Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: http://read.dmtmag.com/i/87831
BUSINESS Turnover back to high rates The annualized turnover rate for linehaul truck- load fleets of all sizes surged in the second quarter. Turnover at large fleets exceeded 100 percent for the first time in more than four years, says the American Trucking Associations. For large truckload fleets, those reporting more than $30 million in revenue, turnover rose 16 percent- age points to 106 percent. The last time the rate was above 100 percent was in the first quarter of 2008. "We continue to see steady, albeit sluggish, growth in freight volumes, which increases demand for driv- ers," said Bob Costello, ATA chief economist. "That, coupled with continued pressure on fleets to improve their safety records as a result of regulatory oversight changes, is increasing competition among carriers for drivers with clean histories." At smaller truckload fleets, turnover jumped 15 points to 86 percent in the second quarter. Less-than- truckload turnover averaged 9 percent in the second quarter, up from 8 percent in the previous quarter. GAUGES Reefer and dry van rates reverse course A look at fuel spending since '05 In the past two years, owner-operators have averaged more in fuel spending than they did when fuel jumped to nearly $5 a gallon in 2008, and, when 2012 third-quarter numbers are released, they're likely to show this year's fuel spending as the highest in history. According to owner-operator business services firm ATBS, fuel spending in the past eight years was a situation of either feast or famine — three of the years cracked $6,000 per month, and the other five were $5,000 or less. This year, however, rates kept up with fuel increases, for the most part, and owner-operator take-home pay was nearly $2,000 higher in the second quarter of this year than in the first quarter of 2011. 16 | Overdrive | November 2012 2005 2006 2007 2008 2009 2010 2011 2012 DRY VAN In a month that saw refrigerated and dry van rates reverse their decline, flatbed rates continued their descent, falling another nickel per mile. Still, flatbed has seen the smallest drop in per mile rates since all three seg- ments started falling in July, dropping 16 in the past three months. From June to August, reefer rates dropped 26 cents and dry van dropped 22 cents. In the same span, flatbed had dropped only 9 cents. $2.50 $2.25 $2.00 $1.75 $1.50 Sept. 2010 Average fuel Sept. 2011 Sept 2012 spending per month $4,338 $4,647 $4,853 $6,041 $4,099 $5,008* $6,187 $6,071* *Average of first half; second half data was not available. Driver shortage looms According to trucking data service TruckGauge, a sharp increase in the driver shortage is expected during the next two years. Neither year is projected to be as high as 2004, which had a deficiency of about 260,000 drivers. The imminent shortages are due largely to regulatory changes in hours of service, drug and alcohol test- ing, and other areas of compliance. Aging of the driver pool is another factor. 2009 +135,000 - 60,000 -102,000 -102,000 -180,000 -220,000 2010 2011 2012 2013 2014 FLATBED REEFER Take charge of your escrow payments One potential pitfall in a carrier lease is the handling of escrow payments. Carriers' failure to conform to federal escrow regulations has resulted in class-action lawsuits over the years, filed by the Owner-Operator Independent Drivers Association and others. If you're unsure about escrow terms in a new lease — the amount, its accounting, how it's released — it can be worth your while to have a trucking attorney review it. At the very least, press the carrier to fully explain any unclear language. It's easy to check the law. Escrow provisions are listed in 376.12 of the Federal Motor Carrier Safety Regulations. If you don't have a copy, search "FMCSR 376.12" online. The law says that when escrow funds are required, the lease must specify several things, including: * The total amount required to be paid to the carrier or third party to put in escrow. * The items to which funds from the escrow can be applied. * A provision for interest to accrue at least quarterly. * Conditions the owner-operator must meet to get all the escrow, plus interest, returned. Internet Truckstop