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Employment Challenges Facing the Trucking Industry in 2021

Employment Challenges Facing the Trucking Industry in 2021

The COVID-19 pandemic continues to highlight the sheer importance of long-haul drivers in the United States as record unemployment in the trucking industry leads to disruptions in supply chains nationwide. Namely, these unemployment rates resulted in a critical driver shortage in the industry, forcing carriers to increase their spot rates. According to Business Insider, when carrier rates increase, retailers tend to pass the transportation costs down to consumers. During the last driver shortage, Amazon raised their Prime membership price by $20. Clearly, a driver shortage affects more than just the trucking industry. 

As we move forward in 2021, the trucking industry needs to address the long-lasting challenges presented by the COVID-19 pandemic in order to improve driver employment levels and avoid further turmoil. 

Where did all of the Truck Drivers go?

One of the main factors leading to the shortage of long-haul truck drivers is the global economic recession. At the height of the COVID-19 pandemic, the trucking industry saw record unemployment rates, with over 88,000 jobs lost in April alone, according to the Bureau of Labor Statistics. While unemployment rates have improved since April, the U.S. unemployment rate currently hovers around 6.7%—the highest it’s been in years. 

Some carrier companies have since closed down their operations permanently due to decreased demand and increased driver costs. Government-mandated social distancing measures imposed on those remaining carrier companies negatively impacted productivity and further limited the need for truck drivers. 

Increase in Unemployment Benefits

Due to the drastic increase in unemployment, the United States government passed legislation that increased unemployment benefits and provided stimulus payments for Americans. Many older drivers decided to protect their health by accepting the unemployment benefits, rather than travel the country and put themselves at risk of infection. 

For a while, the increased benefits actually provided unemployed drivers with nearly comparable salaries to what they would be making while fully employed, disincentivizing them from returning to the workforce right away. Hundreds of owner/operators even received federal PPP loans to keep them afloat without having to work during the pandemic. As for what’s next, President-elect Joe Biden has his own plans for economic relief packages, including a boost in unemployment benefits that will certainly impact the trucking industry. 

Early Retirement

Not only is the pandemic responsible for widespread unemployment throughout the trucking industry, it also pushes many older drivers to cash in on their retirement early. According to a study published by the National Center for Biotechnology Information, long-haul drivers are an especially high-risk population, stating, “The unique co‐occurrence of pronounced health disparities and known COVID‐19 infection, morbidity, and mortality risks suggest the possibility of a novel COVID‐19 based truck driver syndemic due to advanced driver age and endemic health issues.” Many older truckers decided to protect their health and retire early amid pandemic fears, and it will take a new incoming group of truck drivers to fill the vacancies. 

CDL School & DMV Closures

COVID-19 forced many small businesses to shut down, both permanently and temporarily. CDL schools across the country have had to close their doors, significantly impacting the ability of prospective new drivers to obtain their CDL. Further complicating matters is the fact that at the height of the pandemic, over half (27) of states closed their State Driver Licensing Agencies (SDLA) while the remaining 23 states operated at limited capacity, severely slowing down processes. 

The pandemic has had such a great impact that the Commercial Vehicle Training Association (CVTA) proposed governors “enact executive orders to recognize CDL training schools and SDLAs as ‘essential services’ while also granting the Secretary of Transportation temporary authority to also administer CLP or CDL testing due to SDLA closure.” CDL school and SDLA closures also put a pause on the training and licensing of an estimated 25,000 to 40,000 new drivers. Many states and localities continue to impose their own restrictions and lockdowns, making it difficult for new drivers to obtain their CDLs and join the depleted workforce. 

The Drug and Alcohol Clearinghouse

In January 2020, the government made it mandatory for all long-haul drivers to report to the Drug and Alcohol Clearinghouse for centralized management of driver substance abuse records. Any drivers violating the DAC’s substance abuse policies are immediately removed from the road, and their infractions are documented for five years for current and future employers to access. Drivers can return to the road upon completion of proper DAC return-to-duty protocol, including meeting with a substance abuse professional. 

