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The freight industry has experienced a historic run of tight capacity and increased rates, with more than 18 months without relief from rate volatility and supply gaps. In 2021 alone, 56% of truckers reported capacity delivery issues – up from 29% in 2020.
In a volatile and stressed market, it is vital for shippers and carriers to have solutions that improve their access to cargo or capacity and strengthen their operations through rapid execution. With cargo plentiful but a lack of capacity to transport it, drivers have seized the opportunity and used new tools to launch new transport companies.
2021 saw a tidal wave of new state-owned airlines and owner-operators entering the market, with new registrations up more than 300% year-on-year in May.
This pool of new public hauliers and owner-operators is being reinvigorated – they are younger, tech-savvy and experienced drivers who are leaving large haulage companies to start their own businesses.
And contrary to previous assumptions, these carriers are high-performing and dedicated, and often fare better on key metrics like on-time delivery and reliability.
In 2022 we are approaching the start of a new era for corporate transporters. The industry should be ready to adapt to small shippers by providing systems and technology to help them succeed.
Who is the entrepreneurial supporter?
While access to capacity is tighter than ever, capacity dynamics are changing, leading to more and more new government airlines entering the market. After surveying and speaking to those in our marketplace, we have found that the majority of entrepreneurial hauliers are professional drivers who leave their hauliers to set up their own agency.
As of 2021, more than 600,000 owners and operators are employed in the United States, and that number is growing rapidly. The average age of the employed operators is 47 years. The presence of owners and operators is increasing across the country.
These drivers are experienced and started out as company drivers. They start their own carrier business because the opportunities in today’s market are plentiful and it’s easier than ever to get started. According to data from Uber Freight, 60 percent of new government haulers cite higher pay and a more flexible work environment as the top reasons for starting their own business.
With the technological revolution in freight over the last five years, car hauliers can now also download apps and start hauling right away, getting paid in days instead of the weeks or months it traditionally took. Personally, drivers have told me that without the opportunities and easy access to freight offered by Uber Freight and other new entrants, they would never have been able to start their own carrier.
How the industry can embrace these carriers
Entrepreneurial hauliers are an important part of the market and a key solution to having a healthy pipeline of drivers and avoiding labor shortages. As an industry, it is up to us to make the market more attractive and sustainable for new authorities.
Technology can position the market well for entrepreneurial success. By providing flexibility and a level playing field for owners and operators, the industry can empower the smaller airlines.
For example, shippers should have equal access to the loads in a network, giving them the perfect foundation to launch their new business. Loads also have upfront prices, so even if a driver doesn’t take the load, he has an option and good information about the rates. Compare this to the opaque pricing that the industry has traditionally offered and it’s clear that upfront pricing is empowering for new carriers.
Systems and technology within platforms also help carriers know their performance in real time, giving them access to reliability and service metrics, and advising carriers on how to improve their reputation with carriers. We find that our carriers want to improve and build a successful business. The better informed they are, the faster they can improve.
We are also seeing accelerated adoption of fixed capacity solutions by owners, operators and small fleets. Committed capacity offers contracted freight opportunities from shippers of all sizes to carriers of all sizes – even individual owners and operators – who in the past would never have been able to participate in freight offers from large corporations. The most successful carriers build their business on the foundation of consistent freight, but these opportunities have historically been elusive for most carriers.
Shippers can also help support entrepreneurial hauliers by ensuring drivers have a good driving experience and can get from point A to point B on time.
Carriers should have visibility into their facility ratings so they can get feedback on the carrier experience. By reviewing these reviews, carriers have noticed improvements in facilities across their network. This is critical to ensuring we support hauliers on the road – delays, lack of access to facilities or poor on-site personal interactions can lead to burnout and low morale for drivers.
The carrier market is changing and small carriers are stronger than ever. We like to think that by building a more sustainable, transparent and efficient market we have had a small part in the changing carrier market.
When carriers are successful and happy in their jobs, shippers also benefit by having access to more experienced drivers who provide better service.
Empowered carriers make wise decisions for a more efficient and reliable network, and we must empower both carriers and carriers with better information, better execution and a better work environment.
Bill Driegert is the operations director and co-founder of Uber Freight, a digital freight broker that uses a mobile app to match carriers with shippers. Uber Freight is a division of ride-hailing company Uber Technologies Inc.
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