Pulse: Jack, be nimble

| October 01, 2009

You have one great asset that most fleets shippers and dealers lack.

PulseGreedy fleet owners. Unrealistic dispatchers. Abusive shippers. Unresponsive dealers. The villains are out there, and you’ve all been their victims at one time. Beyond doing your part well – being cooperative, punctual and safe – there’s not much you can do to elicit better treatment.

One key to success as an owner-operator, though, is to shed the victim mentality.

You have one great asset, especially if you are a one-truck operator, that most fleets, shippers and dealers lack. It’s being lean and mean. You can react to change more quickly than even a small, well-run company can.

You’re not saddled with employees you don’t want to lay off. You’re not saddled with millions of dollars of capital assets that can’t be shed quickly at a fair price. You are not saddled with a board of directors or hot-air committees that need to approve your steps to make ends meet.

This point of flexibility emerged from information presented at Overdrive’s Partners in Business seminar at the recent Great American Trucking Show in Dallas. Todd Amen of ATBS, one of our partners in the program, showed the chart on this page. It compares average earnings of owner-operators with the total earnings of 11 publicly traded carriers.

The fleet results reflect changes in the economy and fuel prices. But over the same six years, average owner-operator income is remarkably even-keeled – between $11,000 and $14,000 per quarter.

“I wouldn’t say that owner-operators are better managers than large fleets, but I definitely think owner-operators can respond more quickly to change,” Amen told me later. In addition, “A fleet still has to pay for the terminal, payroll – all that fixed overhead,” costs that become suddenly out of proportion when revenue plunges. The typical leased owner-operator has little fixed expenses beyond monthly equipment and insurance payments.

Amen notes one qualification is that operators who are leased, as are most of his clients, gain security by the nature of their arrangement if the fleet is well-run. That’s been reflected in the average miles of ATBS clients. Even as the economy deteriorated in 2008, their miles dropped only 4 percent; 2009 has seen a further dip of only 1 percent. Compared to other recent measurements of economic decline, that’s nothing.

If you’re one of those who benefit from association with a stable fleet, you’ve got half of the survival formula under control. The rest is costs, notably fuel.

Learn to work with your eyes open to what’s going on in your market and how it’s affecting your costs and revenue. Get professional advice if you need it. Respond quickly and ruthlessly – as any independent business person should be able to do – to keep your bottom line healthy.

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