In 2020, the DAC removed more than 50,000 drivers for substance abuse infractions; less than 10% of “early violators” have returned to the workforce. This means the trucking industry can expect to lose around 50,000 jobs annually due to substance abuse, which would be a huge burden on supply chains across the country. 

The trucking industry has been hit hard by COVID-19, experiencing record unemployment rates and a driver shortage across the industry. Along with other repercussions, carrier companies now face difficulties finding and retaining high-quality drivers, leading to disruptions in supply chains. In order to minimize costs and keep the industry afloat, there will have to be new, innovative ways to attract quality drivers and meet the growing transportation demand.

What Does the New Administration Mean for the Trucking Industry?

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The start of 2021 comes with a new presidential administration in the United States as President-elect Joe Biden takes over as commander-in-chief on January 20. A change in national leadership is certain to have an impact on businesses and industries across the country; many wait with bated breath to see what changes the new administration ushers in. 

The trucking industry is no different. After a year of pandemic-induced economic recession, some owners/operators are hopeful new leadership will return the economy back to pre-pandemic levels while others are wary of how their day-to-day lives will differ with a new president. At the moment, there are three significant issues in the trucking industry that could be affected by a new administration: America’s infrastructure, clean energy, and labor laws.

Rebuilding America’s Infrastructure

The president-elect has made it clear his administration plans to work toward rebuilding America’s infrastructure countrywide, including the roads and bridges that support the economy. According to trucking.org, when the House of Representatives met in 2020 to discuss the Invest in America Act, Bill Sullivan, the Executive Vice President of Advocacy for the American Trucking Associations (ATA) argued that “an injection of real capital into our degraded infrastructure will jumpstart the economy—creating hundreds of thousands of good-paying, private-sector jobs in blue-collar trades—and strengthen its commercial arteries to support long-term growth.” 

Biden and the Democrats’ Senate majority (due to Vice President-elect Kamala Harris’ tie-breaking vote) could push legislation through that would invest billions of dollars into rebuilding our country’s infrastructure. The improved roads would benefit the trucking industry in the long-term, possibly saving billions of dollars; the American Transportation Institute estimates critical bottlenecks caused by poor infrastructure cost the transportation industry more than $74 billion annually. While improving the infrastructure is a great idea, the amount of construction required for the process would inevitably lead to more critical bottlenecks on driving routes—likely for a number of years. 

Pushing Clean Energy

Clean energy has always been a point of contention within the trucking industry. Many drivers want to protect the environment, but legislative proposals to do so typically come at a great financial expense to owner/operators who would have to purchase new “green” trucks. Biden has already stated he plans to “put the United States on an irreversible path to achieve net-zero emissions, economy-wide, by no later than 2050,” which could mean electric vehicles for the transportation industry. 

Going to net-zero emissions could have repercussions for the trucking industry. A major benefit is that electric trucks cost about 20% less in operating expenses compared to diesel trucks. The glaring downside, however, is the upfront costs for an electric truck are sizable. There are currently almost two million semi-trucks on the road today, which means an investment of over $300 billion just to purchase new electric trucks for the entire industry. The transportation industry will want to keep a keen eye on the future of Biden’s clean energy plan. 

Changing Labor Laws

Another major difference to expect with the transition of power from Republicans to Democrats is a change in federal labor laws. The Biden administration is likely to put a pause on a recent Department of Labor rule that clarifies who is classified as an independent contractor and who is classified as an employee. Biden has also voiced plans to raise the minimum wage to $15 an hour. While this may not directly impact the salaries of drivers, it may increase the salary of non-driving employees in the industry, and carriers may reflect the increased expenses on drivers’ rates. 

The Biden administration also strongly supports the adoption of the Protecting the Right to Organize (PRO) Act, which “provisions instituting financial penalties on companies that interfere with workers’ organizing efforts, including firing or otherwise retaliating against workers.” The PRO Act would make it easier for truckers to unionize and bargain collectively. A final labor-related proposal from the Biden administration gives every employee 12 weeks of paid family medical leave mandated by the United States. Providing 12 weeks of paid family medical leave could impact the trucking industries if we see the expenses passed down from carrier companies. 

