Driving a lot less, earning a little bit more
We’re all familiar with changes in trucking over recent decades that have changed the owner-operator business. Among them, volatile fuel prices, shorter length of haul, and tons of regulations.
But how about change in just this last decade? The owner-operator business model has shifted drastically, probably more than in many other industries.
ATBS, which provides business services for thousands of owner-operators, has plenty of data to measure the key factors. Matt Amen of ATBS threw out some eye-opening numbers this week during the annual meeting of the Truckload Carriers Association in Las Vegas.
Comparing owner-operator averages in 2012 with 2003:
* Revenue is up 26%.
* Revenue per mile is up 59%.
* Net income is up 9%.
* Net income per mile is up 38%.
* Miles per gallon is up 40% (5 mpg to 7 mpg).
* Fuel costs are up 163% ($1.51 to $3.97)
* Annual miles are down 21% (138,726 per year to 109,836).
* Length of haul is down roughly 35% (about 1,000 miles to 650).
* Days away from home are down from 28 to 5.
The money numbers are best summarized by net income per mile — up 38 percent, or almost a 4 percent gain every year. That’s a decent raise in any industry.
Of course, inflation is a big factor when you compare earnings over 10 years. Inflation increased 25 percent over those years, or 2.5 percent per year. Compared to that, 4 percent year after year still looks good.
However, looking strictly at income instead of income per mile, the 9 percent increase – about 1 percent per year — failed to keep pace with inflation. Even so, there was a bit of a recession in that period, leaving many industries reeling and many individuals unemployed or under-employed. As Amen observed, “Ten percent growth in net income is a lot better most have done.”
The other standout in the ATBS comparison is miles. Length of haul is shorter by a third, so it’s not surprising that total miles are down by a fifth. Nor is it surprising that average time on the road, instead of being a little less than a month, is a little less than a week.
Taken together, this means the life of an owner-operator has improved over 10 years. Real income has risen slightly, and to earn it you don’t have to drive ungodly numbers of miles and spend most of your life away from home.
A lot of you have had a different experience than what the ATBS averages say. How does your financial snapshot compare with a decade ago?