Owner-operator population still shrinking, says Schneider VP

Nov 18, 2003 12:00 PM

Despite tighter truck capacity and the potential for higher freight rates due to impending hours of service (HOS) rule changes, the number of owner-operators may continue to dwindle.

“There’s been major cash flow erosion for independent operators between 1997 and today,” Schneider National VP Don Osterberg told Fleet Owner. “They have really felt the spikes in insurance, healthcare, and fuel costs of the last few years the most in this industry. The often romantic view of the owner-operator lifestyle has withered considerably under the rigors of the last few years, so we think their numbers will continue to shrink.”

Just how much the population of owner-operators has dwindled is a matter of some debate. According to one estimate, their numbers have dropped from 360,000 in 1999 to roughly 175,000 today. Consultant Andy Ahern of Phoenix-based Ahern & Associates estimated that 35,000 independents have left the industry in the last year alone.

However, for those independent operators that have managed to survive thus far, there are some glimmers of hope – especially as carriers expect to expand their fleets to meet the new, more stringent HOS rules that go into effect next year.

“From the carrier standpoint, trucking is a very capital intensive business,” said Schneider’s Osterberg. “So as long as we can use independent contractors to reduce our capital spending while expanding our fleet, we’ll pursue this option.”