Although independent truckers drove more miles in 2016 than in the prior year, they made less money.
That’s the finding of a survey of 20,000 drivers by American Truck Business Services, an industry accounting and consulting firm.
The earnings for drivers who own their own big rigs, or owner-operators, dropped 4.6 percent to $60,577 in 2016 from $63,375 in the prior year.
The income for leased owner-operators – drivers who own their own trucks, but drive loads under a motor carrier’s operating authority, or permission to transport goods for profit granted by the Federal Motor Carriers Safety Administration – averaged $59,699, down 2.5 percent from $61,167 in 2015.
Driver earnings fell because of a soft freight business environment in 2016, Amen said.
Despite a rocky economy, owner-operators “got tough and drove harder,” said Todd Amen, chief executive of Lakewood, Colo.-based American Truck Business Services, or ATBS.
Owner-operators drove an average of 1,078 more miles in 2016 for a total of 110,740 miles. Dry van truckers drove an average of 116,231 miles, up 1.2 percent from the previous year; reefer drivers drove 125,521 miles, up 1.2 percent; and flatbedders drove 90,670 miles last year, up 1.4 percent, Amen said.
Mileage pay is a legacy system put in place when it was difficult to observe drivers, according to Steve Viscelli, a University of Pennsylvania sociologist and author of the book The Big Rig: Trucking and the Decline of the American Dream. “Now these companies, or the majority of them, can be monitored directly by satellite technology so they know where their driver is, they know if they are rolling or not.”
Survey respondents had split opinions on how 2017 will turn out.
Half think things are “great,” while the other half think “we are headed for the worst recession ever,” Amen said.
Tim Philmon, a 35-year trucking veteran from Middleburg, Fla., said last year was definitely a down year for his business.
Philmon failed to sign long-term contracts and was forced to chase loads on the spot market. But with countless other truckers vying for the same loads, the spot market dried up, Philmon said.
At times, Philmon had to drive deadhead, or without a load, 400 miles to a destination just to get a haul, Philmon told Trucks.com.
“My only saving grace was that fuel prices dropped in 2016,” he said.
A flatbedder for most of his trucking career, Philmon, who has his own authority, invested in new equipment and headed to the oil fields in West Texas to become a company driver in late 2016, hoping for better rates and higher pay.
Truckers with their own authority incur all the business expenses. In a down market, being a leased operator shifts some of the financial burden onto the motor carrier.
Rates weren’t as lucrative as Philmon had anticipated, and the maintenance and expenses for the wear and tear on his truck were too high, so he went back to Florida after a few months to work as a leased operator until economic conditions improved.
A good way for drivers to increase their earnings, is to go to work for a private carrier, a less than truckload carrier or a specialized carrier that will compensate based on having a clean driving record and stable work history, Viscelli said.
There is also a correlation between increased driver pay and safety, he said. “if you pay [drivers] more they are going to be more responsible drivers.”
Some drivers did do better.
Henry Albert of Statesville, N.C., said his income remained steady throughout 2016. He credits sticking to his long-range contracts and not jumping on the spot market when freight rates peaked.
“Even though spot rates were extremely hot at times, I kept my dedicated customers happy,” Albert told Trucks.com. “In the long term, that strategy paid off because the spot market, which can be good to you at times, can turn on you.”
Looking ahead, Amen is watching for the implementation at year-end of the government mandate forcing drives to use electronic logging devices, or ELDs, to track their driving. That could drive some owner-operators from the industry.
The loss of these drivers – who would rather leave than put a logging device of their truck – could amount to 8 to 12 percent fewer miles on the road. Fewer trucks could force rates up 10 percent by mid- to late 2018, Amen said.
He predicted driver earnings would remain flat for most of the year and increase slightly by the end of 2017, he said.
But the future looks bright, according to Amen.
2018 to 2020 is going to be the “longest and best run for owner-operators,” he said.
Some drivers say the market has already turned up.
While 2016 was “dismal” said Linda Caffee, a driver from Silex, Mo., “2017 is really starting out fantastic.”