As we ring in the new year, tight capacity and strong freight demand have carriers offering top dollar for owner-operators. But while times are good, the top two concerns you cited in the 2004 Overdrive Reader Profile – the high price of fuel and increasing regulations – will continue to affect your business this year.
There’s nothing you can do to lower the price of fuel, which currently hovers around $2 per gallon. And regulations will not ease anytime soon, especially with yet another version of the hours-of-service rule coming out this year. Rates are strong and getting stronger, but if you don’t have a plan for coping with volatile costs and operational changes, you could jeopardize your business’ future.
Given world events, analysts expect the price of diesel to remain high for the foreseeable future. That’s bad news for those owner-operators who spend more time complaining about the price at the pump than making sure their businesses can withstand those high costs. When fuel prices first began to spike in 2001, more than 9,000 owner-operators went out of business.
But those owner-operators who combine adequate fuel surcharges with fuel-saving operating techniques can actually thrive during times of high fuel prices. In fact, American Truck Business Services, which serves more than 20,000 owner-operators, found that even though a benchmark group of owner-operators paid 3 cents more per gallon for the first six months of 2004 versus 2003, they made 5 cents more per mile. How? By slowing down, reducing idling and getting a strong fuel surcharge.
By late September you’ll be operating under a newly revised hours-of-service rule, which will be as tough as, if not tougher than, the current rule and very well may require onboard recorders. Some owner-operators are already complaining that Big Brother will drive them out of business. But the owner-operators who succeed under the revised rule will find ways to make the operational changes work. They understand that as long as freight remains strong, productivity challenges brought on by the new rule should mean carriers and shippers will have to pay even more. That means higher revenues, even for running fewer miles.
Although you may not be able to control the outside factors that will affect your business this year, you can control your response. Savvy owner-operators who know their costs and understand how to work within the system will continue to see opportunities where others see only problems. Make sure you’re one of the smart ones. Your business depends on it.