First Quarter 2019 Trucking Industry Update From ATBS
Updated: Oct 7, 2021
by Todd Amen, ATBS President and CEO
Throughout the year, ATBS tracks and analyzes income and mileage trends from our owner-operator clients. We’ve noticed there is some discontent right now amongst both owner-operators (O/Os), and the trucking industry in general. We sense it’s the result of a normal (slower) first quarter versus the gangbuster year we experienced in 2018. It will be nearly impossible to beat the benchmarks set in 2018 because it was such an extraordinary year!
In the first quarter of this year, O/O miles overall were down almost 2,000 miles (down 7.3%) vs Q1 2018. This reflects the softness O/Os are feeling in the market. However, revenue per mile was actually up 8 CPM (up 5.2%) in Q1 2019 vs Q1 2018. So, net/net, total overall revenue for Q1 2019 is down $967 (down 2.5%) vs Q1 2018. Regarding specific operating segments, revenue is down 5.2% in the Flatbed segment and down 1% in the Reefer segment. The Dry Van segment is on par with the average.
Bottom line results show net income is down $240 (down 1.5%) in Q1 2019 vs Q1 2018. The Refrigerated segment is performing strongly year-over-year with net income up $959 (up 7.6%). Both the Dry Van and Flatbed segments show net income down approximately 4% (down approximately $650).
We believe the key to having a successful 2019 is realizing the world has changed. 2018 was all about revenue generation whereas 2019 will be more about the cost side of the business. For 2019, we anticipate lower miles and rates compared to last year. So, don’t be overly picky on loads; take what you are offered if it provides reasonable revenue. It’s far better to generate revenue and contribution margin than sitting and digging a hole with business and personal fixed costs building up. At the same time, have a razor-sharp focus on the cost side of your business. If you generate a dollar of revenue, only a fraction of that dollar makes it to your pocket as profit. If you cut a dollar of cost, 100% of that dollar goes in your pocket. You can save $5000 on fuel alone if you manage it properly. For a reminder on tips to save on fuel costs, click here.
The message for 2019 is fairly simple. While things might not be quite at the level they were in 2018, the fact remains this is one of the best times ever to be an owner-operator. You became an owner-operator for a reason; to be in control of your life and in charge of your own business. Just make the necessary adjustments and your bottom line will remain strong in 2019!