Owner-operators can expect a more favorable market into 2018, said Todd Amen, CEO of ATBS, the largest owner-operator financial services provider.
After months of a soft freight market, says Todd Amen of ATBS, “I believe the cycle’s bottomed.”
Amen revisited his forecasts from last year and made some new ones during an Overdrive Partners in Business seminar at the Great American Trucking Show in Dallas last month. His new ones:
The level of enforcement accompanying the Dec. 18 start of the electronic logging device mandate will determine how much it affects rates. For example, if an owner-operator gets three or four log violations in a matter of months, carriers could see insurance cancellations and might in turn cancel the owner-operator’s lease. “That ELD’s going to matter at the end of this year,” he said. “It’s going to happen quicker than we all think.”
“Net income’s going to start going up for owner-operators” and will continue to do so into 2018, Amen said. “I believe the cycle’s bottomed.” Owner-operator net income in 2016 topped $60,000 for the first time for ATBS clients. It’s dipped since then.
ELDs will create “fragmented capacity” due to their restriction on total miles that can be run legally. “People are going to start looking for places where they can make money.”
“I believe rates are going up a ton,” Amen said, acknowledging that many industry observers disagree. He forecast an increase of at least 10 percent by mid-2018. Amen admitted his forecast from August 2016 was too early because it assumed steady adoption of ELDs. Now it appears the smaller fleets “will wait to the last minute” to buy the devices.
Another reason for optimism about rates and net income is truckstop.com’s weekly posting of its loads-to-truck ratio, which has been higher than normal. On Aug. 21, it was showing 29 loads available for every truck, Amen said.
“That’s a leading indicator,” he said. “We’re pretty excited.”
In this video of Amen’s presentation at GATS, he reviews trends in owner-operator miles, net income and costs.
Max Heine is editorial director of Overdrive and writes regularly for the Overdrive Extra blog. A CDL holder, he joined Overdrive in 1998 after more than two decades of newspaper work. You can reach him at email@example.com or 205-248-1038.