Trucking

The Owner-Operator Shift

Sam Tibbs

Data Science, CloudTrucks

Share

Table of Contents

If you have paid attention over the last few years you have very likely noticed the large increase in the number of motor carrier authorities. The vast majority of this increase is by Owner Operators (OOs) and small fleets with 5 Power Units or less. It is likely you know someone who has recently become an independent OO or started their own fleet. To highlight the magnitude of that growth, the graph below reports the number of new authorities on a monthly basis, note the graph attempts to isolate Dry Van and Refrigerated Carriers1.

As you can see during 2015 and 2016 OOs and small fleets were only adding an average of 1,400 new authorities every month, that number doubled to 2,800 during the strong 2018 market, then in early 2020 it took off to the point where they increased 11,100 per month in 2021 and for the first 3 months of 2022 there has been an average of 9,800 per month. Note most of these aren’t new trucks entering the market and causing downward pressure on rates, instead it is a transition to more OOs and small fleets. And that transition was so strong in 2021 that FTR estimates “there has been about a 4% market shift from carriers with > 100 trucks to carriers with <= 100 trucks in terms of drivers and trucks from March 2020 to December 2021.”2


So why this huge change in trucking company size? There really are two main reasons, first is that during that time period there has been a large increase in spot market activity and rates, and yes, spot rates have dropped from their highs, but that doesn’t change the fact that a transformation is happening. The second reason, the transformative reason, is that there is more and more technology in place that allows OOs and small fleets to have access to what was previously only available to the megafleets. Dan Lewis, the CEO/Co-Founder of Convoy, has even noted this by saying that thanks to technology a robust healthy network of trucks provides a higher quality of service than a dedicated fleet3. Therefore, the information and operational gap between OOs and megafleets has shrunk dramatically, and I would argue that before long OOs will lead. Why?

Two main reasons, first, again, is that technology is leveling the playing field, allowing OOs and small fleets to have all the information and data advantages that used to only be available to the megafleets (this is where CloudTrucks comes in). To explain the second reason (which is where you come in), I’ll start with a question. Have you ever walked into a business and immediately been able to tell who the owner was? You see them running the show, proudly and efficiently getting done what needs to get done. Their motivation and their work ethic, that is the second reason. Take a megafleet driver that is told where to go and when to go home, how do you think their motivation compares to a non-force dispatch OO. The non-force dispatch OO making their schedule will commonly drive 10 hours a day doing their job, whereas a megafleet driver may be doing 7 hours a day. The independent OO is all about getting the job done, quickly and safely, on the loads they choose, then getting back home to family, on their terms. Megafleet drivers are simply not given the freedom or the tools to directly benefit themselves based on their skill and their work ethic. This is where the CloudTrucks Business Partner relationship shines!

So how does this partnership between you, the business professional, and CloudTrucks work? Simply put, we both bring our expertise and work ethic to the table. You, as a professional, run your business and choose your loads and when you run as you see fit and CloudTrucks Virtual Carrier product helps you with that every step of the way. Our goal, since our interests are directly aligned, is to help you run your trucking business as efficiently and profitably as possible.

Partnering with CloudTrucks’ Virtual Carrier means you would run your business under CloudTruck’s authority and insurance, with access to tons of loads (I would argue more than more than any other carrier and all in one app), instant pay after proof of delivery (usually in an hour or two), 24/7 support, back office support for booking loads and getting paid for accessorials, a business intelligence tool to help you run your business, support with Safety and Compliance, Fuel and Maintenance Discounts, Lease-to-Own program options, and many other things.

Of course, the next big question is what does this cost and what do you get? The short answer is, 18% of what you make pays for the Virtual Carrier product, in other words, you keep 82% of everything you make. The more thorough answer of what CloudTruck’s offers you is, via non-force dispatch, a lifestyle change that allows you to choose how and when you run and it comes with the greatest amount of services and support available, all at the lowest cost out there. 

So while none of us can control rates or the price of diesel, why not pay the lowest cost for what you can control? So, if you are a safe and hard-working professional that wants to become an independent OO, then I welcome you to join CloudTruck’s Virtual Carrier fleet and keep 85 cents of every $1 you work so hard to earn. Our super helpful Sales team is available to answer any of your questions and help you every step of the way. Lastly, always remember that CloudTruck’s is built specifically to only succeed if their Business Partners succeed.

1 In our attempt to isolate Dry Van and Refrigerated carriers from the FMCSA data on new authorities we restricted to US-based, Interstate, non-Hazmat, non-Passenger Carriers with 5 or less Power Units after removing various categories such as auto, moving, mining, fuel, oil, livestock, etc.

2 https://freight.ftrintel.com/2022preparationreplay

3Lewis, Dan. 2021 Dec. 17. Ram Parameswaran and Dan Lewis at Latticework 2021 - U.S. Trucking: A Study in Marketplace Economics. https://moiglobal.com/latticework-2021-ram-parameswaran-dan-lewis/. “It turns out that a robust healthy network is actually higher quality of service than dedicating a truck and a driver to a job because something can happen to a truck and a driver sometimes, but a network is very resilient.” at 6:45

Related Articles

Start driving with CloudTrucks!

Have questions? Give us a call at (469) 250-1214