‘Beyond unprecedented’ surge in authorized drivers continues to flood market

Over the past 16 months, more than 113,000 for-hire trucking applications have received federal operating authority, according to data from consultancy FTR. More than 100,000 of those applicants representing a pool of 195,000 drivers still held authority as of Nov. 1, according to FTR’s analysis of government data.

Solo operators have accounted for more than 70% of the approved applicants, said Avery Vise, FTR’s vice president of trucking. The six-figure size of approved drivers, which Vise called  “beyond unprecedented,” reflects an ongoing trend of owner-operators already with trucks who have obtained their own authority. However, the population includes a significant number of former company drivers who have also obtained trucks and operating authority, another trend that shows no signs of abating, Vise said. 

Many approved applicants presumably want their own authority to participate in what has been a lucrative market for noncontract, or spot, freight, as demand for loads remains highly elevated. 

Through October, the Federal Motor Carrier Safety Administration has authorized more than 92,000 for-hire carriers, according to an FTR analysis of FMCSA data. With still two months left in the year, the number smashes 2020’s total of 59,000 approved applications, FTR said. Before last year, 2018 was the most active year with 44,000 authorized applications. 

The surge in new single-truck operations “almost certainly means we have more drivers today” than before the COVID-19 pandemic, Vise said. However, the drivers with new operating authority are generally unavailable to the large truckload carriers. Instead, many are supporting local pickup and delivery operations than traditional over-the-road truckload services, he said. 

The massive number of driver applicants has led to a 3% market share shift from carriers with more than 100 trucks to those with fewer than 100 trucks, Vise said. Jeffrey Tucker, who runs Haddonfield, New Jersey-based third-party logistics provider Tucker Company Worldwide Inc., said in a LinkedIn message last week that, for the first time in modern trucking history, more drivers operate for fleets with less than 100 trucks than for fleets with more than 501 trucks.

Tucker has claimed for years that the driver shortage is mainly a problem for the larger fleets and that more solo and micro-fleet drivers are hitting the road than ever. The challenge in such a fragmented carrier landscape, he has said, is to match loads in a timely manner with drivers who are scattered across the country.

Vise expects applications and approvals to continue until spot rate increases stall out, a scenario that may not occur for quite a while. When spot prices inevitably reverse, solo drivers will return to the relatively stable world of hauling freight for larger carriers as either leased owner-operators or company drivers, FTR said, noting at that point, application activity will slow dramatically.

The scarcity of new and used trucks could also pop the new application bubble, Vise said. Used truck prices are already very high, and if truck production is capped well into next year by the shortage of semiconductors used in motor vehicles, then supply could completely evaporate, he said. Company drivers looking to strike out on their own would have a near-impossible time getting trucks. Even leased owner-operators could struggle if they are stuck with older trucks that begin having problems and are expensive to repair, Vise said.

‘Beyond unprecedented’ surge in authorized drivers continues to flood market