ATBS: 2018 Saw a Reduction in Driver Turnover, Increased ELD Compliance

During a webinar to reveal the results of its annual Independent Contractor Benchmarking Study, ATBS President and CEO Todd Amen, highlighted the record year for the industry and the effects of the ELD mandate and reviewed the predictions for 2018 and looked into what 2019 might bring by the year’s end.

“Last year was truly a record year in many ways for our industry and trucking as a whole, especially for owner-operators,” said Amen.

As in year’s past, the presentation began with a look back on the previous year and the predictions that were made for 2018, which included:

• ELD’s full impact won’t be felt until summer 2018 after enforcement in April
• Net income will grow significantly throughout 2018 with robust freight market and limited capacity
• Fleets with attractive operating models (choice and percentage pay) will gain the most owner-operator capacity
• Fleet lease purchase/programs will expand with tax incentives, hot industry and reduced reclassification risks
• Good market should last through at least mid-2019
• Grass is greener mentality will cause a lot of owner-operator change in 2018 – carrier changes, own authority

All but the last prediction was met, according to Amen. Historically, during boom cycles there is a significant turnover in drivers, with significant sign-on bonuses and pay increases being offered by fleets that want to add capacity. But, in 2018, ATBS saw a reduction of 10-20% in turnover versus 2017 in the fleets they partner with to create the annual Independent Contractor Benchmarking Study.

According to the ATBS survey, the overall owner-operator fleet numbers increased by 2.5%, while large fleets grew by 7.5% and fleets with less than 250 trucks grew by 13.7%.

In terms of the ELD mandate, Amen pointed this out as one of the causes of the reduction in miles driven by owner-operator fleets. In 2003, the average owner-operator was running 139,000 miles annually.

“We all know that today, with ELDs, this is physically impossible and log it legally,” said Amen. “If everything was perfect, the average owner-operator could probably run about 120,000 miles, but right now, the average is about 103,000. We’re down 25% in miles in the last 15 years.”

Approximately 80% percent of owner-operators that were compliant were using ELDs before the mandate’s compliance deadline, according to Amen, but there were some fleets that saw a slowdown due to the addition of the new technology.

Amen concluded the webinar with a list of predictions for 2019, including:

• Freight and rates will be moderate through 2019
• There will be a move for some owner-operators returning to fleets, as spot markets suffer
• As the industry bar has been raised significantly, “we won’t return to pre-2018 contract rates again”
• Net income will flatten out and maybe dip a bit in 2019 for owner-operators
• Fleet lease purchase program will help those entering the owner-operator market to expand

“This is going to be a year where [fleets] have to transition their thinking away from it’s all about revenue, to [they] have to manage their costs. The average driver can save $2,500 by just slowing down a bit, managing their fuel economy, not idling as much and just focusing on that cost,” Amen added.