Smaller Carriers Filling Gaps

Smaller truck fleets and owner operators are stepping up to fill some gaps left by larger truckload carriers who have trouble filling seats in certain long-haul lanes. It won’t cure the capacity crunch, but it could help.

A recent discussion hosted by equity analyst Stifel Nicolaus looked at the small fleet and owner operator segment and found that 87% of truckload carriers operate six or fewer trucks. That is unlikely to change, but those carriers could lose some market share.

Long-haul truckload tends to be concentrated with larger carriers, says Stifel Nicolaus, and shorter haul, more localized segments with smaller carriers. The top eight carriers (in terms of revenues) handle 23% of longer haul traffic but only about 8% of local traffic. But those larger carriers also experience some heavy turnover among drivers, causing them to pull out of some of the longest haul lanes and focus more on regional, dedicated and intermodal drayage.

Smaller carriers are stepping in to take up some of the slack in the longer hauls, but they face significant challenges in fuel costs because they are less able to recover those costs through fuel surcharges.

Another trend the Stifel Nicolaus report pointed out was an increase in the number of owner operators applying for their own operating authority. These carriers, it says, were operating under the authority of a larger carrier. With a large number of late-model, used tractors on the market due to the pre-buy to avoid 2007 engine requirements, the small carriers could have a good opportunity to expand their fleets.

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