Every owner-operator knows today's trucking business environment is challenging, at best. Between global forces pulling on demand for goods and diesel, and a glut of trucking capacity outpacing demand, plenty forces are at work that no individual owner-operator has control over. Yet we do have 100% control of how we manage our business.
Today, with relatively low freight rates coupled with high fuel costs, are you still running your business the same way you did during the good, booming years? If the answer is yes, it’s high time to change gears.
To compete with large fleets that have an economy of scale advantage based on sheer size, owner-operators must leverage inherent operational efficiencies. By definition, owner-operators lack the scale advantage. Those without a durable competitive efficiency will inevitably find themselves with neither a scale advantage nor an operational advantage.
Inefficient owners will find themselves in the lower-left quadrant on the chart and at the mercy of the market or heading to the exit -- whether by choice or as a victim of getting culled from the herd.
In the booming good times mid-late 2020 through 2021, with high freight rates and relatively low fuel cost, it made perfect sense for owner-operators to focus on high productivity. The strategy was to run fast to maximize revenue. Back then, it was OK to run harder, even if less efficiently, as high rates more than offset the higher fuel costs of greater speed.
