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New motor carrier approvals at nosebleed levels, FTR says

Carrier approvals could result in short-term disruption, consultancy executive says.

More drivers are going out on their own (Photo: Jim Allen/FreightWaves)

Approximately 51,000 motor carriers have already received common or contract carrier authority through June, making 2021 likely to surpass 2020’s calendar-year record of 59,000, according to transport consultancy FTR, which analyzed data from the Federal Motor Carrier Safety Administration (FMCSA).

The applicants were predominantly one or two-truck entities, though there were some private fleets who applied for authority so they could conduct for-hire carriage, said Avery Vise, FTR’s vice president-trucking, who presented findings during a company webinar Thursday.

In a post-webinar interview, Vise said the applicants were not driver newbies, but company drivers who have gone out on their own or owner-operators that had been working under a lease arrangement with larger carriers but became fully independent either voluntarily or after being cut loose during 2020 when the COVID-19 pandemic shut down much of the nation’s economy. 

The battle in California over the legality of classifying drivers as independent contractors could have led to a break in carrier-contractor relationships that sent some drivers into business on their own if carriers were concerned about the legal outcome, Vise said. In addition, drivers have access to digital freight matching platforms that could create more opportunities as sole proprietors, he said.

Whatever the reasons for the surge, it is unlikely to represent new driver capacity entering the market, Vise said. One needle-moving factor would be how many of these new approvals are company drivers, he said. If a carrier hires a replacement for the departed driver, then that would technically entail an increase in capacity, he said.

The approval activity over the past 12 months dwarfs the prior high point in late 2017 and 2018, when applications flooded in after rates spiked in the wake of the federal government’s requirement that drivers install electronic logging devices. Vise said he sees no immediate let-up in application and approval activity, especially with the U.S. trucking market remaining as buoyant as it’s been in recent memory. 

Truck utilization is at record highs, about 10% higher than the 10-year moving average, according to FTR data, which dates back to 2004. Truckload rates across the three main segments–flatbed, refrigerated and dry van–are at record highs, FTR said. Rates will level off somewhat in 2022, but remain historically elevated, FTR said. “There’s not a whole lot of relief” ahead for truckload rates, Vise said during the webinar.

For shippers and carriers, the trend presents a productivity challenge should these once leased or company drivers disappear from core carrier lists and from routing guides, Vise said. In the long run, the nation’s truck system could become more efficient and responsive as newly-minted owner-drivers seek out markets where loads are available but capacity isn’t. That scenario is fairly far out in the future, Vise acknowledged. For the next 12 months or so, disruption and productivity issues would be the most likely outcome of the new approval activity, he said.

Vise said that the popular notion of a driver shortage is simplistic and misguided. A shortage only exists in that carrier executives are unwilling to pay the level of wages that might attract more drivers, but would also add capacity and potentially compress carrier margins, he said. While shippers may feel the pain of an unmoved load, carriers may think the status quo is just fine.

“If freight is getting hauled, then there’s no (driver) shortage,” he said.

At the same time, though, carriers don’t want to get too complacent if they want to maintain customers that might be looking elsewhere for more predictable and affordable service, he said.


    1. Mike

      LMAO! I just noticed that, WOW! I remember when I first started, you bought a Rand McNally map, a notebook and rolls of dimes and quarters. Made it all over both the East and West Coasts with that setup along with Canada and the Midwest… Chicago too… They don’t know how good they have it.

  1. Bruce Wright

    Why is it a “relief” in rates. When the stock market gets over bought a drops it’s a correction. This is just a correction in the right direction. Freight rates have not kept up with inflation for the past 30 years let alone the cost of insurance, license, capital expenditures,road tax or volatile fuel prices. Profit is not a 4 letter word.

  2. Free at last!!!

    Today I became one less on the road. The dot is rabid and a flat tire ended my employability!! That’s right America, when a driver has one, less than perfect day, not resulting in a crash, death, or anything to do with substance abuse, us truckers are put clean out of the industry. Blitz week is coming, expect thousands more to exit this bs job in 72 hours time.

  3. Matthew

    The real problem is that the industry has become over regulated and the general public in many large cities hate our presence on the road and look down on us. The companies take control of your life but not just when your on the road driving its 24/7. You work a 14 hour shift 11 hours of driving a mandatory 30 minute break after 8 hours that everyone takes and logs while fueling you must conduct a routine mandatory pretrip inspection on the truck and any equipment you hook to then a post trip on the truck and any equipment you use during the day then you sleep during a mandatory 10 hour break which leaves you with only 2-3 hours by yourself which is mostly spent filling paperwork and conducting the business side of your job. You have no life and work non stop even when you are sleeping your not getting paid but your satisfying yet another mandate. And you only make slightly more then a Walmart employee during the Christmas season.

  4. Mike

    How many of these new entrants are sitting in Russia or Bosnia right now, looking to score a fast million bucks? The only thing we have going for us are these EPA trucks. The ones hitting the market right now are the worst of the worst. No one sells a good truck, they sell them when the warranty is up and the emissions are starting to fail, those 30,000 to 50,000 mile service intervals guarantee that truth. When that check engine light goes off in that truck 100 miles down the road from the dealership, that is when the fun begins. And these guys can delete these trucks till the cows come home, as there few that even know how to correctly fix the issue. So no worries there, many in frames in the future, if they can get parts or have the cash…

    Not worried in the least here, as most of these guys will find themselves spending more time at the Stealership than on the road, fighting some two bit warranty company to replace that perfectly fine turbo or EGR cooler… Then they get back on the road, and that damn light comes back on… Back to the dealer for another round of financial rape. It is an endless circle…

    If you want to make a million dollars in trucking, start with two million, and be smart enough to get the hell out when the going is good. Everything is cyclical out here, the game changer is the equipment and now insurance rates. One or the other is going to put you out of business.

    You are a damn fool to jump into this racket, not now, wait until the rates collapse and the increased insurance costs wipe everyone out, then get in if you are that much of a masochist.

  5. Freight+logistics+enterprises+LLC

    Scum brokers are still skimming and trying to drive down rates as hard as they can. This has a DIRECT and NEGATIVE IMPACT on the industry and safety of our roadways.

  6. Witt

    No driver shortage.that is correct !Carriers are getting as many driver as they can ,to be independent contractors, before the CA ass 5 spreads to other states, because there is nobody more depended than in- experienced independent with big payments, driver retention in other words. AND with the Democrats wanting to double the lability insurance cost, not sure how it going play, but big carrier may be looking at that want want as many power units in the future, but over all , the industry is doing what patron-client economic always dose , create huge excess to keep rates down. This has ben done too, it will be over with in 18 mo, then the truck auctions will be packed.

  7. Stephen Webster

    In Ontario Canada many small transport companies can not get insurance. The in Ontario transport rates are muck lower than cross border trucking rates. With the A B C test we need a better solution for insurance for owner ops.

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Mark Solomon

Formerly the Executive Editor at DC Velocity, Mark Solomon joined FreightWaves as Managing Editor of Freight Markets. Solomon began his journalistic career in 1982 at Traffic World magazine, ran his own public relations firm (Media Based Solutions) from 1994 to 2008, and has been at DC Velocity since then. Over the course of his career, Solomon has covered nearly the whole gamut of the transportation and logistics industry, including trucking, railroads, maritime, 3PLs, and regulatory issues. Solomon witnessed and narrated the rise of Amazon and XPO Logistics and the shift of the U.S. Postal Service from a mail-focused service to parcel, as well as the exponential, e-commerce-driven growth of warehouse square footage and omnichannel fulfillment.