[quito12]

I've been driving local for awhile and am about to head OTR to learn, see if I like it and if so buy a truck. There's one thing, acutally many, that has me puzzled.

This industry has several mega-carriers with thousands upon thousands of trucks and drivers. With that being what it is, how is there so many ower/operators out there doing their own thing. I'm not talking about the ones leased to a mega carrier, but on their own.

What is different about trucking? What I mean is, for instance in retail you have the mega stores like Walmart, Target, Kmart etc, thus the mom and pop stores are gone. In electronics it's Best Buy and Circuit city, no mom and pops.

It seems to me that in most industries, at first blush anyway, that where there are mega anything, the small guys get wiped out.

Any opinions on this?

Thank you.

[acranger]

Interesting question. I do not have the experience or knowledge to answer. I have also wondered this. Someone will shed some light on this im sure.

[yoopr]

"Mega" Sized Companies started after Trucking Deregulation and that's when Rates started going downhill also.
There are still many small and decent companies to work for but Unfortunately to the New person in the business most have to get their experience starting with the Large ones and then after awhile smaller companies, who usually require more experience, will take you on.

[devildice]

"Mega" Sized Companies started after Trucking Deregulation and that's when Rates started going downhill also.
There are still many small and decent companies to work for but Unfortunately to the New person in the business most have to get their experience starting with the Large ones and then after awhile smaller companies, who usually require more experience, will take you on.

I may be wrong, but I think what quito12 is asking is how can an O/O with his/her own authority survive when it would seem that the "mega" carriers could easily take over the freight.

[quito12]

I may be wrong, but I think what quito12 is asking is how can an O/O with his/her own authority survive when it would seem that the "mega" carriers could easily take over the freight.[/quote]



This is exactly what I meant devildice.

[GMAN]

I spoke to a representative with the American Trucking Association who told me that 87% of all carriers have fewer than 50 trucks. It is difficult for the single truck carrier to make it today. There are a number of reasons. Economies of scale make it challenging. For instance, the larger carriers can get discounts on tires, fuel, which some small operators cannot get. There are ways you can get some of these discounts, but many are not aware of them. Finding loads can be time consuming. Larger carriers have dispatchers to help keep trucks loaded. The single truck carrier must constantly be on the lookout for the next load. There are a number of compliance issues which are much easier for the larger carriers than the small operator. Keep on top of fuel taxes and other paperwork can be challenging when you are doing the driving, dispatching, etc., Some things can be subcontracted out, but most will perform these tasks themselves.

I don't want to seem negative about this. There are many who thrive running a single truck and would not want to do it any other way. I prefer running my own authority, for a number of reasons. It takes a certain type of personality to make things work as an independent. Just as not everyone is cut out to be an owner operator, not everyone should get their own authority. The idea is to be successful, whether you are a company driver, owner operator or carrier. You need to find out what is right for you. It seems that just about every driver you talk with wants to own his own truck. Many jump into this without thoroughly thinking things through. There are a number of things which a driver must learn to be successful as an owner operator or independent. We all make mistakes, but without some actual otr experience, you don't really understand what you are getting yourself into.

As a small operator, you have more flexibility than a large carrier. If you can find smaller shippers, you may be able to give them more personalized service. I have known of a few who have managed to work contracts with some larger shippers, such as Coca Cola, etc., and it has worked out very well for all concerned. One of the main problems with the industry right now, is that many who become owner operators or who run their authority, are willing to take cheap freight just to keep their wheels moving. This hurts the entire industry. These people may own a truck but they are not business people. They have no concept of what it takes to operate a business. These people are the reason why the truck dealerships are full of repo's. An independent can make quick decisions and changes, where the large carriers may need to put together a meeting. The large carriers are so focused on the bottom line that they seem to forget that the drivers are their greatest asset. The successful independent knows that his survival is dependent on what he does today. He is the captain of his own ship. He makes it or fails on his own merit. Every day he throws his bread upon the uncertain waters of an often changing economy. Not everyone is comfortable doing that. I have known of independents who have survived for many years and done well. I have also known of some who fail during their first year. It is certainly not a business for the faint of heart.

