Posted on 01/26/22

Importance Of Auto Transport Owner Operators

Importance Of Auto Transport Owner Operators

Owner-operators of auto transport are an integral part of the industry. Owner-operators are a crucial piece of any logistics-based industry. They can also work as contractors with larger fleets to secure regular freight. There are also many mom-and-pop businesses that have a truck, driver, and sometimes dispatcher back home.

They are important, regardless of whether they own an open-air auto transport truck or an enclosed caravan, a flatbed truck, or a hotshot pickup truck. Move Car works with both fleets as well as independent owner-operators to move customers' vehicles.

We're going to tell owners-operators how important auto transport is in the wake of a bill that was introduced in California.

Here's a quick overview of fleets and independent owner-operators

Fleets are the norm in many logistics-related industries. Knight Transportation and other big brands are everywhere on this nation's roads and highways. Big fleets take in more freight and are able to make more.

Despite not knowing it, there are many independent owner-operators out there. This is particularly true in the car transportation industry where independent owner-operators are more common. While there are many reasons why this is so, most of them have to do with the way that freight is handled and transported.

A typical Joe who wants to ship his car does not go directly to the carriers. They use brokers like us to hire transporters on their behalf. This is how the auto transportation process works. We force carriers to compete, which helps keep prices down.

This is not common in other industries that transport other types of goods like groceries. Of course, brokers are not uncommon in other industries. Although they are often called "freight forwarders", they are still brokers. They only move different types of freight.

In other industries, however, fleets have greater control over their freight and contracts. A carrier fleet might transport furniture for a large furniture manufacturer. This means that a significant portion of their freight is moved through one company.

This is how the car shipping industry works. Regular people who ship cars need to know that there are hundreds of places they can go. Independent owner-operators are even more important because of this.

California's bill that puts owner-operators at risk

The bill, AB-5, would prohibit motor carriers from hiring independent owner-operators to perform tasks that are part of their core business. A fleet such as Knight wouldn't be allowed to hire an independent hauler for some of its freight.

This practice is very common across the country. California has a problem with owner-operators taking breaks and adhering to standing regulations. California argues that owner-operators should be considered full employees of trucking companies. They would be required to take mandatory breaks at regular times and their pay scales would need to change.

This is a complicated and difficult situation. It is partly due to companies that lease trucks to operators on bad terms, which essentially render them indentured servants. This can pose a problem for independent truckers. The other issue is that employees in a fleet can be classified as contractors to get around certain pay and breaks requirements.

Although it's complicated and unlikely to be resolved soon, AB-5 could do more harm than good. Swift Transportation, one of the biggest companies in the country, has stopped working with independent owner-operators in California. It's likely that more companies will follow the lead and leave many people who depend on larger transport companies without access to freight.

What this bill could mean for the auto transport industry

Car shippers might not feel the same effects due to the industry's nature. It could lead to some owner-operators moving into an industry that allows them to be owner-operators.

There aren't many fleets currently in the auto shipping industry. Sure, there are a few and some very large ones. If I'm not mistaken, most transport fleets have their trucks and do not lease from other independents. Because there isn't an excessive amount of freight, they keep it in-house.

It would be difficult to lease freight from a broker to an owner-operator. A truck driver would be required to be available for dispatch and the fleet would need him. Dispatchers are usually only concerned with their trucks and not looking for other drivers to transport the freight they have booked. This is just not how it works.

It's mostly because of the existence and work of our brokers. We do not own our trucks, we work with other trucking companies to transport our freight. It is a violation of the terms and conditions for the dispatch that they would contract with another company.

This could also have long-lasting ramifications on larger fleets who operate as though their trucks are all independent contractors. While I am not saying they do, I do not know as I am not employed by a company that has its own trucks. This is speculation.

Imagine a company that has 25 trucks. If the contracts they have with the driver's state they're not employees of the company, but independently-contracted shippers, this bill could definitely affect them.

Auto transport owner-operators are vital

Fleets would be the dominant industry if they didn't have independent owner-operators. Because they have so many trucks and can refuse the freight, large fleets hold a lot of power over brokers. Carriers will often refuse freight if the price is too low. Because of their lower overhead, independent owner-operators can often take freight that the fleets won't accept.

Sometimes, the reverse can be true. Fleets may be able to take freight at lower rates due to having more trucks. Profits are still possible when all these factors are considered. Owner-operators are more likely to take freight at a lower rate if their trucks are full.

However, this doesn't mean that running an auto transport truck is inexpensive. They are a great help to brokers in moving freight that isn't as appealing to fleets.

This is especially true on unpopular routes. Major routes are the preferred route for most fleets. Chicago is home to one of the biggest car shippers, and all their trucks travel on major highways. They do not service Montana, Wyoming, or Maine. Independents do.

The industry would not be the same without owner-operators of auto transport. It would be more difficult to transport freight and the prices would likely rise as a consequence. Without them, the industry we know might not exist. Although the bill in California might not affect independent trucks in the auto shipping industry, it will likely have a significant impact on the industries that it affects. This will likely make it more difficult for people to make a living and work in the same way they are now. It's a shame.