For the first time since Todd Amen’s ATBS firm has been tracking fleet and average independent owner operator salaries, pay levels have cracked an annual rate of more than $70,000.
That was the bottom-line number that came out of ATBS’ semi-annual webinar in which Amen reviews data on how drivers are doing. The numbers he draws from are from a huge base of financial information compiled through his company’s activities offering tax and other financial services to owner operators and fleets.
“We’re in the best trucking environment I have ever seen in my history of trucking in 30-plus years,” said Amen, the company’s president and CEO, on a webinar earlier this month.
Amen uses data from truckstop.com to help drive home his points. Prior to the strong freight market of 2018, Amen said data from truckstop.com suggested that there were 12 loads available for every one truck looking for it. “We felt we were at a break-even market,” Amen said.
But after 2018, ATBS re-calculated that number where supply and demand are in balance. He concluded that number is when there are 32 loads for each truck.
In August 2021, that number went up to 142, Amen said. “For the last year or more, it was in the 125 to 140 loads level,” he said. Amen thought in the past that it would be impossible for that ratio to ever get to 150.
Once the market “levels off, which will happen at some point,” a new breakeven level is likely to be somewhere between 50 and 75, Amen said.
Amen’s data, drawn from 135 fleets, confirms the anecdotal reports that drivers are making so much money on a per mile basis that they are willing to drive less, or, as economists would say, exchange wages for leisure. Compared to the first six months of last year, part of which includes the pandemic-burdened months of April and May and one of the worst freight markets ever, ATBS said drivers are running 1.5% fewer miles.
“Every fleet we talk to says, I can’t get the drivers out of the house,” Amen said. “They can make a ton, but they run less.”
For drivers, their increase in revenue per miles is 4.5% overall compared to last year. The overall rate is up 7 cents per mile to $1.55/mile. Within that, reefer is only up 2 cents, to $1.40, while dry van is up 5 cents to $1.45. All independent drivers are up 11 cents, to $1.75 while flatbed drivers rose 15 cents to $1.94.
The increase in net income to more than $70,000 is an average figure across all categories of drivers. Specifically, the average number came in at $70,310, a gain of $6,530 for the 12 months.
Broken down, independent drivers were up $6,035 to $70,294; dry van was up $5,721 to $70,017; reefer drivers climbed $6,483 to $64,013; and flatbed drivers jumped $11,817 to $80,529.
Amen added that the top 10% of the drivers served by ATBS are making more than $225,000 per year.
How much better are independent owner operators doing than fleet drivers? One chart by Amen among the several in his presentation showed that the advantage for an owner operator is now beyond $1 per mile.
Partly as a result of this, fleets are having difficulty growing, Amen said. “Everybody we’ve talked to in the last month wants to add capacity but people are having a really hard time,” Amen said. With data showing that anywhere from 50,000 drivers (FTR) to approximately 60,000 drivers (Amen) have been granted new authority so far in 2021, it makes it difficult to grow an existing fleet, Amen said. Out of 200 fleets he has surveyed, Amen said he knows of only two that have managed to grow.
Amen said technology developments have made it easier than ever for a driver to run under their own authority. “Barriers to entry are less than ever with the technology available,” he said. “I can do all my tax reporting, I can factor my bills, I can get my authority online, I can buy my insurance online. It’s easier than it’s ever been.”
But these good times have other consequences that aren’t favorable for independent contractors. Specifically, used truck prices have doubled in the past year, according to Amen. “The average driver today is paying $2,500 per month for a truck and that is not going to change any time soon,” Amen said.
And a squeeze on mechanics means that the costs of maintenance are soaring too, Amen said, by up to more than 10% in the last year.
Amen’s recommendation had been that a new truck had maintenance costs of about 3 cents per mile, but that is now up to almost 5 cents, he said. For a truck that is more than 5 years old—and Amen noted that the high cost of a used truck is keeping older trucks on the road longer—the maintenance costs are now about 11.7 cents per mile.
But the good times don’t last forever. Amen posed the theoretical question: when will the owner operators move back to the fleets?
“When I can make $50,000 more running the spot market, I will do that until it goes away,” he said. The problem is that when the good times end and a driver decides to go back to joining the ranks of fleet drivers, those fleets have run into the same downturn. “That’s when the fleet doesn’t need you,” Amen said.
With a difference near $1 per mile, “we haven’t seen that turn at all,” Amen said. But there’s hope for fleets, he added. “Our drivers need to understand that to make good money over the long term, maybe the fleet is the place to be,” Amen said.
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