As the new year begins with a shift in leadership, the United States continues to battle a pandemic and economic uncertainty, both of which have impacted the trucking industry. With President-elect Biden entering the White House, the next four years will likely bring about several notable changes across industries. The trucking industry, specifically, needs to be prepared for how these changes—in infrastructure, clean energy, and labor laws—will reshape the landscape of the transportation industry in both short-term and long-term ways.

4 Industry Trends to Watch in 2021: The Rise of New Technology in Transportation

Mercedes Future Truck

As the coronavirus took its toll on the world in 2020, some industries—like the hospitality sector—were deeply impacted as government-mandated restrictions and virus-related fear prevented restaurants and bars from operating at maximum capacity. E-commerce, on the other hand, saw an enormous surge in demand with companies like Walmart and Amazon seeing record levels of revenue during the pandemic. The trucking industry, too, was not insulated from the impact of the pandemic. Large numbers of jobs lost and new challenges on the roads forced the industry to quickly adopt innovative new technologies in order to overcome the impact of the pandemic. Here are four technology trends emerging in the trucking industry that owner/operators should keep an eye on in the coming months.

1. Autonomous Vehicles

Almost straight out of a science-fiction movie, autonomous—or self-driving—vehicles are becoming a reality as manufacturers like Tesla begin producing more autonomous consumer vehicles. The trucking industry has become an early adopter of autonomous technology for their freight shipments due to an increased demand for shipping and a shortage of long-haul drivers—caused by economic instability and the tough nature of the trucking industry. Autonomous trucks manufactured by Waymo are already in use on the roads today in California, Arizona, New Mexico, and Texas, and Waymo has plans of expanding into more states in the future. Proponents of autonomous vehicles argue that self-driving semi-trucks will eliminate human error behind the wheel, lower costs of shipping, and increase efficiency across the board for trucking companies. There is some trepidation about turning toward autonomous vehicles; some worry about accidents caused by self-driving trucks while others worry about the loss of critical jobs due to the addition of autonomous vehicles. If companies begin turning toward utilizing their own autonomous vehicles, it could have a negative impact on the number of available trucking jobs. 

2. Smart Technology

Another important trend to watch out for in 2021 is the use of new and improved technologies to optimize the efficiency of long-haul shipping. Smart technologies on trucks improve safety for lane departure detection, lane keep assist, assisted braking, tire pressure monitoring, and even load stability. Furthermore, logistics companies are utilizing new technology for enhanced tracking and reporting to minimize human error and to have a better grasp of where their freight is at all times. The improved tracking is beneficial for planning when truckloads can be dropped off and picked up, as well as for providing customers with accurate updates. Alongside this technology, owner/operators can use new technology to locate cargo while on the road to reduce the amount of time spent on the road with an empty truck. With freight matching technology, drivers can ensure their trucks are always full and they are maximizing revenue capabilities at all times. 

3. Data Analytics

Data analytics has made its way into pretty much every industry, from marketing to manufacturing to the trucking industry. Owner/operators use analytics to capture important data pertaining to their cargo, their trucks, and their routes; using this data, they can make valuable improvements to their performance, thus saving time and money and even helping them to drive more safely. According to Transmetrics, one study conducted by Supply Chain Management World found that “64 percent of executives think that big data and the insights it brings will have a disrupting power that can pivot the industry forever.” Data analytics also provide valuable insights into freight markets that help owner/operators uncover trends and patterns in the industry to pinpoint new opportunities and improve existing ones. 

4. Electric Trucks

Electric trucks are making their way into the freight industry. Tesla already designed an electric semi-truck that can travel almost 500 miles on a single charge, and in 2019, Neuron EV released the TORQ, a fully electric semi-truck. With rising fuel costs, electric trucks can save owner/operators money in the long-term, improving their overall bottom line. Additionally, electric semi-trucks are much better for the environment, and companies have begun employing electric trucks to lower their carbon footprints. While electric trucks will not be replacing your entire fleet right away, they might eventually as states like California begin passing legislation to crack down on carbon emissions produced by the trucking industry. 

