Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/472327
BUSINESS 24 | Overdrive | March 2015 Owner-operators, led by independents and flatbedders, had a record year for net income, based on averages from ATBS, the nation's largest owner-oper- ator financial services provider. Leased operators and independents together cleared an average $56,167 after expenses during 2014. That's 7 percent above the 2013 average, $52,406. Strong freight demand, a driv- er shortage and plunging diesel prices contributed to the increase. The 2014 total "is $2,000 higher than we predicted, and most of it comes from the fourth-quarter fuel cost reduction," said Todd Amen, ATBS president and chief executive officer. "All segments had a really good year." Net income for independents and flatbedders topped $60,000. Independents' income showed the big- gest gain over the year, 8.7 percent. Flatbed haulers, however, experi- enced virtually no change in income in 2014. That reflects flatbedders expe- riencing stronger demand and rates a few years before dry van and reefer haulers, said Gordon Klemp, head of the National Transportation Institute. NTI's National Survey of Driver Wages tracks compensation of drivers at medium-sized and large fleets. "Most of the independent contrac- tors operating in the independent and flat markets are on percent of load- type programs, so their pay adjusts quicker," Amen said. "The indepen- dents are certainly more in the spot market as well. So these two segments reflect a really good freight market last year. They have higher highs in good times and lower lows in bad times, more volatile than the other segments." Sign-on bonuses have been stable in recent months, Klemp said. The midpoint is $3,000 to $6,000, with the top tier $6,500 or more. Team bonuses remain strong, and he has seen them as high as $15,000. Many fleets use bonuses selectively by region to meet demand and often keep high bonuses in place only briefly. – Max Heine Be prepared to deadhead instead of laying over. The time and money lost to a layover almost never can be made up because your daily fixed expenses are spent whether your truck moves or not. The Partners in Business program is pro- duced by Overdrive and the consultants at ATBS, the nation's largest owner-oper- ator business services firm. It is sponsored by Ryder and Goodyear Smart Fleet. The Partners in Business manual is available for order at eTruckerStore.com. The next seminars will be held Aug. 28-29 at the Great American Trucking Show in Dallas. Contractor income hits record high Source: ATBS All segments, leased and independent Independents Dry van Reefer Flatbed 10,000 20,000 30,000 40,000 50,000 60,000 70,000 $52,406 $56,167 2013 2014 $55,329 $60,157 $50,626 $54,490 $47,878 $52,064 $60,440 $60,510 OWNER-OPERATOR EARNINGS GROWTH Because of the driver shortage, a minimum wage for drivers should be $65,000 to $70,000 annually, said Shepard Dunn, chairman of the Truckload Carriers Association. Dunn, of Bestway Express, empha- sized the challenge of driver recruit- ing and retention last month during a TCA convention on the subject. At the same time, he acknowledged there are "plenty of carriers that pay more than that, and they're having the same problems" attracting drivers. Dunn recommended these carrier efforts to help retain drivers: • "Work more with customers on length of haul" to fit drivers' home needs better. • Work with sales representatives to identify more "driver-friendly freight," taking into account factors such as haul lengths and shippers and receiv- ers where detention is not an issue. • Any driver quality-of-life improve- ments "will pay dividends" through recruiting and retention efforts. SPEAKER CALLS FOR $65,000 MINIMUM PAY PARTNERS IN BUSINESS TIP: AVOID LAYOVERS