Fuel for Thought

Rise Of The O/O ?

By Greg Huggins
Posted Jun 5th 2017 6:27AM

What does the future hold for Fleet Owners(FO)? When the economy is down, fleet owners are an easy, and cost effective way, for drivers to get in the seat, but when the economy starts to move forward, drivers may find ownership more attractive. Recently our economic outlook has started to look up, something it has not done in quite a while. With this upturn comes the optimistic driver who may now want a bigger slice of the revenue pie and leave their fleet owners for greener pastures.

Fleet owners in recent years has seen a surge in their numbers of both drivers and trucks, and have grown to meet the demand, but if drivers start leaving to become owner operators, what happens when the fleet owners’ trucks start to sit idle for lack of drivers? Furthermore, what happens to the carriers who rely on these large to very large fleet owners to keep their customers freight moving?

Fleet owner trucks with drivers in a good economy

Fleet owner trucks with drivers in a good economy

Obviously there are many different scenarios that can come to fruition. For one, the carriers who have become dependent on these large fleet owners can revert back to the new influx of owner operators, who by the way, will also have the experience to get the job done, leaving the fleet owner with a lot of assets (trucks,offices,etc.), and dwindling income to cover those expenses. If this were the case, there would also be a large number of used trucks injected into the market as fleet owners try to reduce their expenses, thus possibly depressing the used truck market, much like when owner operators were losing their trucks as the economy kept diving down deeper.

Another possible avenue for the large fleet owners might be to just decide to become a carrier themselves and transition their current drivers to company drivers or owner operators, selling their equipment to the drivers, possibly as lease-purchase deals, and cutting out the carriers that are so dependent on them, all while reducing equipment expenses and moving some of the risk onto the owner operators.

Everything run in cycles. Our economy is no different and neither is our industry. Is the cycle of mega fleet owners about run it’s course? If the economy continues to go in the the direction of prosperity, then possibly. I don’t see them going away entirely, but maybe there will be fewer of them or the mega fleet owners might shrink down a bit without a contingency plan for a growing economy.

I have seen our industry change a lot over the years, yet we still endure. Neither DEF, SCR, CARB, ELD or even CDL can stop determined owner operators from succeeding, but a down economy for a long period of time can break them. That was when the fleet owners saw an opportunity and seized it, but with the possibility of the economy coming out of it’s long slumber, the tides may have turned back in favor of the owner operator.

Where do you see our industry headed?

 

See you down the road,

Greg

GHuggins028@gmail.com   

2 Comments

  • johnmueller - June 6
    Many great points Greg.
  • Greg - June 7
    Thank you John.

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