Posts Tagged “owner-operators”
The trucking industry brought in $700.4 billion in revenue in 2014, according to a report released this week by the American Trucking Associations. That’s the highest total revenue in history for the industry and the first time trucking has surpassed the $700 billion mark, ATA says.
The combination of a significant jump in freight volume in the year and tightening capacity spurred the revenue uptick, says ATA Chief Economist Bob Costello.
ATA’s report,its annual American Trucking Trends, also showed the trucking industry moved 68.8 percent of all domestic freight, or 9.96 billion tons, in 2014.
And the $700.4 billion in revenue accounted for 80.3 percent of all freight transporation spending, ATA says.
Owner Operators/Independents
Owner-operators, led by independents and flatbedders, had a record year for net income, according to averages from ATBS, the nation’s largest owner-operator financial services provider. Leased operators and independents together cleared an average $56,167 during 2014. That’s 7 percent above the 2013 average, $52,406. Strong freight demand, a driver shortage and plunging diesel prices contributed to the increase.
The 2014 total “is $2,000 higher than we predicted and most of it comes from the fourth quarter fuel cost reduction,” says Todd Amen, ATBS president and CEO. “All segments had a really good year.” Net income for independents and flatbedders topped $60,000. Independents’ income showed the biggest gain over the year, 8.7 percent. Flatbed haulers, however, experienced virtually no change in income in 2014. That reflects flatbedders experiencing stronger demand and rates a few years before dry van and reefers haulers, says Gordon Klemp, head of the National Transportation Institute. NTI’s National Survey of Driver Wages tracks compensation of drivers at medium-size and large fleets. “Most of the independent contractors operating in the independent and flat markets are on percent of load type programs, so their pay adjusts quicker,” Amen says. “The independents are certainly more in the spot market as well. So these two segments reflect a really good freight market last year. They have higher highs in good times and lower lows in bad times, more volatile than the other segments.”
2014, net income for the groups tracked by ATBS was:
- Independents: $60,157
- Dry van: $54,490
- Flatbed: $60,510
- Reefer: $52,064
Klemp says falling fuel prices helped owner-operator earnings in two ways. One is owner-operators receiving less than a 100 percent fuel surcharge pass-through have seen their share of fuel costs dropping proportionately. The other is that because surcharges are adjusted weekly after the U.S. Department of Energy releases its average fuel prices, a surcharge will overcompensate an owner-operator as long as prices continue to fall during the week.
Sign-on bonuses have been stable in recent months, Klemp says. The mid-point is $3,000 to $6,000, with the top tier $6,500 or more. Team bonuses remain very strong, and he has seen them as high as $15,000. Many fleets use bonuses selectively by region, to meet demand, and often keep high bonuses in place only briefly.
My first visit to the Hunts Point Terminal Produce Market was in February 1989. Over the past 25 years I have visited the world’s largest produce wholesale facility more than 50 times.
Having been to most of the nation’s major wholesale produce markets, New York City’s South Bronx mammoth is the most fascinating. Being so large it has the most activity, the largest volume of trucks – and produce – moving in and out of the market.
Whenever possible, I enjoy visiting with owner operators, small fleet owners and company drivers who are at Hunts Point. I’ve heard the stories of excessive long delays waiting to unloading, because a receiver is using their reefer unit as a free warehouse. I’ve been told about the unfair claims truckers face, especially on loads that have lost market value from the time it was bought until it arrives at destination. There also are complaints about the $20 gate fee, however, these are often included anymore as part of the freight rate.
While these problems still exist at Hunts Point, it seems I’m finding fewer trucker complaints. Granted, I am only able to talk with a minute percentage of the 130,000 truckers that go the market each year.
However, as transportation costs increase, and good, dependable service becomes more of a premium, it seems more produce receivers than in the past appreciate receiving a delivery on time and in good condition. In other words, you pay for what you get.
