Overdrive

September 2017

Overdrive Magazine | Trucking Business News & Owner Operator Info

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BUSINESS 20 | Overdrive | September 2017 BY JAMES JAILLET Net income for leased and independent owner-opera- tors dipped about $255 in the first half of 2017 com- pared to the same period a year ago, according to ATBS, the nation's largest owner-operator business services firm. Mileage in the first half of the year was up com- pared to the same period in 2016, meaning owner-op- erators have worked more this year to earn less. Income losses for reefer haulers drove the declines for leased operators. Flatbed operators had strong gains, while dry van haulers saw net income rise slightly. Independents on average made $29,642 in the first six months of the year. Leased operators on aver- age cleared $29,291. "Income being down a couple percent is not surprising, given the dif- ficult freight environment we've been in," says Todd Amen, president and chief executive officer of ATBS. Fuel costs rose more than $3,000 for all seg- ments despite cheaper diesel prices. Amen says relatively cheap diesel may be partly to blame, as owner-operators typically drive faster when prices are lower, thus burning fuel at a higher rate. Independents drove almost 500 more miles on average, and average rev- enue grew $4,055. Higher fuel costs, $3,060, ate into the stronger revenues. Reefer haulers took the biggest hit in the first six months. Leased reefer operators' net income dropped $2,947 to $24,213. Owner- operators in the segment drove 1,123 fewer miles in the first half of 2017. Revenue, however, was up nearly $1,500 on average. Higher fuel costs and maintenance costs sunk reefer haulers' net income. Fuel costs rose $3,297 in the six-month period, and maintenance costs climbed $1,111. Flatbedders, mean- while, earned $33,130 in net income, $1,849 more than in the first half of 2016. They drove nearly 1,000 more miles, and revenue climbed $5,428. Fuel costs jumped by $3,795. Van haulers' income rose $75 to $29,763. Owner- operator van haulers drove about 316 more miles in the first half of the year, and revenue climbed $3,544. Fuel costs also climbed, up $3,377. Reefer niche depresses average income In the first half of 2017, flatbed owner-operators earned more than $1,800 above the same period in 2016. Other seg- ments didn't fare as well. The best-prepared owner-operators have at least $5,000 in reserve before they ever go into business. That amount should be maintained and increased, especially with a truck that ages. The purpose of a reserve account is to cover large or unforeseen costs that could put a drain on operating cash – major maintenance items, tires, quarterly estimated taxes and insurance deductibles, for example. The Partners in Business program is produced by Overdrive and the consul- tants at business ser- vices firm ATBS. It is sponsored by Ryder and Truckstop.com. PARTNERS IN BUSINESS TIP: HAVE A RESERVE ACCOUNT

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