A new economic outlook report from ATBS says a general sense of discontent is present among the...

 A new economic outlook report from ATBS says a general sense of discontent is present among the company’s owner-operator clients now.

Photo: Dart Transit

American Truck Business Services President and CEO Todd Amen said in an economic forecast released by the company on May 15 that a “softening” owner-operator market in North America is creating some discontent, but added that these conditions are to be expected following an “extraordinary” 2018.

Throughout the year, ATBS tracks and analyzes income and mileage trends from its owner-operator clients, Amen noted in the report. He said a general sense of discontent is present among the company’s clients. Still, Amen downplayed any sense of alarm, noting that, “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, ATBS found that owner-operator miles overall were down almost 2,000 miles (-7.3%) compared to the first quarter of 2018. The report said this trend reflects the softness owner-operators are feeling in the market. However, the report added, revenue per mile was actually up 8 cents per mile (5.2%) vs. the first quarter of last year.

Taken as a whole, the report said total overall revenue for the first quarter of 2019 is down $967 (-2.5%) compared to this time last year. 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 outlined in the report show that net income is down $240 (-1.5%) in the first quarter of this year compared to 2018. The refrigerated segment is performing strongly year-over-year with net income up $959 (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,” Amen said in summarizing the report. "Last year 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," he added, "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."

All in all, Amen said, the message for 2019 is fairly simple: While things might not be quite at the level they were in 2018, this is still one of the best times ever to be an owner-operator, in the company’s estimation. Just make the necessary adjustments and your bottom line will remain strong in 2019, he concluded.

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