Trucks are in greater demand than ever. You hack off a driver, and he or she has other choices. They don’t have to deliver to Hunts Point or anywhere else. In talks with drivers at truck stops and other places, I used to hear as often as not, they simply would not go to Hunts Point because of traffic, gridlock, tolls and yes – treatment at the docks. I don’t hear it as often as I used to.
Hunts Point only has about one-third the number of wholesalers on the market compared to when it opened in 1967. I like to think that while the consolidations, mergers and acquisitions have resulted in fewer, but larger merchants – hopefully their growth resulted from good, honest businesses practices.
For whatever reasons, Hunts Points is a pretty interesting place to visit. — Bill Martin
(This is the last of a four-part series based upon my visit to Hunt Point on Dec. 4, 2014)
When you lay your reputation on the line, both as a company, and personally, you had better come through.
It is no accident that after 20 years in the industry, Lorne Swartz’s newest venture, Scout Logistics Corporation of Toronto, ON has delivered on its promise to provide owner operators with important services.
Besides offering some of the highest paying loads in North America, Lorne says Scout Logistics has a no fee, 24-hour Quick Pay guarantee on all produce hauls. He also says the company offers 24-hour dispatch, plus over 90% of their loads involve one pick up and one drop. Drivers are also able to stay connected with daily emails of available loads direct to their inbox through the company’s FREE Carrier Connect service.
“Currently, we arrange about 20,000 loads a year out of California, or about 400 truckloads a week, – 95 percent of these loads are in fact produce,” states Lorne Swartz, president.
Dani Etkin, Vice President of Business Development adds, “We have more than 1,000 owner operator partners who we work with on a regular basis. We know them personally – they visit our office on a regular basis and we trust each other implicitly -We give them the best rates and they know we’ll take care of them.”
By working for over 20 years with some of the largest produce companies in North America, Scout has built a relationship of mutual trust with both customers and carriers which results in fewer claims and rejected loads.
Scout Logistics works with a majority of its owner operators almost exclusively and provides both in-bound and out-bound freight opportunities.
“We try to build the business of our carriers, because when they are successful, we are successful,” says Swartz. “We’re always looking for new ways to make our carriers lives easier, just last year we redesigned our private load board, Carrier Connect, making it easier for carriers who are on the road to view loads and contact the dispatcher responsible, in just one click.”
Besides its Toronto headquarters, Scout Logistics has branch offices in London, ON, as well as Lebanon, NJ with plans to expand into Florida and Texas in coming months.
While the company is strongest with loads originating out of California and Arizona, it also does a sizeable business from South Texas and Florida as well as loads transitioning into Canada.
I have so much to be thankful for this Thanksgiving. There is my beautiful family, not the least of which is our newest member, my first grandchild, Sawyer, born on November 1st. I am thankful to live in this great country. I’m thankful for my health. I could go on and on, but right now I want to focus on the trucking industry, why I am thankful for it, and in particular the small fleet owners and owner operators.
When folks think of the truck industry, they often relate to the large fleet operations. There are 2.7 million Class 8 trucks registered in the U.S. However of the 500,000 registered trucking companies, 97.2 percent are operations with 20 trucks or less.
HaulProduce.com focuses on the transportation of our nation’s fresh fruits and vegetables — produce haulers. While produce is a small segment of the overall trucking industry, it is so vital in providing healthy foods, on a timely basis to receivers across North America, who supply consumers.
Of that 97.2 percent of trucking companies previously mentioned, 90 percent have five trucks or less. In other words the owner operators and small fleet owners are the backbone of the distribution system in this great country!
While we tend to hear only of the delays at loading and unloading docks, the unfair claims, the excessive rules and regulations, every day thousands of loads are delivered on time and in good shape, without problems.
There is a need in a well rounded transportation system, not only for the medium and large truck lines, but the small fleets, owner operatiors – and yes truck brokers or third party logistics companies.
It is the small operations that provide the flexiblity, and service that is so vital in delivering perishable food products.
For this I am thankful. It is because of you I go to my local supermarket every week to find healthy, fresh food products.
