The Rise of the Entrepreneurial Carrier: What Shippers Need to Know
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The freight industry has seen a historic streak of tight capacity and high rates, with more than 18 months without relief from rate volatility and supply gaps. In 2021 alone, 56% of truckers reported difficulty providing capacity, up from 29% in 2020.
In a volatile and tight market, it is crucial for shippers and carriers to have solutions that improve their access to freight or capacity and strengthen their operations through speed of execution. With cargo plentiful but insufficient capacity to haul it, drivers have seized the opportunity and leveraged new tools to bring new carriers to market.
There has been a tidal wave of new common carriers and owner-operators entering the market in 2021, with new registrations up more than 300% year-over-year in May.
This pool of new licensed carriers and owner-operators is newly empowered — these are younger, tech-savvy and experienced drivers who are leaving big trucking companies to start their own businesses.
And, contrary to what was previously believed, these carriers are high performers and highly committed, often outperforming on key metrics, such as delivery speed and reliability.
In 2022, we are approaching the dawn of a new era for entrepreneurial porters. The industry should be ready to adapt to small carriers by providing them with systems and technologies that allow them to succeed.
Who is the entrepreneurial carrier?
While access to capacity is tighter than ever, capacity dynamics are changing, resulting in more new common carriers entering the market. After surveying and speaking with those in our market, we found that the majority of entrepreneurial carriers are professional drivers leaving their trucking companies to create their own authority.
In 2021, there were over 600,000 employed owner-operators in the United States, and that number is growing rapidly. The average age of employed owner-operators is 47 years old. The footprint of owner-operators is growing nationwide.
These drivers are experienced, having started out as company drivers. They start their own transportation 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% of new public carriers cite increased pay and a more flexible work environment as their top reasons for starting their own business.
With the technological revolution in freight over the past five years, road hauliers can also now download apps and start moving freight immediately, getting paid in days instead of the weeks or months it traditionally took. I have personally had drivers tell me that they could never have started their own carrier without the opportunities and easy access to freight that Uber Freight and other new providers offered.
How the industry can adopt these carriers
Entrepreneurial carriers are an essential 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 common carriers.
Technology can make the market well positioned for entrepreneurial success. By providing flexibility and a level playing field for owner-operators, the industry can empower the smallest carrier.
For example, carriers need to have equal access to a network’s loads, giving them the perfect foundation to start their new business. Loadouts also have upfront prices, so even if a driver doesn’t pick up the loadout, they have an option and good pricing information. Compare that to the opaque pricing that the industry has traditionally offered, and it’s clear that the initial pricing empowers new operators.
The systems and technology within the platforms also help carriers know how they are performing in real time, giving them access to reliability and service metrics, and advising carriers on how they can improve their standing with shippers. We see that our carriers want to improve and they want to build a successful business. The more information they have, the faster they can improve.
We are also seeing accelerated adoption of engaged capacity solutions among owner-operators and smaller fleets. Committed capacity provides contracted freight opportunities from shippers of all sizes to carriers of all sizes – even sole proprietor-operators – who historically would never be able to participate in large enterprise freight offerings. The most successful carriers build their business on a foundation of consistent freight, but these opportunities have historically been difficult for most carriers to access.
Shippers can also help support enterprising carriers, ensuring that drivers have a good driving experience and can get from point A to point B in a timely manner.
Shippers need visibility into their facility’s ratings so they can get feedback on the carrier’s experience. By reviewing these ratings, shippers have identified improvements to their system facilities. This is essential to ensure we support hauliers on the road – delays, lack of access to facilities or poor personal interactions on site can all lead to driver burnout and low morale.
The carrier market is changing and small carriers are more self-sufficient than ever. We like to believe that we have played a small part in changing the carrier market by creating a more sustainable, transparent and efficient market.
If carriers are successful and happy with their job, shippers also benefit from access to more experienced drivers who provide better service.
Empowered carriers make smart decisions for a more efficient and reliable network, and we need to give carriers and shippers better information, better execution, and a better working environment.
Bill Driegert is the COO and co-founder of Uber Freight, a digital freight broker that uses a mobile app to connect carriers with shippers. Uber Freight is a business unit of ride-sharing company Uber Technologies Inc.
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