The trucking industry has recently dominated headlines due to crises stemming from the pandemic and supply chain disruptions. However, many might not realize that the need for more drivers existed prior to 2021/2022.
This heightened demand for drivers has created what many view as a prime opportunity to enter the field.
I understand why this is appealing!
For many, the prospect of starting a business with high demand is tempting, especially for those desiring independence as an owner-operator.
Recently, we’ve been receiving numerous inquiries about how to enter the industry, and our advice is clear: BE CAUTIOUS!
Prospective truckers must be aware of three significant red flags before making their move.
Industry Giants: Amazon and Walmart
The dominant forces in the trucking sector, Amazon and Walmart, exert considerable control over the market.
Amazon, in particular, faces scrutiny for its treatment of workers, struggling with demanding delivery quotas and maintaining a turnover rate that is significantly higher than the industry average.
Moreover, small independent operators often find it difficult to compete against these large companies that offer higher wages and can handle significant employee turnover.
So, you’re faced with two choices: work for these giants as an employee and contend with their difficult working conditions for the security that comes with it. Or, you can take the leap as an independent owner-operator, embracing the freedom but facing the inherent challenges of managing a business.
Significant Equipment Maintenance Costs
Another critical factor to consider before becoming an owner-operator is the overwhelming cost of maintaining your equipment.
While being your own boss carries certain freedoms, the expenses involved in operating and maintaining a truck can be shocking for newcomers.
Many newcomers mistakenly believe they can easily finance the purchase of a truck or trailer.
The major costs involved in joining the trucking industry include:
- The actual purchase or lease of equipment
- Maintenance and repairs
- Licenses and permits
- Insurance (which is substantial)
- Fuel
According to The Trucker’s Report, the average annual cost to operate a commercial truck is about $180,000, with a per-mile operating cost averaging around $2.90. Fuel constitutes a significant portion of these expenses, and owner-operators must carefully scrutinize their annual costs.
Does it still seem like an attractive choice? Adding to these burdens are the rising repair and maintenance costs, which, according to the American Transportation Research Institute, have surged by 24% since 2012 and are expected to increase further due to the pandemic and supply chain issues.
Driver Shortage or Retention Issue?
While many attribute the driver shortage to the pandemic or perceived labor reluctance, the real issue stems from an outdated system motivated by greed.
The lack of capable drivers is not the problem; over 400,000 new drivers earn their licenses each year, a number sufficient to address the reported 80,000-driver shortage. So, where are they going?
In short: they are seeking better opportunities.
Truck drivers’ earnings can range from $20,000 to over $60,000, and owner-operators can sometimes earn double that—given they can manage all associated costs.
However, these figures can be misleading. Drivers typically work 70 to 80 hours a week, often without pay during lengthy loading times.
As noted by Todd Spencer, president of the Owner-Operator Independent Drivers Association, “40% of the work I do, I’m not getting paid for, and no one should be happy about that.”
Solutions are possible for retention issues, but you need to ask yourself if this is truly the right industry for you.
Owner-Operators, Proceed with Caution!
Think twice before becoming an owner-operator, especially with potential clients like Walmart or Amazon. Fair treatment may not be guaranteed.
While some individuals succeed in this space, partnering with these companies could lead to significant pitfalls.
If you genuinely wish to enter the trucking field, seek out a reputable company to work with.
I welcome your opinions on this matter, whether you align with my perspective or not.
