Productivity comparison between owner operators and company drivers: Within the copier industry

Numerous papers have been written that discuss the use of owner operators for trucking operations. This paper will look at operations that are similar to truckload operations that also provide additional services to the end customer. One of the major factors that influence management is that of a financial one. The objective within this paper is to look at which type of driver provides the most productivity and to assist executive level managers to decide which driver is the most productive for their operations. Some information used in this paper is confidential due to a proprietary nature therefore names of firms will not be exposed.; The drivers within these truckload operations that will be used provide additional services other than just driving. These are drivers that not only drive to customer locations but once there they provide such services as delivering or removing equipment from within the customer's location. In many instances these drivers assemble, disassemble and test equipment for the customer. The methodology used in this paper will compare the ability of the different types of drivers based on the average number of orders each type of driver is given, the logistics company's cost, the potential revenue gain for the copier firm and the weight of product that is hauled by the driver. This methodology is used because local managers tend to assign more difficult type of work and more work to those drivers that are able to complete the work assigned to them. From a financial perspective the cost of each driver can be determined using the cost of such things as truck lease cost, payroll and other expenses compared to the payout to the owner operator. The one factor that is difficult to determine is the insurance costs. A simple method that will be used is a realistic one that shows the costs of having a company driver versus that of using an owner operator. These numbers are based on what a single firm, that has multiple locations, pays out to each of its drivers based on the expenses incurred and revenues received from each order. With given assumptions the owner operator seems to be more productive. When using the number of orders, revenue and weight, there is a slight increase in cost, the potential revenue gain for the customer and the logistics company studied may outweigh that additional cost.