How Have Owner-Operators Performed so Far in 2022?

Updated: Oct 3

Twice a year, ATBS provides an analysis of the financial trends for owner-operators in the trucking industry. With 2022 bringing diminished spot market freight, falling freight rates in several markets, high equipment costs, extremely high fuel prices, and a looming recession, how did owner-operators manage?


In this article, we'll give a recap of the year so far and answer some questions including:

  • Why are miles and utilization continuing on a downward trend even in tough market conditions?

  • How did drastically higher fuel costs impact independent contractors' bottom line?

  • How did the diminishing spot market change the dynamic of the IC population?

  • How did inflationary costs for trucks, fuel, maintenance, and insurance impact owner-operators?

  • What are the best ICs doing to change with the times?

If you have any further questions, please feel free to reach out.


Miles

The most surprising thing we saw during the first half of 2022 was the major downturn in miles. The average ATBS client is running just over 90,000 miles per year. This means miles are down 10.7% year over year or almost 11,000 miles overall.


There are many reasons for this major drop in miles and every IC probably has their own take. First, the fact that miles are down by such a large margin tells us that things aren’t so bad yet for owner-operators. This is because we often see that owner-operators tend to run less and take time off when times are good to improve their quality of life.


Miles may also be down because the huge labor shortage at shippers and receivers has caused drivers to wait around a lot longer than normal for loading and unloading. This leads to inefficient use of the hours of service available. Some drivers may have also parked their trucks altogether while the price of fuel was high in Q2 to bring down the averages.


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 90,000 miles per year. As things get tougher in the market, miles may start to shift back up.


Revenue


Revenue per mile is up to $1.90. This is an increase of 22.5% year over year or $0.35 per mile. The biggest increase we saw was in the dry van segment at $0.37 per mile. The vast majority of this incremental revenue gain was due to the increase in fuel surcharge.

Similarly to revenue per mile, gross revenue is up to an average of $171,069. This is an increase of 9.4%, or $11,515. And just like revenue per mile, dry van saw the biggest increase in gross revenue at 11.7%. However, every segment is up in both revenue per mile and gross revenue. Once again, most of this is due to high fuel costs increasing the fuel surcharges. The rates owner-operators received on freight actually only adjusted minimally.


Fuel

If you’ve been out on the road, you know that the price of fuel has increased to record numbers during 2022. This was due to inflation, the crisis in Ukraine, and loosening COVID restrictions getting people back out on the road.


Year over year, fuel is up to $0.60 per mile. This is an increase of 52.6% or $0.21 per mile. Specifically, June saw an increase of $0.85 per mile. That type of increase is truly unprecedented. Since June, we’ve seen fuel continue to decrease at a steady pace. Hopefully, this trend continues until fuel costs flatten out at a more manageable cost. Either way, a good operator getting maximum fuel efficiency shouldn’t have to worry about the cost due to the fluctuating fuel surcharge.


Fuel Mileage

As the price of fuel is going up at a record pace, it seems most owner-operators have not changed their habits yet to get better fuel mileage. We see this as another pretty big surprise but it just goes to show the average owner-operator's bottom line hasn’t been impacted enough to make changes yet.


MPG improved significantly in 2020 during the pandemic because there was little to no traffic on the road. As things started to open up and people started to get back out, we saw MPG start to decrease and have flattened out.


Our top-performing owner-operators have improved their fuel efficiency and are earning more money. This is due to not having to go to the pump as often as well as the increased fuel surcharge they’ve received. Fuel is an ICs biggest cost, but also the one they can impact the most through their own habits. Remember, every dollar saved on fuel is profit in your pocket.

ATBS clients are averaging 6.98 MPG with the best MPG coming in the dry van segment at 7.42. The differences from now compared to 2021 are pretty flat overall. The biggest increase we saw was for independents. This is not a huge surprise as independents needed to make the biggest adjustments in order to stay in business.


Truck Payments

Over the years, as trucks have become more advanced, the average truck payment has continued to go up. Right now, the average truck payment is $2,600 per month. There are a few factors causing the average monthly truck payment to remain pretty high overall.


Right now, the trucking industry is currently experiencing a truck shortage. Plants have been backed up due to labor issues and parts and chips have been harder to come by. This means that new truck orders are still a year out and plants are no longer offering discounts for bulk orders. The situation has become so desperate that carriers are taking trucks unfinished just to have enough trucks to meet the number of drivers.


This means that used trucks are up almost 100% because of how hard it is to get a new truck. An owner-operator could sell their truck for about double what they bought it for last year. This trend has started shifting in the other direction and prices are going down, but are still extremely high overall.


Maintenance

Maintenance continues to be the number one reason for owner-operator turnover. This is because the cost of maintenance has skyrocketed over the past couple of years. There continues to not be enough mechanics and not enough parts which is causing increased prices and long wait times.


Maintenance is down 3.5% but miles are down 11%. If miles are down this much more than maintenance, it means maintenance costs per mile continue to increase. In June alone, the average ATBS client was spending $0.14 per mile on maintenance.


If you haven’t already, your thoughts on maintenance need to be shifted. You need to reevaluate how much you set aside for maintenance and how often you need to go in to get your truck looked at. If an unexpected mechanical issue appears, you need to make sure you can afford to take the time off in order to continue to pay for your business expenses as well as your at-home expenses.


Net Income

Despite the increases in fuel, maintenance, truck payments, and a huge decrease in miles, business is still looking good for owner-operators. ATBS clients are only down 1.5% year over year and are bringing home just under $70,000 on average. This is only down $1,048 from this time last year. The fact that net income is down so little is why drivers haven’t changed their driving habits much.


Overall, flatbed being down is a little concerning on a macroeconomic level. This is because the flatbed market is typically a leading indicator of how the economy is doing overall. However, even though we may be shifting towards a tougher economic environment, the data tells us this isn’t fully the case quite yet.


Rest of 2022 Freight Outlook

Although you continually hear that freight is softening, we are still far above pre-covid levels. It seems a new floor has been set due to increased costs, truck shortages, driver shortages, and all the factors mentioned above. The overall feeling is that freight markets are normalizing after spending nearly two years at all-time highs. The spot market took the biggest hit, which has caused ICs to shift back to bigger motor carriers running contract freight.


The best businesses and ICs are doing as well as ever. The increased cost of fuel gives drivers the chance to improve fuel efficiency, run a little harder, and continue to succeed in trucking! The bottom line is that ICs control their own destiny, and they can make changes today to ensure profitability and success!

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