable over the long run for most players.

Even the staunchest advocates of the owner operator industry have their doubts and most all agree that the realizing any economic benefit to maintaining authority is incredibly tough and getting tougher for even the most experienced and savvy operators.

Even OOIDA’s Spencer recognizes that traditional lease arrangements are no longer serving the interests of owner-operators and that the prospects for positive business outcomes for “fledgling micro carriers” were less than great—of those starting out, fully a third, he says, will fail within the first year and leave the business.

According to Spencer, the CSA program is a primary culprit. The CSA program, he explains, is impacting every motor carrier out there except for the largest. Because shippers will increasingly make decisions on CSA scores, those with only one truck are at a distinct disadvantage because they aren’t inspected frequently enough to create a score in the first place.

Owner-operators as a group are quite vocal and even the most veteran among them are voicing their concerns about the viability of the business model, as well as their recognition that retaining authority a and forwarding a going shipping enterprise with your own truck is growing more expensive and complex every day. Increasingly, it’s a hostile place to go at it as the lone proprietor.

As it stands, on average, owner-operators need to drive more than 100,000 miles a year to net $50,000. That means some make more than $50K a year, but that also means many also make less.

One owner-operator blogger Truckie-D says this to prospective drivers: “Trucking isn’t for everyone. This goes double for being an owner-operator.” He explained that drivers need experience in the trucking business as well as general business experience to be successful.

“Can you read a profit and loss statement and make sense of it? Can you do a cost/benefit analysis of adding an APU to your truck? If the answer is no, you might want to consider getting some basic business education, or at least read a book or two or ten on the subject.”

Word to the wise indeed. He says that if you don’t have experience driving a truck, get hired somewhere, then come back—“Do NOT,” he admonished, “get sucked into getting trained and buying/leasing a truck immediately. That’s a recipe for going broke quickly.”

As an owner-operator Truckie-D says, “Trucking is a whole lot more than just “steering and gearing.” And he reminds all his readers “You’re not buying a truck, you’re buying a business.” Owner-operators have complete liability.

And that is the bottom line isn’t it. But when you own the means of production, not only are you responsible for every aspect of its safe operating performance but the rig has to comply with all regulations and be subject to regular safety audits. One industry source says to keep a truck on the road legally the average annual cost of operating a tractor trailer for one year is approximately $180,000 or $1.38 per mile, depending on the number of miles the truck drives during the period.

What’s left? If you do everything right, and experts say, E-V-E-R-Y T-H-I-N-G, drivers still have to keep ahead of safety technologies and incumbent regulation as well as demonstrate compliance by providing documented proof.

https://www.smart-trucking.com/becoming-an-owner-operator-in-todays-trucking-market.html