Little big guys: Owner-operators represent a big chunk of capacity – even among fleets
Fleets get the attention in the marketplace these days — at least from a supplier’s perspective. Everyone wants to know what component or gadget they can market to Schneider, Swift or Wal-Mart. Sure the margin might not be what it is when selling to the little guy, but the volume is irresistible, and the implied endorsement of a trucking leader is invaluable.
Retailers of parts and service, though, have a completely different view of the market. The Schneiders, Swifts and Wal-Marts typically are not really their customers. Those fleets usually have direct sales relationships with the supplier. Local stores and shops might be the day-to-day distributor of parts and service to those customers, but they likely are filling this role without much margin.
For parts and service providers, the core customer usually is the little guy. If you listen to the so-called pundits, that’s a problem because the little guy supposedly is going away.
But there are some serious flaws in this argument. For starters, the fleet market isn’t just the over-the-road freight hauling segment. Odds are many of your customers are local, vocational or medium-duty operators — businesses that look as much like Schneider National as a Ford F-150 looks like a Freightliner Cascadia.
But even if you consider just the market that analysts really have in mind when they talk about the death of the owner-operator or small fleet, the argument overlooks some important points.
Yes, it is true that fleets operating 100 or more power units — about 0.6 percent of all fleets — own or operate 44 percent of the power units, according to Randall-Reilly’s RigDig Business Intelligence. But let’s not ignore the flipside: Fleets with fewer than 100 power units own or operate 56 percent of the power units.
And let’s look at that 44 percent. It represents power units that are either owned or operated by a fleet. In the for-hire trucking segment in particular, the “or operated” portion of a fleet usually means the truck is provided by an owner-operator or smaller fleet.
While the carrier that has leased the equipment may conduct maintenance on that truck, by law it cannot force the truck to be maintained at its shops. And in most cases, owner-operators don’t use their carriers’ maintenance facilities, according to Randall-Reilly’s ongoing research.