How Have Owner-Operators Performed so Far in 2021?

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 the year so far and answer some questions including:

  • What impact has the robust freight market of 2021 had on owner-operator net income?

  • Have owner-operators run more or fewer miles so far in 2021?

  • How have rising maintenance costs impacted owner-operators this year?

  • What does the rest of 2021 have in store for owner-operators and the trucking industry?

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


Miles


The average ATBS client is running just over 100,000 miles per year. This means miles are down 1.5% year over year or 1,548 miles overall.


The fact that miles are down does not come as a huge surprise as we often see that owner-operators tend to run less and take time off when rates are high. When rates are good, we assume owner-operators would prefer to make the same amount as they would normally make while needing 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 100,000 miles per year.


Revenue


Revenue per mile is up to $1.55. This is an increase of 5% year over year or, $0.07 cents per mile. The biggest increase we saw was in the flatbed segment at 0.15 cents per mile.


Similarly to revenue per mile, gross revenue is up to $156,306. This is an increase of 3%, or $4,375. And just like revenue per mile, flatbed saw the biggest increase in gross revenue at a 6.4% increase. However, every segment is up in both revenue per mile and gross revenue. Flatbed tends to increase the most as things are going well and decrease the most as things are going poorly.


Fuel


If you’ve been out on the road, you know that the price of fuel has gone up consistently over the past eight months. This comes as no surprise as it was so cheap throughout 2020, the price had no choice but to increase. However, there are a variety of reasons why the price of fuel is increasing which you can learn about by clicking on the link here.


Fuel was so cheap last summer that even though the price of fuel is high right now, year over year the cost of fuel is still down two cents per mile. On average, ATBS clients are spending 39 cents per mile for fuel.


Fuel Mileage


As the price of fuel is going up, the average MPG is going down. MPG improved significantly last year during the pandemic because there was little to no traffic on the road. As things are starting to open up and people are starting to get back out, we’ve seen MPG start to decrease.


ATBS clients are averaging 7 MPG with the best MPG coming in the dry van segment at 7.4. Overall, with the increase in revenue per mile and the decrease in fuel cost per mile, the average ATBS client is up almost $7,000 from this time last year.


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 $2,450 per month. However, a few other factors are currently causing the average monthly truck payment to increase more rapidly than normal.


Right now, the trucking industry is currently experiencing a truck shortage. Plants have been shut down due to the pandemic, parts and chips have been harder to come by, and the plants that are open do not have enough labor to meet the demand. This means that new truck orders are 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. The increase in the price of both new and used trucks is showing no signs of slowing down any time soon.


Maintenance


On top of the truck shortage, maintenance costs rising is another big problem the trucking industry is experiencing. These two problems sort of go hand-in-hand. Fleets and owner-operators are forced to drive older trucks longer than they want to be driving them, which means they are breaking down more frequently, which is leading to maintenance shops to get backed up. This is just one of the reasons labor time and maintenance costs have increased.


Similar to the truck plants, maintenance shops have also seen a labor shortage and have had a hard time getting parts. This has caused maintenance costs to be up about 10% for ATBS clients year over year. Specifically, they spent $11,700 dollars on maintenance last year, which comes out to 12 cents per mile.


All of this means you need to be setting more money aside and put a good maintenance savings plan in place. You also need to be proactive with your preventative maintenance when you have home time so you can catch a potential problem sooner so it won’t be as costly or take as long to fix


Because freight rates are so high, the opportunity cost of missing out on the revenue that is out there is exponential. You aren’t just losing the money you are spending on maintenance costs but also the money that is available for you to earn.


Net Income


Despite the increases in fuel, maintenance, and truck payments, business is looking really good for owner-operators. ATBS clients are up 10.2% year over year and are bringing home over $70,000 on average. This is up from $65,000 at this time last year.


Even though the pandemic has greatly affected our day-to-day lives, overall, quality of life has improved for owner-operators as they are able to make $70,000 in net income while only running 100,000 miles. This is about 70 cents per mile which is way better than you can make as a company driver. With costs on the rise, the best thing you can do right now is continue to run hard and make hay while the sun shines.


Rest of 2021 Freight Outlook

These record-breaking freight rates aren’t going away any time soon. Usually, when rates are good, fleets will flood the market with capacity, which will drive the price down. However, there are no trucks to buy and no quality drivers to hire. This means that we see freight rates being good for a while for those who are continuing to run. We will probably continue to see these types of numbers through the end of 2022.


While rates are so good and revenue is so high, take this time to improve the quality of your business. Take the extra money you might be making and set yourself up for when rates take a turn. This way you can continue to be successful through the good times and the bad.

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