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The Advantages of Using Owner-Operators

The Advantages of Using Owner-Operators

September 25, 2018

In today’s trucking market, hiring and retaining drivers is a constant battle. Many fleet owners are turning to owner-operators to cover their loads. There are many advantages of using owner-operators.

Knowing what to look for when hiring an owner-operator, and properly managing their work is different than company drivers. Here are some advantages of hiring and using owner-operators, as well as some disadvantages to consider at hiring time.

Advantages of Using Owner-OperatorsThe advantages of using owner-operators include lower costs.

Most owner-operators are professional truck drivers who possess the traits you want your company drivers to develop. The many advantages of working with owner-operators can lead to a stronger fleet with an excellent reputation.

Owner-Operators are Highly Experienced

Most truck drivers start out as company drivers. They build their experience and save money to buy their truck. When a driver becomes independent, they are much more motivated to be out on the road.

The experience of an owner-operator will benefit your fleet. An owner-operator is often better organized, and more knowledgeable about routes, equipment, and driving safety. These characteristics and professionalism are an asset and help build your fleets reputation.

Owner-Operators are Contract Employees

From a human resources perspective, hiring owner-operators means you won’t be providing primary benefits. Because you are hiring a contractor, you don’t have to provide insurance, 401(k), and other benefits that, while not mandatory, are certainly expected.

Owner-Operators Have Their Own Trucks

As contract drivers with their own equipment, owner-operators are responsible for the maintenance of their trucks. Truck payments and insurance are the obligations of the owner-operator. One item to be sure to outline in any contract with an owner-operator is who pays for fuel.

Owner-Operators Reduce Costs

Trucking is a competitive business with thin margins of profit. When hiring owner operators, you can negotiate rates on a case by case basis. As you get familiar with each owner operator you hire, you may be able to dispatch them on loads that ultimately increase your margins.

From the value of experience to the reduced human resource costs, and no equipment or insurance expenses, there are significant advantages to using owner-operators.

Disadvantages of Using Owner-Operators

There are downsides to hiring owner-operators. While “control” might not be the healthiest mindset for fleet managers and owners, when you do hire owner-operators, you give up a little control over the dispatch process. Owner-operators can choose to take or not take jobs as they see fit. This adds a level of uncertainty to your operations.

Your Brand is not the Owner-Operator’s

There’s also something to be said for having your employees making your deliveries. This is especially true for customer-centric shipments where you want your brand to be on full display. With owner-operators, you won’t have your logo on the side of the truck, just like won’t have your logo stitched into the driver’s shirt.

Owner-Operators are Loyal to Themselves

Having long-term loyalty is another benefit of full-time drivers, an aspect that’s hard to realize with owner-operators. If you pay your drivers well, provide training and advancement opportunity, and offer an attractive benefits package, drivers are often motivated to stay with you for years; even decades. This loyalty is a significant advantage to any trucking company.

Variables to Consider When Hiring Owner-OperatorsConsider the advantages of using owner-operators when hiring truck drivers.

Each trucking company has different needs. While owner-operators are right for one fleet, they may be wrong for another, while a third may benefit from using a combination of both company drivers and owner-operators.

One variable you need to consider is the consistency of work. If you have shipping needs that fluctuate from month to month, then using owner-operators would be beneficial, as you can hire them when needed and not concern yourself with layoffs and other issues when business slows. If your business is consistent as clockwork, contracting with owner-operators can be done on an as-needed basis, covering for drivers with illness or vacation time.

The advantages of using owner-operators out weight the disadvantages. If adding experienced drivers makes sense for your fleet, then look to an owner-operator.

Invoice Factoring for Your Trucking Company

Invoice factoring is a method of financing used by trucking companies to improve cash-flow. If growing your trucking company is in your plans, invoice factoring can provide you with the working capital you need. Since 1994, TCI Business Capital has provided invoice factoring to 1000s of companies across North America. For a free, no-obligation factoring quote and approval, fill out the form below, or call 800-707-4845. We’ll get you a quote for a custom, month-to-month program in just 15 minutes.

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