As truckers begin preparing for 2021, it’s important to embrace the new technologies that are changing the long-haul industry for the better. While the trucking industry isn’t going anywhere, we’re seeing the emergence of new technologies that can benefit both drivers and carriers. Autonomous vehicles, smart technology, data analytics, and electric vehicles are reshaping the modern trucking industry, making the job easier, more accurate, and safer along the way.

3 Mistakes Every Owner/Operator Should Avoid

3 Mistakes Every Owner/Operator Should Avoid

Starting out as an owner/operator can be a difficult and complex endeavor. Purchasing the right long-haul vehicle, learning standard practices and procedures of the industry, and understanding how to file your taxes properly are just a few of the challenges rookie truckers face early on in their careers. This means drivers need to be aware of the pitfalls that often plague owner/operators, costing them time, money, or overall safety.

Here are the top three mistakes to avoid as an owner/operator.

1. Thinking It Will Be Easy

The decision to become an owner/operator can be done for a myriad reasons, but one of the worst cited reasons is because “it’s easy.” It’s not. To begin with, CDL training is not like getting a regular driver’s license; there are far more rules and regulations you must adhere to on the road. Furthermore, the training courses can last for up to 12 hours a day, five days a week, for three weeks depending on which state you get your license in. The test at the end of your training course covers general knowledge, combination vehicle types, exterior vehicle inspection, and even a test on air brakes. Drivers must also provide proof they passed a physical health exam or they will not receive their license.

It’s not just the licensing process that is difficult, either. Life on the road for a long-haul driver is tough, logging 11 hour days behind the wheel for days on end. Drivers must be cautious of other motor vehicles around them as well as driving conditions along their route. When stopped for a break, truckers must be cautious when leaving their truck and make sure their load, as well as their personal safety, is intact. Being a long-haul driver is difficult and can be dangerous, but if you maintain safe practices and stay cognizant of your surroundings, you’ll find success.

2. Neglecting Your Health

Another mistake novice drivers make is neglecting their health. The CDC has found that long-haul drivers are at an increased risk of dangerous health issues, including obesity, heart disease, high blood pressure, and even diabetes. These health issues are usually due to an unhealthy diet combined with an unavoidable sedentary lifestyle. Physical health issues aside, the isolation from being on the road for days—if not weeks—can impact a driver’s mental health and emotional well-being. Long-haul drivers suffer from higher rates of depression, anxiety, and even suicide. Protecting your mental health while on the road is especially difficult since there is a general lack of human connection for the vast majority of your time working. To combat these issues, some drivers perform calisthenic exercises at rest stops to improve their physical health and use hands-free technology to connect with their loved ones while on the road.

3. Ignoring Safety Practices

One of the worst mistakes truckers make is ignoring safety practices. Whether that be forgetting to perform an exterior inspection of the vehicle or driving for longer than the legal limit, ignoring safety practices is a surefire way to put yourself or others in harm’s way. Safety protocols are typically in place for a reason, and in the trucking industry, those reasons are serious. A semi-truck in the United States can have a maximum load weight of 80,000 pounds, which is not to be underestimated; a truck weighing 80,000 pounds traveling at a speed of 2 miles per hour has the same momentum as a 4,000-pound SUV traveling at 40 miles per hour. If a driver fails to perform a vehicle inspection prior to hitting the highway and has a blowout while traveling 70 miles per hour, the results could be cataclysmic.

Safety practices don’t just pertain to the vehicle. Drivers need to follow proper safety protocols when it comes to their rest and health. A tired driver is a dangerous driver, and it only takes a fraction of a second for something to go wrong. At 70 miles per hour, a vehicle travels over 100 feet per second, depending on the weather and road conditions. If an exhausted driver on their sixtieth work hour of the week closes their eyes for just one second, it could mean the difference between life and death for themselves and the people on the road around them.

