Owner-operators are seeing strong freight volumes now but should prepare for a “freight cliff,” according to Todd Amen, CEO and president of American Truck Business Services (ATBS).
That was one of the messages from Amen during ATBS’ annual Independent Contractor Benchmarks and Trends conference call on Wednesday.
The call was a recap of data collected from ATBS’ clients. Amen provided insight on 2019 benchmarks, including net income, average miles driven and freight rates, among other things.
Amen said the coronavirus pandemic has provided the trucking industry with a “huge opportunity” to move freight.
“Right now, trade is strong, America is hoarding goods. We’re buying toilet paper and everything that you can buy to be in our home for the foreseeable future; shelves have to be restocked,” Amen said. “But a lot depends on how long the coronavirus epidemic keeps us all locked up.”
Amen said if the pandemic continues for months on end, many Americans will be out of work that much longer, affecting consumer spending.
“Ultimately, what happens to the sentiment in America is we close our pocketbooks, we’re going to stop spending money because we need to survive,” Amen said. “We’re going to stop shopping except for the essentials. That means freight stops moving.”
Amen said owner-operators can prepare for “darker days” by drawing down on lines of credit from their bank, as well as negotiating with banks, suppliers and vendors on how they can extend payments.
ATBS, which specializes in providing financial assistance and advice to owner-operators, including tax preparation, has worked with more than 150,000 drivers since 1998.
Amen said owner-operators took a hit during 2019 because of economic conditions and other factors.
“It was a tougher year, the population shrank by just over 3%, we lost about 4,000 owner-operators,” Amen said. “But when you keep that in perspective, in 2018, we grew by 10,000 owner-operators, up 8% over 2017. The net between the 2018 to 2019 is we’re still up about 6,000 owner-operators.”
Other economic conditions Amen discussed included the average owner-operator net income in 2019, which was $63,722. It was a decrease of around 2% from 2018 net income of $65,000.
Amen said the slight decline does not reflect a bad year, considering how tough the freight environment was for most of 2019.
Owner-operators also saw an increase in the cost of insurance during 2019, as well as the average cost of truck payments, Amen said.
The average owner-operator truck payment has gone from around $1,750 monthly 15 years ago to $2,400 in 2019. The average cost of insurance was around $12,500 last year.
Overall, Amen said owner-operators are driving less miles and making more money than they were 10 to 15 years ago.
Drivers have gone from making 35 cents a mile to making almost 70 cents a mile, from making $4,000 a month to making close to $5,500 per month, and from driving 139,000 miles to driving 100,000 miles per year, Amen said.
“It’s still a tough job, but it’s gotten much better in the last 15 years, being an owner-operator,” Amen said.
CM Evans
Boycott all non essential imports from China
J
WAKE UP ………. NOTHING HAS CHANGED. COSTS HAVE GONE UP SO MUCH THAT ANY INCREASE IN PAY OR RATES DOES NOT BEGIN TO MAKE UP FOR ANYTHING. THE JOB IS STILL THE SAME, THE SHITTY SHIPPERS AND RECEIVERS ARE STILL THE SAME, ALL OF THESE COMPANIES ARE RUN BY MORONS AND NOTHING HAS CHANGED FOR THE BETTER SINCE JIMMY CARTER ………. AND THAT IS SAYING SOMETHING. NOTHING WILL CHANGE UNTIL WE HAVE A DEMOCRATIC MAJORITY. PETER DEFAZIO CANNOT DO IT ALL HIMSELF. PARTICULARLY WHEN THERE ARE SO MANY MITCH ” THE BITCH ” MCCONNELLS, RICK SCOTTS, NEIL GORSUCHS AND OF COURSE, THE ULTIMATE VULGARIAN HIMSELF ……….
Clifford
Please help me understand where this is getting better at I don’t see it. How do truckers move America and where poor.Why aren’t truck living like celebrities I mean we bring the American people 85% of what they want and need and yet where at the bottom of the barrel it sad how we can pull a trailer worth $250,000 of heeds and as a company driver hope you get $200 out of it or a owner op hoping to get over a $1000 for the load it’s truly a shame
Stephen
You are wrong about being a owner-ops is better than 15 years ago. Freight was very cheap from Oct 2019 to February 2020. In Toronto Canada I can show you a hundred owner ops truck park at a farm for almost a year. Insurance companies in Canada are charging $18,000 to $24,000 per year cd. Truck drivers are quitting in large numbers.
Tim
Buddy the Trucking business has gone straight down hill in the last 15 yrs. What gets me is people talking and reporting on things they have not a clue. People that make rules n regulations that have probably never even been in a truck . Also when times get tuff n uncertain
truck drivers are praised n given respect, all deserved and appreciated.
Think what it would be like if truck drivers sit down rite now.U guess the government would listen then?
Jerry krage
Wtf who hauls for 70 cents a mile? You shouldn’t call lease drivers owner operators. Owner operators pull their own trailer. Lease drivers are company drivers that assume all the risk. I( as a true owner operator) average around 2.25 to 2.50 a mile for all miles every week 2700 miles per week in 4-5 days
Dave S
Are though numbers based on brokered loads? . .
CM Evans
Agreed, the IOO is an Independent Owner Operator and should be recognized as such. An LOO is a lease owner operator the latter w/a limited investment.
Can the writers who read these comments and develop the stories make those adjustments in future articles.
Carlos Moreno
I don’t know were is all that freight you talking about
Because brokers paying #$%$# for loads
Please stop laying to people giving misinformation
You know you laying
Drivers still wasting 5 6 7 or 8 hours on shippers & receivers
Whit out pay
So shut up
And stop laying
Art
The illegals working as 1099 contractors killed this industry.
Seems the only fleets growing are megas or the foreigner carriers paying employees as 1099.
I just noticed
Miller/Coors wants you to have a trailer that’s not older than 10 years before they load you. I seen elderly people in their 80s pick up a load of beer in a international 9400i or a Freightliner fld120