The good news? Owner-operators scored a record-setting income average last year, according to data from ATBS, the nation’s largest owner-operator services firm. The bad news? Income could take a step back this year as freight demand slows and rates settle to more historically normal levels.
Todd Amen, president of ATBS, which serves about 15,000 owner-operator clients, spoke in a benchmarking webinar Wednesday. As reported by Overdrive earlier this month, owner-operator clients of ATBS averaged $65,000 in net income in 2018 — the highest annual income average on record for ATBS. Amen said that average could stay flat this year or even slip a few thousand dollars. (See a full breakdown of 2018 owner-operator income by segment at this link.)
“Trucking is a cyclical business,” he said. “We have good years and we have tough years. 2019 is not going to be a tough year, but it’s not going to be as good as 2018.”
Last year, owner-operators had the opportunity to be more selective with loads, since loads were plentiful and rates were fat. That likely won’t be the case this year, Amen says, noting operators will have to eye cutting costs and “may have to run where you don’t want to, take loads you don’t want to.”
“The market is changing,” he said. “This year is not going to be as robust as last year. The important thing is that as the market changes, you need to realize it’s changing and figure out how to make money in that market.”
He cited fuel economy, specifically, as an area for owner-operators to focus on. Last year, he says, average mpg of ATBS clients went down, meaning fuel spending went up per mile. He encouraged owner-operators to find ways to increase fuel economy to help boost profits. A quarter-mile-per-gallon increase — such as 6 mpg to 6.25 — adds about $2,500 to an operators’ bottom line, he says. “It’s not all about revenue per mile. It’s about costs, too. Saving costs goes directly to the bottom line,” he says.
The owner-operator market grew by about 8 percent (or 10,000 truckers) last year, says Amen. “It was a great market and a lot of people wanted to become an owner-operator.”
Amen foresees that trend continuing this year. January and February were slow starts to the year, he said, but that’s in line with seasonal trends. The spot market, in particular, suffered, said Amen, but he expects market conditions to improve in the coming months.
“We think 2019 is going to continue to be good for rates,” he says. “Even though it feels slow to some out there, trucking is still pretty good.”