The Owner-Operator Independent Driver Association Foundation (OOFI) 2021 Annual Freight Rate Survey is out, and what a year it was. Most agree it was one of the best years in decades for carriers, attracting record numbers of new entrants to the industry.
At the end of 2021 just over 86,000 new owner-operators had been issued an authority to operate by the FMCSA, representing a 31% y/y increase. This category represented 32% of new trucks added to the market with fleets between one and 654 trucks accounting for almost 83% of new capacity added. Record-high spot rates have fueled this growth where carriers have seen spot rates almost double since the pandemic began in March of 2020.
To gauge the current state of the freight market for the owner-operator segment, OOFI emailed a 34-question survey to 17,553 members (3% response rate) who allow for email communication on December 1, 2021. This annual survey provides a reliable snapshot of what is occurring within the small carrier population of the industry and yielded some valuable insights.
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Survey demographics
A majority of members indicated that they are truckload carriers (75%) regardless of the type of equipment or freight they haul. Survey respondents were almost entirely owner-operators (85%), with a small segment of company drivers (8%) and fleet owners (4%).
Owner-operators consist of two distinct segments, owner-operators under their own authority (43%), which experienced a one-percentage-point decrease from 2020, and owner-operators leased on to a motor carrier (42%), which, for the second time since OOFI began conducting this survey in 2010, did not represent the largest section of respondents. Those hauling hazmat or specialized loads or providing power only (own their own truck but only haul company-owned trailers) were more likely to fit in the latter category (possibly due to higher insurance and equipment costs).
Mileage
Compared to 2020, the number of overall loaded miles increased by 5,000 miles last year for leased-on owner-operators and fleet owners, as well as those pulling flatbed and refrigerated trailers. In contrast, Independent Contractors (IC) reported 12,000 fewer loaded miles compared to the previous year with only 26% of members stating their loaded miles grew in 2021. Loaded miles averaged just under 99,000 last year while unloaded miles were up 8% y/y to 16,600. Reefer carriers drove the most loaded miles at 136,500, a 12% y/y increase, while owner-operators under their own authority drove the fewest (74,400).
Load acquisition, rate negotiation, and factoring
According to the OOFI survey, the vast majority (78%) of respondents do not use a factoring service, however, those members with their own authority who use brokers and load boards to obtain freight were more likely to use factoring services. Most of those respondents who attempted to negotiate their rate were able to receive higher compensation (65%). This was especially true for fleet owners (82%) and those pulling flatbeds (81%) and refrigerated trailers (78%). Moreover, those participants who made some attempt to negotiate their rates earned more per mile and more per trip than those who never made the attempt.
While fleet owners typically build direct relationships with shippers and receivers, those under their own authority primarily utilize load boards. Both fleet owners and owner-operators under their own authority acquired a majority of their freight through load boards and brokers as opposed to through contracts with shippers and receivers. The OOFI report noted that while load boards have become highly popular over the past few years, the use of digital load matching increased from 4% to 7% of survey respondents last year.
2022 outlook
Despite the volatility in the freight market throughout 2020 and 2021, the health of the freight market will depend largely on a few factors, including inflation, global trade, and ongoing capacity constraints due to supply chain disruptions and component shortages. Overall, the outlook is positive and data from the survey creates a picture of a freight market ready to continue strong into the first half of 2022.
