ATRI research on truck driver motivations and satisfaction
The American Transportation Research Institute released results on its analysis on what motivates truck drivers to become company drivers or owner-operators/independent contractors (OO/IC). The data came from over 2,000 drivers, two-thirds of whom are OO/IC, and includes additional analysis on compensation models and driver satisfaction. Quick rundown of results below and full report here.
Top 3 motivators
- Job security/stability
- Health care/retirement savings
68.9% indicated being very satisfied/satisfied with income
70% indicated annual wages between $50,000 to $100,000
Top 3 motivators
- Independence/ability to set hours
- Choice of routes/length of haul
80.1% indicated being very satisfied/satisfied with income
50% reported net incomes over $75,000
A large percentage of OO/ICs expected a significant decrease in job satisfaction (73%) and annual income (68.3%) if they were classified as company drivers.
Lease and owner-operators at large carriers continue to be recruited based on whether they can pick their own loads and work their own schedules. Most major carriers have a department tailored to converting company drivers into OO/ICs and specific fleet managers to set them apart from the company drivers. This is a lucrative option for large fleets to pass down older equipment with updated lease agreements, often with no money down and no credit check.
Results may vary, as successful OO/ICs must navigate a large carrier’s freight network carefully to avoid bottlenecks and area’s where they may run into the same dwell issues as the company drivers.
Trailer material shortage impacting trucking growth
Net trailer orders for October dropped 40% to 16,700 units and off 70% from 2020’s peak order month, based on preliminary data released by ACT research. Don Ake, FTR director of commercial vehicles, said, “Orders have been tepid all year. The challenge for many OEMs is not to acquire more backlog, but to manage the backlog they have. Fleets need lots of new trailers; however, the manufacturers are being careful about how and when to slot these commitments into the build schedule.”
Ake summarized that the major OEMs are rolling unbuilt 2021 orders into 2022 and filling any gaps with new orders. With long order backlogs and supply chain material bottlenecks, continue to expect limited trailer deliveries compared to demand, as suppliers continue to work through labor challenges and increase volume.
Wabash National Corp. expects to produce about 25% fewer trailers this year than before the pandemic, due to shortages in key areas such as foam insulation, suspension components and tailgate wiring.
Frank Maly, ACT’s director of commercial vehicle transportation analysis and research, said, “That’s not because the fleets don’t want to buy trailers or place orders. … It’s because the manufacturers at this point are very hesitant to accept additional orders.”
Trailers are critical to any truckload network. A lack of repair and replacement parts is causing older trailers to remain idle, while new trailer orders are coming in at a trickle. This is going to cause upward pressure on rates, as the cost of repairs and lack of trailers will impact truckload capacity. Fewer trailers at key locations means fewer loads potentially hauled. Back when I was a load planner, the biggest challenge to managing an overbooked market was whether you had available empty trailers, and fewer in circulation will cause service delays due to detention and breakdown.
Market Update: Net income margin for core carriers at record levels
Newly released ACT research shows carriers earning record net income amid a backdrop of supply chain disruptions, inflation and pandemic-related challenges. ACT’s president and senior analyst, Kenny Vieth, said, “To that end, the publicly traded TL carriers saw profitability land just short of best-ever profit margins in Q3, with seasonal adjustment boosting net profits to a record 8.6%, eclipsing the previous record set in Q1 ’21. … Additionally, we tend not to view freight as a backlog business, but rather a real-time expression of economic activity. In this unusual period, an actual freight backlog argues for strong freight fundamentals well into 2022.”
Trucking is a market dominated by the business cycle, and understanding these record-high margins in a traditionally low-margin business indicates increased demand and economic activity moving into 2022. If we see margin compression or drastic downward changes in net income, I would predict less consumer demand or a lowering of economic growth.
The routing guide: Links from around the web
Virtual Reality Trucking Training, saving costs and increasing safety (Transport Drive)
TIA survey says: 3PLs’ revenue up over 10% quarter-over-quarter. (FreightWaves)
New Release: FreightWaves electric vehicle companies directory (FreightWaves)
Vietnam Lockdown: Furniture retailers struggle with depleted inventories (Supply Chain Drive)
More parking please? OOIDA advocates more truck parking in a letter to Transportation Secretary Pete Buttigieg. (Fleet Owner)