Being an owner/operator can be an amazing and rewarding career for the right person. You get to travel the country seeing the beautiful landscape and meet new, interesting people in your industry. As you grow your owner/operator career, make sure not to let one of these three big mistakes have a negative impact on your profession or your life. Take your job seriously, protect your health, and follow all of the safety practices put in place. It’s that simple.

What’s the Difference Between an Owner/Operator and an Independent Contractor?

What’s the Difference Between an Owner/Operator and an Independent Contractor?

What's the Difference Between an Owner/Operator and an Independent Contractor?

The trucking industry keeps America moving, with more than 3.5 million professional drivers on the road. And with so many drivers, terms like owner-operator and independent contractor are used interchangeably, even though they mean very different things.

Understanding those differences matters. The path you choose shapes everything from your earning potential to how much freedom you have day to day.

Whether you’re exploring your first driving job or considering a shift into business ownership, knowing how each role works can help you make the choice that best supports your long-term career and income goals.

What Is an Owner/Operator?

An owner/operator is someone who both owns their equipment (or finances their equipment through a financial institution on their own accord) and operates their equipment as their career.

In other words, an owner/operator is “an independent contractor with a business attached to their name.”

Owner/operators have the ability to operate under their own authority, which means they can legally transport freight independently without a carrier company contracting them.

One of the upsides to being an owner/operator is that you get to keep all of the revenue generated for each haul. Because owner/operators own their trucks and function as businesses, they face more responsibilities than independent contractors.

Unlike many independent contractors, owner/operators are responsible for:

  • all of the maintenance and repairs on their trucks
  • the record-keeping for their taxes
  • the insurance for themselves as well as any other drivers they may employ
  • scheduling and planning out their pickups and deliveries

Leasing Options

Not all owner/operators are 100% independent, though. Some choose to lease onto a carrier company.

Leasing onto a carrier company means an owner/operator provides the company with a truck and driver in exchange for guaranteed steady workflow from the carrier company for the duration of the contract.

While this is a type of independent contracting, the driver still owns the truck and is therefore classified as an owner/operator.

However, owner-operators who lease onto a carrier operate under that carrier’s authority. Under Federal Motor Carrier Safety Administration (FMCSA) leasing regulations, that usually means the carrier controls the freight the driver hauls.

As a result, leased-on owner-operators generally cannot accept loads from outside brokers unless the carrier approves it.

White semi-truck on the highway delivering freight

Owner/Operator Pros

Owner-operators enjoy several leasing advantages that appeal to drivers who want maximum control and the potential for higher earnings.

  • Full control over freight choices (with own authority): Owner-operators decide which loads to accept and which lanes to run. This allows them to build routes that match their preferences and earning goals.
  • Higher earning potential per load: Since they keep full revenue, profitable lanes and strong business relationships can significantly boost income.
  • Ability to build equity in equipment: Owning the commercial truck creates an asset that holds value and can later be sold or traded.
  • Independence in business decisions: Everything from fuel strategy to maintenance vendors is under their control. As such, they have full authority over how their business operates.

Owner/Operator Cons

Despite the advantages, becoming an owner-operator comes with challenges and financial considerations that drivers should evaluate before committing.

  • High startup costs: Buying a truck or financing equipment requires capital, credit, or both, making the initial investment substantial.
  • Responsible for all maintenance and downtime: Breakdowns are expensive and can eliminate income while the truck is off the road.
  • More administrative and compliance work: Managing operating authority, insurance filings, and bookkeeping demands time and attention beyond driving.
  • Higher financial risk: Market fluctuations, unexpected repairs, and slow freight cycles can quickly impact profitability.

What Is an Independent Contractor?

An independent contractor is a driver who signs an agreement with a carrier company that will provide them with operating authority and guaranteed hauls for the duration of their contract.

In exchange for the operating authority and guaranteed hauls, independent contractors usually have to give a percentage of their earnings to the carrier as part of the contract agreement.

Furthermore, independent contractors do not necessarily own their trucks. They often lease the equipment from the carrier company that contracts them.

