Defining competitive factors: What about price?

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For “some customers, all that matters is price,” says former Overdrive Trucker of the Year Henry Albert. “If you’re better at sharpening your pencil,” finding ways to reduce your costs below those of your competition, “maybe you’re better at making a profit at lower rates.”

Profit margin for independent owner-operators (net income as a percentage of total revenue) typically hovers at about 40 percent, says Todd Amen, president of business services firm ATBS. In 2014, Amen’s independent clients on average took home 38 percent, or $60,000 out of $157,000 in revenue. During 2015, profit margins were averaging closer to 44 percent at press time.

If your cost of operation is less than your competition – say you get 2 mpg better with an aerodynamically enhanced truck – achieving a healthier margin at a lower rate to your customer is easy.

“You can be the high-end guy, too,” Albert says, by charging more for specialized service “because nobody can do what you can do.”

Whatever the case, don’t sell yourself short. “While capacity doesn’t seem to be tight right at this moment,” NASSTRAC’s Gail Rutkowski said in November, “a rough winter could put us right back where we were a couple of years ago, fighting over available trucks.”

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Overdrive editors and ATBS present the industry’s best manual for prospective and committed owner-operators. You’ll find exceptional depth on many issues in the 2021 edition of Partners in Business.
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