Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.uberflip.com/i/949884
48 commercial carrier journal | march 2018 SPECIAL REPORT | THE DRIVER DEFICIT Sources: ATBS; National Transportation Institute $70,000 $60,000 $50,000 $40,000 $30,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017 2016 Owner-operator (unadjusted) Owner-operator (in ation-adjusted) Company driver (unadjusted) Company driver (in ation-adjusted) Owner-Operator, Company Driver Pay While pay has increased over the last decade, when adjusted for in ation, both drivers and owner-operators actually are making less money today than they were in 2005. has been tracking driver pay since 1995. "One thing that has masked how bad the shortage is, is that we've had very poor demand," with gross domestic product growth averaging just 1.9 percent for the past eight years. "We haven't had a robust econ- omy since 2003 to 2005," he says. While the economy is not booming yet, preliminary fourth-quarter 2017 GDP was up 2.6 percent, slightly lower than the second and third quarters but still help- ing make 2017 the best year since 2014. Many economists expect the momentum to continue this year, largely because of It's a good time to be an owner-operator Owner-operators are reaping the bene ts of a hot freight market, where spot rates jumped more than 20 percent at the end of last year. Owner-operators paid on a percentage of load "can make six gures in this market," says Todd Amen, president and chief execu- tive o cer of ATBS, which provides business consult- ing services for independent and leased contractors. "We think it's going to be a terri c year for owner- operators," says Gordon Klemp, president and CEO of the National Transportation Institute, which tracks driver pay. "Top drivers are going to realize that a lot of owner-operators are making a lot of money," which could lead some of them to consider buying their own truck, likely through lease-purchase but also poten- tially outright. The recent tax overhaul – with its 100 percent depreciation in the rst year on new and used trucks and trailers – smooths the way for drivers who can get nancing to make the leap into truck ownership with- out going through a lease-purchase program. Add to that the bargains available on three- to ve-year-old used trucks, and it "really changes the complexion of being an owner-operator," Klemp says. Despite challenges in recent years, the owner-op- erator population has held steady, Amen says, with at most a 5 percent drop during the last couple of years. Owner-operator revenues have crept back up slowly after dropping more than 20 percent since 2005 be- cause of the Great Recession and downward trends in length of haul and other operational factors. I n 2017, ATBS clients averaged $60,182. Owner-operator income could take a hit when the electronic logging device mandate reaches full imple- mentation on April 1. "It could be a pretty rugged period when people start going out of service," Klemp says. An informal poll by CCJ sister brand Overdrive in January found nearly 26 percent of respondents still had not gotten an ELD. Owner-operators who used to make money driving 130,000 miles per year can't do it anymore because of ELDs, Amen says. He sees them responding in one of two ways: They lease on with a eet and run under its ELD system, or they try to make enough money on the spot market to account for their lost productivity. "Smart eets are out recruiting some of that 'hired gun' (true independent) capacity," Amen says. Whenever freight levels are strong and eets have a hard time nding drivers, they turn to owner- operators to ll the capacity gap. Most large carriers that lease on drivers have maintained the size of their owner-operator eet, Amen says, but some with "ag- gressive programs are on a trajectory to grow 10 to 15 percent." In some cases, carriers have successfully recruited owner-operators who have paid o their lease- purchase truck by o ering the chance to make more money on a percentage pay program. "We've heard of a few places that have record recruiting classes," Amen says. – Linda Longton