Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/441527
PULSE January 2015 | Overdrive | 5 By Max Heine Editorial director mheine@randallreilly.com I s there reason to think 2015 will be a good year for owner-operators? Yes. And that's not based just on economists spouting rosy forecasts. It's also based on 2014's track record. "The good freight demand and driver shortage have worked well for independent contractors this year," says Todd Amen, head of ATBS, the nation's largest owner-operator financial services provider. "We expect the overall independent contractor net income av- erage to be over $54,000"in 2014, the highest since ATBS started keeping track 16 years ago. Fourth-quarter net income for ATBS clients isn't yet available, but the third-quarter average was $14,464 for leased and independent opera- tors in all types of hauling. That's a 9.4 percent increase from the same quarter in 2013. Amen adds that the good news "seems to be spread broadly among all segments." Looking at the 12 months ending in Septem- ber 2014, net income was particularly good for leased flatbedders: $57,621. That's partly due to strong second and third quarters with construction's seasonal pickup, though federal data shows all of 2014 will be construction's best post-recession year. Leased dry van and reefer operators were about $52,000 for the same 12 months. Independents usually do better than leased operators in a surging market because they can catch some of the excess demand that larger fleets can't always accommodate, and those 12 months were no exception. Average net income for independent clients of ATBS was $58,208. "Fleets are raising pay and offering gener- ous benefit packages in order to attract and keep their drivers in the face of a growing driver shortage," says Bob Costello, chief economist for the American Trucking Associ- ations. He was commenting on an ATA survey (see page 17) that shows good pay for company drivers during 2013. In a recent survey by Commercial Carrier Jour- nal, 57 percent of for-hire carrier respondents ranked "driver shortage" as their top concern for 2015, dwarfing all other issues. That's 10 percentage points higher than the same ranking a year ago. Some respondents say they are making double-digit percentage increases in pay to recruit and retain drivers. For owner-operators mired in a low-pay position and facing dismal prospects for change, it could be a good time to look at other fleets. (If you'd like some pointers on doing this, visit OverdriveOnline.com and search for "Choosing a carrier" to read a full chapter from Overdrive's Partners in Business manual.) Asked in CCJ's survey what expense likely will rise the most in 2015, respondents ranked driver pay above everything except health insurance. If you have a good safety record, there are countless fleets eager to partner with you. Not sure if you're earning what you're worth? Make a new year's resolution to find out. A strong start drivers at wages that would not support a family. "I don't like the idea that we have to tell our kids that you can't be a part of the band because we can't afford the [instruments and] costumes, because your daddy's a truck driver, or when that's the reason for not being able to provide dental or health care. It's just wrong." Though many carriers have boosted miles-pay packages in recent months, some readers see the hikes as not enough to ameliorate the issues Curl describes. Income growth expectations through recent years have remained low. In a survey Overdrive conducted over the last year, only a third of company and leased operators expected their income to be greater in 2014 than 2013. Fuel hauling company driver Allen Smith put it this way at OverdriveOnline.com: "Companies have come out of the denial stage and are entering 'awareness.' However, the actions taken are like small steps forward in a marathon." However, Michigan-based owner-operator Michael Wright, leased to a "mom and pop" carrier and paid on percentage, showed what times of rate growth can do for more independent businesses. "Right now I am averaging around $2.75 for all miles to the truck," he said in Novem- ber, with $2.25/mile on the low side, $4-plus on the high. "My phone has not stopped ringing, as I deal with not only my company but outside brokers as well. I keep hearing 'not enough trucks.' Things appear to be picking up." Carrier officials say they are expecting to ante up on pay in 2015 to find and keep good drivers.