While leasing the equipment from the company is more cost-effective up-front, if the driver decides to leave the carrier, the truck stays with the company. So the driver is out of the money they paid to lease the vehicle during their time with the company.

Leasing Options

One major benefit to being an independent contractor is that contractors who are not in a lease-to-purchase agreement typically have less responsibility when it comes to the maintenance of the truck or any repairs that may come up during a haul, as the driver does not own the vehicle.

This is important because repairs on semi-trucks run anywhere between $13,000 and $16,000. And that’s without taking into account lost wages while the truck is off the road.

With this in mind, many novice drivers begin their careers as independent contractors until they are financially ready to branch off on their own.

Trucker standing in front of Cargo truck

Independent Contractor Pros

Independent contracting offers several advantages for drivers who want to enter the industry with fewer upfront costs and more support from a carrier.

  • Lower barrier to entry: Drivers can start earning without buying a truck. This makes the role accessible to newcomers or those waiting to purchase equipment.
  • Less responsibility for major repair costs: Carriers often cover large maintenance items, reducing unexpected expenses and helping contractors avoid costly downtime.
  • Predictable freight from a carrier: Contracted hauls provide stability and consistent work, which can be reassuring for drivers who want a steady income.
  • Good option for new drivers gaining experience: Independent contracting allows new drivers to learn the industry before assuming the full responsibilities of operating a trucking business.

Independent Contractor Cons

Independent contracting also has limitations that may affect income potential, flexibility, and long-term growth.

  • Less autonomy: Loads, routes, stipulations, and schedules are usually assigned by the carrier, reducing control over daily operations.
  • Lower earnings per load: A percentage or rate is retained by the carrier in exchange for authority, dispatching, and freight access.
  • No long-term asset if leasing a truck: Lease payments do not build equity unless the driver is in a lease-purchase program designed for ownership.
  • Schedule and freight controlled by the carrier: Limited flexibility can affect work-life balance, home time, and financial goals.

Key Differences Between Owner/Operators and Independent Contractors

Understanding the differences between owner/operators and independent contractors is essential for any driver evaluating their long-term career path.

While both roles fall under the broad category of self-employment in the trucking industry, the level of control, responsibility, earnings potential, and business risk varies significantly between the two.

At a high level, owner/operators function as small-business owners who operate their own equipment. Independent contractors operate under a carrier’s authority and often lease equipment rather than owning it outright.

Below is a breakdown of how the two paths compare:

Category Owner/Operator Independent Contractor
Truck Ownership Owns or finances their truck; holds full control and equity May lease a truck from a carrier or third party; may or may not own equipment
Operating Authority Can run under their own authority; can haul for any broker or shipper Must operate under the carrier’s authority; restricted to that carrier’s freight
Control Over Loads Chooses loads, lanes, and schedules independently Follows the carrier’s dispatch system and freight availability
Business Responsibilities Handles insurance, maintenance, repairs, bookkeeping, compliance, and customer relationships Carrier typically handles compliance, authority filings, and insurance filings; the driver focuses on hauling
Upfront Costs High initial investment (truck, insurance, permits) Lower barrier to entry; fewer upfront expenses
Maintenance Costs Fully responsible for all repairs and downtime Carrier may cover some or most repairs, depending on lease terms
Earning Structure Keeps 100% of freight revenue (after expenses) Earns a percentage of revenue or a mileage rate set by the carrier
Risk Level Higher financial risk due to equipment ownership and market volatility Lower financial risk; more predictable workload and support
Flexibility Maximum flexibility in choosing freight and partners Less flexibility; work tied to the carrier’s freight network
Long-Term Growth Builds equity in equipment; can scale into a fleet Limited opportunity for asset growth unless purchasing truck independently

Man trucker sitting in a cabin and looking through the window

What These Differences Mean for Drivers

Here’s how each factor plays out on the road and in your business.

Truck Ownership

Owner-operators build equity in their equipment and decide how and when to maintain it. This gives them control but also exposes them to large repair bills and downtime losses.