God Bless. Wishing each of you a great Thanksgiving. — Bill Martin
Here’s four issues in the trucking industry to ponder – and you decide whether they are valid.
*The driver’s shortage is a hoax.
*One of the last concerns of large fleets is the well being of owner operators and small fleet owners.
*Regulations are killing the deregulated trucking industry.
*California produce rates have been lower in recent years and the reason may be different from what you think.
These four statements came to mind following a telephone interview with Kenny Lund, vice president of Allen Lund Co.
Is There a Driver’s Shortage?
When it comes to a driver’s shortage relating to fresh produce, Lund sees the only shortages being at shipping point and at the receiving end These involve short hauls from the field to packing houses and from receiver distribution centers to retail stores, restaurants, etc. But he doesn’t see a driver’s shortage with long haul produce transporation.
Lund concedes there may be a shortage of drivers with the larger trucking companies, stating, “if you have 300 trucks you have to come up with 300 drivers to fill them.” However, produce transportation is dominated by owner operators, who is the driver of his own truck. He doesn’t have to recruit other drivers.
Large Fleets Hurting Owner Operators?
“It seems the larger truck lines are doing everything they can to make it tougher on owner operators,” Lund states.
As examples, LaCanada, CA-based Lund points to big carrier support of everything counter to issues of importance to owner operators. He cites large fleet support of Electronic Onboard Recorders (EOBRs ) that will add costs, and support of California Resources Board (CARB) rules. Why?
Lund points out large carriers tend to rotate their fleets every five years and it is the owner operators who are buying their used trucks. This wouldn’t be so bad except the CARB rules require equipment such as reefer units not to be older than seven years.
“You have to retrofit it for a cost of anywhere from $8,000 to $20,000,” Lunds says. On the plus size, he adds the fleets are starting to realize the CARB rules are not only bad for owner operators, but for the whole trucking industry. Lund believes the damaging CARB rules are a much bigger threat to the industry than a driver’s shortage.
Growing Regulations
Perhaps the biggest threat to the survival of owner operators are the growing number of federal and state regulations.
“When you produce all these regulations on an one-horse operator, he doesn’t have the resources to comply with everything,” Lund states. “It’s really putting a strain on them.”
Why Have California Rates Been Lower?
Lund notes California produce rates have not been as high in recent years. At the same time he is noticing more truck shortages, but not in California.
“There’s just not as many trucks in California now. What has kept the rates down is there is not as much produce (being grown in California),” Lund contends.
It comes down to California’s intrusive regulations, etc. are also resulting in more produce growers shifting their operations to Mexico where the red tape and costs of operation are less. For example, similar to California, there is less produce being grown in the Lower Rio Grande Valley of Texas, yet more truck shortages are occurring there, as more Mexican grown fruits and vegetables are being shipped into South Texas.
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These issues are presented to you following a telephone interview with Kenny Lund. I have known Kenny’s father, the namesake of the company since shortly after his modest beginning in 1976 as a truck broker . Today, the company works with over 20,000 carriers, which are mostly owner operators. ALC arranges about 200,000 loads a year, with food items accounting for over 50 percent of the freight. Refrigerated loads make up about 40 to 45 percent of the loads.
While Allen Lund remains involved in the company, Kenny Lund has assumed a greater role in the continued growth and success of the operation. At the same time, the high ethical standards put in place by Allen nearly four decades ago, remain rooted in the company’s foundation. — Bill Martin
The food and pharmaceutical industries are rapidly moving towards 
returnable transport items (RTIs) and reusable plastic containers (RPCs) for shipping goods through the supply chain. Why? They’re lighter, more durable and now can be made intelligent. By adding temperature monitoring capabilities directly into the RTIs and RPCs, growers, manufacturers, shippers and retailers can both track and monitor the quality of their products as they move through the cold chain to improve quality and operational efficiency while lowering costs.
Press Release: Intelleflex
(Editor’s Note: This also can provide protection from claims for owner operators and transporters)
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