Article

Owner-Operators: 
Today's New Breed

June 2012, TruckingInfo.com - Feature

by Deborah Lockridge, Editor in Chief and Jim Park, Contributing Editor

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There are three kinds of people in this world: those who make things happen, those who watch things happen and those who wonder what happened. The recent recession culled many owner-operators from the latter category.
Availability can often trump price on critical parts for many owner-operators, who don't have many options for backup if the truck goes down while under a load.
Availability can often trump price on critical parts for many owner-operators, who don't have many options for backup if the truck goes down while under a load.


The result is an industry with fewer, but smarter and more demanding, owner-ops - about 28% fewer, according to reliable estimates. Today's successful owner-operators, those who survived the great purge of 2008-2009, tend to be more business-savvy.

Many have shed the cowboy mentality and are taking the business of trucking seriously. Better business skills got them through the recession, and they are now starting to reap the benefits of being among the last bunch standing.

These owner-operators are looking to get more out of the business, says Joe Rajkovacz, director of regulatory affairs at the Owner-Operator Independent Drivers Association. "They have a better handle on their costs, and they are a lot pickier about who they'll partner with."

Many of them have moved to hauling with their own DOT authority rather than relying on being exclusively leased to a larger carrier.

"Even during the depths of the recession, our Business Services department was doing a roaring trade with owner-
operators wanting to set up their own operation," Rajkovacz says. "On top of the number of motor carriers that are pushing their owner-operators in that direction to protect their CSA SMS scores, we have seen a huge increase in the number of individual filings over the past few years."

The level of technical sophistication of the owner-operator population has increased along with the availability of information about rates, costs, etc., says Noel Perry, managing director and senior consultant with FTR Associates.

"If you're a smart and tech-savvy owner-operator already, you're finding it a lot easier to stay ahead of the curve today," he says.

While fuel prices are a concern, many owner-operators today are more likely to run fuel-efficient specs such as wide-base single tires and trailer skirts.

For independent parts distributors and service providers, these owner-operators can be a major source of business.

"A good portion of our business is what I call either owner-operator or small fleet, less than 10 trucks," says Tom Pratt with Penn Power Group, a member of the WheelTime Network. "Most of those people are not going to buy in large quantities; they have no shop or a small shop and a physical inability to stock the parts."

Up-front price vs. 
long-term value

Price, of course, is an important factor as these small-business truckers work to control their costs - but so is reliability and availability.

Tony Huttenstine II, a flatbedder leased to Minnesota-based Long Haul Trucking, says although he typically buys parts through Long Haul's shop or Peterbilt dealers, "I'll buy virtually anywhere a guy can get a deal." At the same time, he says, "I try to stay with bigger brand names, mostly for warranty issues."

Owner-operators really have been squeezed by the recession and are being squeezed even more now that fuel is getting expensive, says Marc Karon, president of Florida-based parts and service provider Total Truck Parts and president of Commercial Vehicle Solutions Network.

Owner-operators seem to fall into two categories, Karon says, "one that is always looking for the best price and the other that has had a bad experience with will-fit and will only use brand. Some of the latter will only buy U.S.-made products even if it has a strong brand."

Karon notes that owner-operators and other customers worry less about reliability when they have fewer dollars to spend, unless you can prove a short-term value advantage in the higher-priced item. During better economic times, customers are more willing to look at a long-term value advantage against price.

"In the past few months, our business has been strong at the O-O level because they were getting busier and did not have the time to drive all over the area to find the best deal," Karon says. "Now that business is slowing again, we are seeing more of them going to companies that offer cheap parts from wherever."

Karon says it hasn't helped that the recession also saw cuts in marketing and promotion at the supplier level. "Most customers, whether fleets or O-O, want the best value, not the lowest cost," he says. "These truck owners are extremely knowledgeable and network with others. When suppliers fail to create the positive value proposition argument, then they see no reason not to go for the lower cost. The danger in this comes when the will-fit product actually does perform well. In these cases, you cannot get the customer to come back to the brand."

Tom Workman, owner of New Life Trans, Macungie, Pa., buys most of his parts through his local Kenworth dealer, but he picks and chooses based on his own research.

"If I have had an issue of brake linings failing prematurely, for instance, I will research on my own, mostly by word of mouth, a better brand and either purchase them from the manufacturer or different supplier or request them from the KW parts guy.

"It is evident that many parts counters are pushing 'their' suppliers' bargain parts, so it really pays to insist on what you want for long-term quality and endurance."

I need it now

Availability can often trump price on critical parts for many owner-operators, who don't have many options for backup if the truck goes down while under a load.

Kasey Martinson, Kasey Martinson Trucking, Hebron, N.D., has long worked with his dealer on parts, but lately he's frustrated by delays.

"They need a parts warehouse in the upper Midwest somewhere," he says. "This is getting ridiculous waiting a week for parts. Parts I ordered the other day were on a stock order that would take a week. I had the option of shipping it by air freight, which is $40 to $50 more.

"Trucking is a time-sensitive business. We can't afford this."

Dan Zien owns four trucks, operating under the name Professionals Offering Safe Transportations Solutions (POSTS) in Indianapolis.

"When one of my trucks is down for repairs, the cost of the part is secondary to the availability," he says. "This is a case where 'time is money.' This is where a good relationship with the parts supplier is very important. Many times a supplier has gone out of their way to search other suppliers for an item to be shipped overnight. This is not only good business but good customer service."

Owner-operators also often look for a good service partner, as today's more complex trucks mean repair is rapidly getting beyond the ability of the shade-tree mechanic.

"As a result, our shops are very busy," Karon says. "Because our shops are so full, getting priority service is an issue for many truck drivers," he says. "They recognize that their business level gives them leverage to get priority service, so that does draw them to the parts department for items like filters and lights. However, for expensive items like power steering units or major engine components, they will drive or call around for price."

Or turn to the Internet.

Tech-savvy

Owner-operators increasingly go online to compare prices, find local dealers or parts services and even buy parts.

On-Ramp Transportation Services, which offers business-related services and online training for owner-operators through its subsidiary, Equinox Owner-Operator Solutions, has done surveys that show more than 50% of owner-operators and drivers now have laptops or mobile devices.

Dealers, parts distributors and original equipment makers offer online catalogs, parts-finding services and apps. You can even buy Navistar Parts on Amazon.com.

River City Truck Parts, Louisville, Ky., sells diesel engines and parts through its website, 
www.rctpinc.com. The website features online specials, a shopping cart for dealers to buy

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