Independent contractors who lease a truck avoid the upfront cost of ownership, but they also miss out on long-term asset value and may face mileage or maintenance restrictions depending on their lease terms.

Operating Authority

Running under your own authority gives you the freedom to work with any broker or shipper, negotiate your own rates, and build direct relationships.

It also means handling FMSCA and DOT compliance, trucking insurance filings, and federal paperwork. Independent contractors skip these requirements by running under a carrier’s authority, but that limits load access to the carrier’s network.

Control Over Loads and Schedule

Owner-operators decide which loads to take, which lanes to run, and when to be on or off the road.

Independent contractors typically work through dispatch and accept loads the carrier assigns. This creates predictable work but reduces day-to-day flexibility and bargaining power.

Business and Administrative Responsibilities

Owner-operators run a full business, managing everything from bookkeeping and taxes to equipment compliance and fuel planning.

Independent contractors focus mainly on driving while the carrier handles most administrative tasks, making the role less demanding outside of driving hours.

Costs and Financial Risk

Owner-operators face higher exposure to financial swings, including repair costs, slow freight cycles, rising equipment prices, and fluctuating interest rates.

Independent contractors experience fewer financial shocks because many expenses are absorbed or managed by the carrier. The role is more stable for new drivers or those with tight budgets.

Earning Potential

Owner‐operators often gross $180,000-$350,000+ annually, though typical expenses can eat 60-80% of revenue, leaving net take-home often in the $60,000-$120,000 range.

Independent contractors, meanwhile, report average earnings of around $53,419-$68,892/year, with variation based on region, freight type, and contract terms.

Long-Term Career Growth

Long-term growth opportunities depend heavily on whether a driver owns their equipment.

Owner-operators have the ability to scale their business by purchasing additional trucks, hiring drivers, or moving into higher-paying freight niches such as specialized hauling.

Because they build equity in their equipment and operate under their own authority, they have more flexibility to negotiate directly with shippers and create dedicated lanes that support long-term stability.

Independent contractors, on the other hand, typically experience more limited advancement unless they move into ownership. Leasing a truck through a carrier doesn’t create equity, so long-term financial growth often requires transitioning into an owner-operator role.

However, independent contractors can still grow professionally by taking on specialized freight within a carrier’s network or using the role as a stepping stone to eventually purchase their own truck.

Woman Driving An Eighteen Wheeler

Which Option Is Right for You?

Choosing between becoming an owner-operator or an independent contractor depends on your goals, financial situation, and readiness to take on the responsibilities of running a business.

Here’s what to consider when choosing:

  • Your experience level: New drivers often start as independent contractors because it’s an accessible way to gain experience without taking on the full financial and administrative burden of running a trucking business.
  • Your financial stability: Owner-operators need enough savings or credit to cover a down payment, insurance, maintenance costs, and unexpected repairs. Independent contractors usually have lower upfront costs, making the role more attainable early in a driving career.
  • Your willingness to run a business: Owner-operators handle bookkeeping, taxes, maintenance planning, safety compliance, permits, and customer relationships. Independent contractors focus more on driving, while the carrier manages authority filings and much of the administrative work.
  • Your comfort with risk: Running under your own authority offers more autonomy, but it also comes with higher financial exposure. Independent contractors typically face fewer financial surprises, especially if they are leasing a truck through the carrier.
  • Your long-term career goals: Some drivers want independence, earning potential, and the ability to build equity in their equipment. Others prioritize predictable freight and fewer business obligations.

Many drivers begin as independent contractors to build savings and learn the industry. Once they are ready for greater control (and the risks and rewards that come with it), they transition to owner-operator status.

Conclusion

Both owner-operators and independent contractors are vital to the trucking industry, and each path offers meaningful opportunities depending on your goals.

Owner-operators enjoy more freedom and earning potential but take on higher financial and administrative responsibilities. Independent contractors benefit from lower barriers to entry and more predictable support from a carrier.

Choosing the right path comes down to understanding your financial readiness and long-term plans.

