History is rich with companies that worked tirelessly to save their sinking ship rather than change when the need became inevitable. Business models within trucking aren't immune to these shifting sands.
Ongoing legal battles around California’s A.B. 5 contractor law seem to be only the first of winds that could blow a lot of owner-operators in new directions. Witness the PRO Act passing the House, setting the stage for the independent contractor measures to remain even more a fixture of conversation at the national level (even if it doesn’t pass muster in the closely divided Senate, which seems unlikely).
This is just one example of threatening changes to the norms we’ve been accustomed to. They can’t be ignored, but they also can’t be the only consideration for decisions we make as business owners. If you’ve been thinking about taking your business to the next level by obtaining carrier authority, you’re hardly the only one.
My Overdrive colleague Todd Dills and Overdrive sister publication CCJ have highlighted the large influx of new entrants – or carriers who’ve applied for and received operating authority within a year and a half. By the end of 2020, 76,719 one-truck businesses were thus classified. Historically, that’s a very big number compared to earlier times. Though these are not all Class 8 tractor-trailer owner-operators, it’s a clear indication that demand for such businesses is on the rise.
Operating with authority comes with added costs, for sure. But what one person sees as a barrier another will see as a door opening. When trucking businesses have been as profitable as the records show us from 2018 through 2020 -- even with the short periods of rate recession – potential owners can come under the sway of the “fear of missing out.”
Newly released information from financial services provider ATBS supports the perception of improved income for independents. As Overdrive Editorial Director Max Heine reported, “average net income in 2020 for leased and independent operators combined jumped from almost $63,000 in 2019 to $67,742 in 2020, thanks to pandemic-related economic changes.”
What has changed in the last 18-24 months for new-authority owners in particular? Relatively increased ease in finding freight and getting paid faster.
