Trucking’s strong rebound after the initial COVID-19 shutdowns yielded a year of strong earnings for owner-operators in all major segments, based on ATBS client averages.
The average net income in 2020 for leased and independent operators combined jumped from almost $63,000 in 2019 to $67,742 in 2020, thanks to pandemic-related economic changes. Flatbedders fared best, with a 10.5% increase.
“It was a shockingly good year,” said Todd Amen, president and CEO of ATBS, the nation’s largest owner-operator financial services company. “In a year when so many businesses struggled and many failed and went broke, thank goodness things turned out good for the truckers.”
With the pandemic’s emergence early in the year, ATBS encouraged clients to run as many miles as they could “because it was one of those years where we had no idea what was going to go on,” Amen said. And they did, logging 3,200 more miles in 2020 than in 2019.
As the economy showed signs of rebounding in the second half and fleets reported trouble finding drivers, capacity was tight, so spot market rates rose in 2020's second half, analysts have said. Shifting freight patterns likewise diverted freight to the spot market, another contributor to spot rates gains.
Among other factors in owner-operators' favor, Amen said, driving became more efficient once the pandemic sent the economy into lockdown, taking many vehicles off the highways. That reduced congestion, idling times and fuel costs.
Average diesel price per gallon
Diesel prices that plunged as the pandemic took hold added further to that productivity gain. Fuels costs fell almost 23%, or $10,500, for leased and independents combined. Reefer haulers benefited the most, with their costs falling 33%, saving more than $17,000.
Even though many leased operators get a fuel surcharge that takes the edge off price fluctuations, the delay in weekly surcharge application works in owner-operators’ favor when diesel is falling, and against them when prices rise, Amen said.
Construction, especially residential projects launched by homebound homeowners, contributed to demand for flatbed loads, noted Amen. That segment showed the largest gain in net income, $7,114, for a 2020 average of $75,129. It was the highest level for flatbedders since 2018 – a banner year for all of trucking – when their earnings averaged $77,720, he said.
For the other segments tracked by ATBS, average 2020 net income set records: dry van, up 7.7% to $68,178; reefer, up 6.7% to $60,847; and independents of all niches, up 6.3% to $67,742. For all segments combined, net income per mile rose from 63 cents in 2019 to 65 cents in 2020.
As with 2020, the pandemic’s effects make it difficult to predict 2021’s economy, Amen said. “I think the biggest reason is we’ve got some false floors with government money propping us up in a lot of ways,” he said.
Nevertheless, it appears 2021 will be “a really good year, even the second half,” as many analysts are forecasting. Consumers added $3 trillion in savings last year, and “we expect that to get spent once coronavirus subsides.”
ATBS will present more detail on owner-operator performance in its 2020 Independent Contractor Benchmarks and Trends Driver Conference Call 4-5:15 p.m. MDT, April 1. Registration is free.