Whether you’re upgrading equipment or preparing to become an owner-operator, Mission Financial Services can help you get the financing you need. Learn more about our direct lending or start your credit application right away.

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Why Owner/Operators Should Run Hard This Holiday Season

There is no doubt that the COVID-19 pandemic has had an impact on the vast majority of industries throughout the country; the freight industry is no different. Currently, carrier rates are skyrocketing, surpassing the all-time high for rate prices several times throughout the course of the year. As we enter peak freight season, now is the time for owner/operators to run hard in order to maximize revenue and take full advantage of a unique holiday season where spot rates are at record highs. Traditionally, owner/operators tend to work fewer hours when carrier rates are at their highest. With higher rates, drivers are able to reach their financial goals faster, using the extra time to catch up on rest or family time. A little downtime will always be a good thing, but this holiday season is shaping up to be different; rather than take time off, more and more owner/operators plan to run hard through the new year for multiple reasons.

Possible Country-Wide Shutdown

As COVID-19 infection numbers throughout the United States spike to global highs and the country prepares for a shift in leadership, the economic uncertainty in the air is palpable. The transition from President Trump to President-Elect Biden brings with it a new plan for combating the pandemic, which could mean another country-wide shut down. In November, the president-elect’s coronavirus advisors proposed a plan to shut the country down for four to six weeks at the start of the new year to combat the virus. Shutting down the country has a very real impact on the trucking industry, and owner/operators should understand the possible impact a shutdown could have on business and revenue streams.

Increased Wait Times for Pickup and Dropoff

While on the road, a driver’s livelihood depends on their ability to drop off one load and pick up another quickly and efficiently. Turnaround time for freight drivers makes the difference between a successful season and an unsuccessful one. During the first shut down, many truckers faced drastically increased wait times at pick-up locations due to social distancing measures and decreased on-site staff. For drivers, every hour is valuable and when they spend more time waiting they spend less time driving, or worse, less time resting—a tired driver is a dangerous driver. Ultimately, the increased time waiting leads to less time spent driving and loss of revenue. If another shutdown is on the horizon, owner/operators should use this peak season to prepare their finances to account for delayed travel times or anticipated time off if necessary.

Closed Towns and Changed Routes

These increased wait times weren’t even the worst problem many drivers faced. Many of the towns, businesses, and rest stops long-haul drivers rely on closed as well, leaving drivers with few, if any, options along their routes. Long-haul life can be daunting and dangerous, and with limited access to clean and safe rest stops and restrooms, a shutdown would severely impact a driver’s quality of life while on the road, forcing some to make the decision to avoid those routes completely. When drivers are forced to change their routes navigating unfamiliar routes can lead to increased time on the road, unsafe conditions, and even delays in shipments costing drivers valuable time and money in the long run.

Possible Increase in Industry Unemployment

In the event of a second shutdown, owner/operators should be financially prepared to take time off of work. The first shutdown led to record unemployment rates in the trucking industry, with 88,000 people losing their jobs in the month of April alone. The previous record was set in April 1994 when 49,000 people in the industry lost their jobs. While unemployment numbers have gone down, the industry still faces the very stark reality that a second shutdown could have comparable effects. Owner/operators should take this opportunity to build a nest egg for their families while rates are at their highest and opportunities are available—before the new year brings further uncertainty to the United States economy.

Record High Rates

Even if the country doesn’t enter a second shut down, freight rates will likely never reach today’s record prices again. In October 2020, dry van spot rates were 60 cents higher than in October of 2019—a 30% increase year over year. This rise in prices is only expected to continue through the holiday season as e-commerce sales soar, making this the perfect time to execute one last push before 2021 brings unpredictability and doubt. With the inevitability of either a second shutdown or prices returning to industry norms, owner/operators don’t want to miss out on the current gold rush happening in the industry.

Whether the country faces another lockdown or not, the rates are bound to return back to normal early in 2021. Many owner-operators understand the importance of the next few weeks to reaching their financial goals for the year. As we enter the high-demand holiday season, driver’s should run hard to maximize their annual revenue before the start of the new year.

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