Rolling in Money
Average owner-operator income has never been higher, say the latest Overdrive figures.
Owner-operator Leon Speegle of Cullman, Ala., modestly calls his 2004 income “pretty good for an Alabama boy.” He grossed $151,000, or $1.03 per mile, flatbedding drywall and steel for Boyd Bros., plus $17,000 in the form of Boyd’s fuel surcharge. After expenses, Speegle netted $75,000, or $12,000 more than in 2003. That net would have been even better if not for a mechanical problem that required an $8,700 rebuild, plus two weeks’ lost revenue. “But I’ll get it back this year,” he says.
Speegle has reason for optimism, and he’s not alone. The latest Overdrive research shows that average one-truck owner-operator income in 2003 was $47,300, or $5,500 more than the previous year. That’s the highest since Overdrive started its Owner-Operator Market Behavior Report survey in 1996.
Efficiency, not pay raises, is the key to owner-operators’ rising fortunes, says Chris Brady of Commercial Motor Vehicle Consulting, who compiled the 2005 report.
“The owner-operators who weren’t good businessmen in controlling costs were probably weeded out in the past few years,” Brady says. “Operators who regularly looked at their numbers and thought of ways to improve them – those are the ones that survived.”
Now those who remain are enjoying flush times, even though average miles are down, says Todd Amen of American Truck Business Services, which handles the books for 20,000 owner-operators.
“They’re working less, but they’re in such demand that they’re making more money,” Amen says. “There’s just so much more freight. It all translates to more money for the owner-operator.”
Amen’s average client grossed 7 cents more per mile in 2004 than in 2003, while running 5 percent fewer miles. “Owner-operators were not expected to be much affected by the hours of service changes, but the numbers show that they are,” Amen says.
Carl Lawrence of Macomb, Ill., an owner-operator who pulls farm and industrial equipment and Freightliner RV chassis on a stepdeck trailer for Bennett Motor Express, grossed $152,000 in 2004. That’s $25,000 more than in 2003 – partially, he says, because the new hours rule helped Bennett get rate increases from big customers to compensate for lost productivity.
Bob Abts of Brillion, Wis., an owner-operator who hauls paper products on a dedicated run for Dart, made a net profit for 2004 of $62,000, or $6,000 more than in 2003. “The miles were about the same, but I was running more efficiently,” Abts says.
Sam Mobley of Lake Wylie, S.C., an owner-operator who pulls dry vans for Schneider National, grossed $135,000 and netted $53,000 before taxes in 2004, averaging $1.02 per mile in revenue and 62 cents per mile in expenses. His goal for any load is at least 30 cents per mile clear profit, so if a load doesn’t pay at least 92 cents per mile, he’s seldom interested.
Mobley routinely asks truckers their cost per mile and routinely hears, to his dismay, “I don’t know.”
“At least once a year I sit down and figure out all my fixed costs on a cents-per-mile basis,” Mobley says. This is one reason Mobley and his wife, who has a computer job at a Charlotte, N.C., hospital, are able to live in a gated lakefront community on a golf course.