Twice a year, ATBS provides an analysis of the financial trends for owner-operators in the trucking industry. With 2021 being an unprecedented year, examining the results of the past 12 months has unveiled some surprising results.
In this article, we'll give a recap of last year's trends and answer some questions including:
Why do owner-operators run fewer miles during times of high demand for their services?
How did fuel cost increases of over a dollar per gallon affect owner-operators in 2021?
How did robust demand affect the owner-operator population and where they chose to operate?
How did inflationary costs for trucks, fuel, maintenance, and insurance impact owner-operators?
With high demand and equally high inflationary costs, what was the owner-operator's bottom line for 2021?
The average ATBS client ran just over 95,000 miles per year. This means miles were down 7.7% year over year or 7,994 miles overall.
The fact that miles are down does not come as a huge surprise as we often see owner-operators run less and take time off when rates are high. When rates are high, we assume owner-operators would prefer to make the same amount as they would normally make while being able to work less. This way, owner-operators are able to spend more time at home and off the road.
Overall, miles have dropped significantly over the past 20 years. In 2003, owner-operators averaged about 140,000 miles per year, and today, they are down to a little over 95,000 miles per year.
Revenue per mile increased to $1.70. This is an increase of 16.6% year over year or, $0.24 per mile. The biggest increase we saw was in the flatbed segment at $0.31 per mile. Roughly half of the increase came in the form of a fuel surcharge but the other half was due to an increase in rates.
Similarly to revenue per mile, gross revenue went up to $162,539. This is an increase of 7.6%, or $11,515. And just like revenue per mile, flatbed saw the biggest increase in gross revenue at an 11% increase. Flatbed tends to increase the most as things are going well and decrease the most as things are going poorly. However, every segment is up in both revenue per mile and gross revenue.
Total Costs - Average All Market Segments
Fixed costs were up only 2.1% to $51,630. This includes truck/trailer payments, permits, and insurance. Variable costs were up 17.3% to $60,255. A major portion of this increase was due to fuel but maintenance increased significantly as well. This means total costs were up a total of 9.8% to 111,885. This means it's now about 20 cents more per mile to operate your truck compared to 2020.
If you were out on the road in 2021, you know that the price of fuel went up consistently over the year. Overall, the fuel CPM ended up going up by 33.7% to $0.48. Every segment increased by over 30%.
The information presented above only represents the increase in the cost of fuel for 2021. The price of fuel has increased significantly since then in 2022. To learn more about how the rising cost of fuel may impact your business, click here.
As the price of fuel is going up, the average MPG is going down. MPG improved significantly in 2020 during the pandemic because there was little to no traffic on the road. As things have opened up and people are starting to get back out, we’ve seen MPG start to decrease.
ATBS clients averaged 6.89 MPG with the best MPG coming in the dry van segment at 7.31. When drivers are doing well and making a lot of revenue, they tend to not care as much about their costs. When rates are good, driving faster to get to the next load is seen as more important than focusing on fuel efficiency. With the current cost of fuel in 2022, ICs need to find a balance between chasing high revenue and getting better fuel efficiency.
Right now, the average truck payment is over $2,700 per month. The main reason truck payment costs are increasing is the truck shortage. There are a few factors that are causing this:
New truck orders are one year out
Plants were shut down and are slowly ramping back up
Used trucks are up 100% year over year
Fleets can’t sell old trucks because they have no new trucks
The increase in the price of both new and used trucks is still not showing any signs of slowing down.
Despite the increases in fuel, maintenance, and truck payments, business was good for owner-operators in 2021. On average, ATBS clients were up 5.1% year over year and brought home $71,218 on average. This is up $3,476 from last year. This is only the average and many owner-operators performed better than this.
Overall, quality of life has improved for owner-operators as they are able to make over $70,000 in net income while running a little over 95,000 miles. Miles are down by more than 40,000 per year while net income is up by almost $25,000.
2022 Freight Outlook
Freight has slowed in recent weeks, down slightly from all-time highs. Even with the slowdown, we are continuing to see rates that offer huge profit potential. Combine still better than normal freight rates with an efficient operation, and you’ll have a great year. Paying attention to the cost side is more important than it’s been in years, especially in terms of fuel and maintenance.
By running hard and paying attention to your fuel efficiency, there is no reason owner-operators shouldn't have a very profitable 2022.