[quito12]

Thanks as always for your insight GMAN. A quick question because I don't want to stray off topic. What's the difference with being an O/O and having your own authority?

Anyway, I repectfully feel you didn't address the heart of my question. Maybe there is no simple answer, but I don't understand why the Mega carriers haven't put all the thousands of small carriers out of business.

I understand the better service etc, but the fact of the matter is I can't open up a general merchandise store and not make people stand in line forever and treat them good and beat Walmart. In most industries, thoughI admit I haven't studied it, you can't compete with the mega anythings.

Of course there are exceptions. There are mega restaurant companies like Darden which ows Red Lobster and Olive Garden etc and other big companies like Applebees, but there will always be room for local restaurants because that deals with people's tastses etc.

However trucking is getting the frieght to where it's going. So I still wonder why there aren't just a few mega carriers and everyone else works for them like in the package business where there is FedEx, DHL, UPS, and USPS. that's it, there's not thousands of O/O in that business. Well let me qualify that, there are O/O for Fedex etc, but not thousands with their own authority.

Thanks again for any and all insight provided.

[solo379]

Originally Posted by quito12

Anyway, I repectfully feel you didn't address the heart of my question. Maybe there is no simple answer, but I don't understand why the Mega carriers haven't put all the thousands of small carriers out of business.

Cause all those "mega" carriers, simply don't have trucks, to handle the volume!
They only have, about 5-10%, of total trucks on the road, but they do control, about 60% of freight, thru logistics(brokerage).
So they simply need all those "independent", and for now, putting them out of business, wouldn't be to their advantage.

Besides, with all those "got to go" morons, they probably make more money, from brokering freight, than to puting it on their own truck! :sad:

[quito12]

You know Solo379, this thought that you state, that they can't handle all the freight, occured to me. I got to thinking that all these industries that have one or two mega giants in their field, Like Walmart and Target in their field, Lowes and Home Deopot in theirs etc, well all of them need trucks to get their stuff. So this business must be absolutely enormous.

However here is a list of companies by revenue from 2003,

1-United Parcel Service $21,339,874
2-FedEx Ground 3,912,000
3-Schneider National 2,905,000
4-Roadway Express, Inc. 2,844,214
5-Yellow Transportation Inc. 2,788,078
6-FedEx Freight 2,689,000
7-J.B. Hunt Transport, Inc. 2,433,469
8-Swift Transportation Co. 2,397,655
9-Con-Way Trptn. Services 2,107,258
10-Overnite Transportation 1,475,463
11-Ryder Integrated Logistics 1,459,603

This doesn't even come close to the biggest revenue companies overall, as a matter of fact $21 billion would just about to place it around 100.

I don't know, I have a lot to learn. I'll be heading OTR very shortly. Hope I like it. Anyway some of my questions might get an answer, but as is the case usually it will probably beget many more questions.

[LOAD IT]

Quito12

You are thinking too hard and about the wrong things. Dont worry about what the mega-carriers make. Ask yourself, what can I make with 1,2,3-50 trucks, how many customers can I offer 100% ontime service and get paid top dollar. If 87% of all carriers have less than 50 trucks, who are really the MEGA carriers? All the 1-50 truck carriers. This business is grreeat! You can start with nothing and build something or you can start with something and lose everything. IMO you have to work hard everyday, even when you are away from work you have to be looking forward to the next opportunity. The small independent carrier is here to stay and more people can become "independent" if they change their outlook, the transition from company driver to O/O is not hard if you ran the company truck like it was your own. If you were an advance hound as a company driver, you will be a quick money hound as an O/O and you will not be successful (this comment is not aimed at you, just something that I have observed). Trucks take bucks. You will not become a millionaire with 1 truck, but you can live a comfortable life. The more trucks, the more issues, the more money. I'm sure that I didnt answer your question, but did I? Think about what everyone has said and formulate an answer. There may not be 1 answer. Just do what works for you. Be successful everyday and you will survive.