A struggling freight market is squeezing owner-operators out of the trucking industry, the Owner-Operator Independent Drivers Association Foundation concluded in a survey released last month.
Fifty-four percent of the Freight Rate Survey’s respondents reported a negative forecast for 2023, citing concerns such as high fuel costs, increased regulation, inflation, overcapacity and a cooling economy. More than 300 OOIDA members responded to the 35-question survey, which the association sent to members on Dec. 1.
One owner-operator told the association their business would not make it another two months at today’s spot rates.
“I will not drive at a loss or to break even and do nothing more than add miles to my equipment and expose myself to the inherent risks of driving,” the driver told the association. “I own my equipment, I have no payments, and I am still struggling to survive.”
Large fleets are better able to absorb costs, operate at or near a loss and negotiate discounts, and they can underbid single-unit operations to win contracts, the owner-operator said.
The industry is hoping for a resurgence of demand in the spring, with spot rates expected to rebound later in the year. Those owner-operators who are able to stay in business stand to benefit from any exodus of competitors from the market, which would help tighten capacity and push up rates, the survey noted.
Fifty-six percent of respondents — a 10 percentage-point increase from last year — told OOIDA they planned to make changes to their businesses in 2023. Several owner-operators who operate under their own authority expressed interest in forgoing their authority and leasing their truck on to another carrier or selling it altogether.
Others reported they are considering switching out their equipment, operating more regionally or in different lanes, or working to establish direct contracts with shippers, OOIDA said.
Inflation, consumer spending, the housing market, industrial production, manufacturing activity and fuel costs — along with trucking capacity — will all play a role in how and when trucking demand recovers, OOIDA said.
“Much of the freight market will hinge on these important factors,” the association said in the report, adding that members might consider “consolidating their business, changing operations, or perhaps even obtaining their authority or purchasing another truck in order to expand their scope of operation.”
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