The new face of independence: Autonomy, partnerships and technology
Change is coming to independent trucking, says Dennis Brannon, a former owner-operator based in Columbia, S.C. He believes that as the Millennial generation (those born during the 15 or 20 years following the early 1980s) takes the reins of trucking, a more fluid, broadly connected business model will define the most successful owner-operators.
Brannon, who heads Artisan Logistics, an independent agency in Landstar System’s network, already sees a surge of interest among younger drivers in operating independently, whether owning a truck or leasing equipment.
“The Millennials want to be more independent,” he says. “They want that flexibility. They’re tired of working for the man, and they want results now.”
Brannon’s not alone in his thinking.
The ability to tie the financial side of the business seamlessly into the systems of carrier and brokerage partners will make it easier for independent contractors of any generation to run with their own carrier authority, leading to growth in that segment of the owner-operator world.
Helping to launch this trend is the profusion of networked mobile computing tools and access to information for operational, financial and relationship-building purposes. It will help the owner-operator to evolve further into “a more business-minded person,” says ATBS President Todd Amen, whose financial services firm works with thousands of owner-operators, most of them leased.
Amen also looks forward to a generation reared on smartphone apps and videos, eager to tinker with the business status quo of trucking. Brannon believes that the on-demand transactional models that mobile communications technology and the Internet itself have begun to facilitate will become entrenched in the trucking business as that generation takes over.
“Those under the age of 35 I’ve talked to – they don’t want to put in a year or two to get their head beat in,” run ragged by a large long-haul carrier for years before achieving independence, Brannon says. Motor carrier authority, as well as leased rather than owned equipment, will be more attractive, he adds.
Operators will use real-time information more readily to guide efficiency in load negotiation and the ultimate transaction. Baseline telematics systems in virtually all trucks, embedded in their hardware or via operator smartphones or other devices, will present new tools to a population that has not had much opportunity to use them.
Comfort with information sharing will grow, says Jay Thompson of Transportation Business Associates. “You’ll be able to do a better job of personal time-planning, managing your log time. Information sharing [with shippers and receivers] will make the flow of freight in and out better.”
Traditionally, owner-operators “never are 100 percent safe” when times get tough, particularly in an exclusive lease to a carrier with a large number of company drivers and owned assets to protect, says Gary Carlisle. No longer driving, he owns a truck and manages the small private fleet of oil and gas services company Agri-Empresa in Midland, Texas.
However, if Brannon and others are correct, tomorrow’s owner-operators may be more willing to assume such risk. What’s more, continued diversification of business partners for the most independent of truck operators holds potential to reduce the risk.
“There’s an increasing kind of osmosis between the big guys and the small guys” in accounting, vehicle and driver monitoring, and other areas, Thompson says.
One example is Trucker Path’s routing and load-matching application, which integrates transportation management software, says Charles Myers, vice president of strategy.
Integrated TMS tools help manage functions such as load negotiation, invoice collection, tax accounting and profit analysis. Integrated TMS tools for small fleets already are available from companies such as DAT and Truckstop.com, and they will be a growing boon to owner-operators, he says.
“If the guy can fill out his cost matrix in the back end of the [software] – fuel, insurance, tires – this software will quickly spit out what his profit is and how he’s doing with his loads,” Myers says. “Managing all of the costs and trying to figure out where’s the sweet spot on their rate per mile” could become much easier.
Amen says such widely available and affordable tools will increasingly “free up the driver to not be tied exclusively to massive systems and massive companies.”
A multiplicity of business partners, even for those operating without authority, could evolve into the norm. Given increasing connection between the truck cab and the back office, the threat to today’s exclusive-lease model is real.
“More so than it happens today, [owner-operators] might haul for multiple carriers rather than one,” says Thompson. He foresees it being commonplace that an independent with his own authority may “pull a Schneider or Swift trailer from point to point and then get someone else’s trailer to go back.”
Or a nonexclusive blended leasing model, with carriers agreeing to share capacity, may emerge as a norm. Something similar is happening today in the Omnitracs Sylectus Alliance Network, particularly prevalent among expedited carriers using the Sylectus TMS.
The platform allows carriers to easily reach out to others using the system for needed capacity when a load can’t get covered, streamlining such transactions.