Pros and Cons for Major Carriers Using Owner Operators Rather Than Employee Drivers?

When I was working for a unionized company a few years ago, the company thought it was way better and they were savng money I was told by Management then. Larger Carriers along with some smaller one look at the wear & tear factors pinching the dimes & nickels on saving cash expenses. When looking at it on a larger scale, those dimes & nickels turn into hundreds of thousands of dollars with longevity.

 

Hire an owner operator: it's his problem to fix the truck. You can also fire them without cause since it's a business hiring a business not an employer/employee relationship. You do not need to deduct payroll taxes, workers comp, any of that. Your expected profit for moving loads may be smaller than using a company driver/truck, but your risk is lower as well. The money in owning equipment is in the trailers. Trucks cost you money. Problem is without trucks trailers are useless.

 

Using owner/operators allows flexibility as well. When freight is slow you are not carrying company drivers who are not being worked and not getting paid. Simply don't run the owner/operator.

Where I work, we have a handful of linehaul drivers for the priority and customer sensitive loads. We are paid top dollar and other than myself (recent new hire), they have been here years.when it's slow we run all the freight and the owner/operator doesn't get called. Keeps company drivers happy and no staffing issues from guys getting no or low pay.

Anything and everything else we use owner/operators.

 

My company is a medium size van LTL company, with terminals across Canada (300 trucks, 700 trailers).

The majority of our highway trucks, are leased on O/Os. They seem to work out better than company highway trucks, as guys take better care of their own equipment, and tend to be more professional. Also if they breakdown far from home, they do a better job of getting going again, compared to company drivers. (I would say highway, we’re 25% company trucks and 75% O/O, all of our LCV trucks are O/O)

Local/City is the opposite, the company guys do a much better job, and the O/Os drag ###, run scrap metal trucks, constantly #####, are always trying to hire guys to drive their trucks, trying to steal fuel when no one is looking etc etc. 75% of our local guys are company, with 25% O/O. There are talks ongoing, of moving to 90% Company Daycabs, and only 10% local O/O.

ABL O/Os (GRH, Dawn Gordon, XXX/A1 etc etc) get used to scale local and regional capacity. 99% of the time, they do power only, pulling our trailers/freight. We try to avoid using them as much as possible, as they cause a lot of claims/damage/pissed off customers. But they’re only a call away, for one low low price, with 0 commitment.