Demand for trucking has taken a hit over the past year. Seasoned owner-operators with decades of experience have a better chance of withstanding decreased spot market rates and increased trucking expenses, but new owner-operators aren’t as lucky.
Small carriers are being outbid by larger carriers who can afford to take a small loss to keep trucks on the road. New owner-operators who face low rates or no loads to haul will be worse off if they must park their trucks.
High Costs Impact New Owner-Operators
Mid-2020, the trucking industry was booming. Drivers began to secure their own authority to take advantage of good spot rates and frequent loads. Fast forward to 2023, and things look different, according to a recent FreightWaves survey, which is linked below.
Here’s what you need to know about this trucking industry news:
New owner-operators who bought new equipment or rigs during the boom time are left with lower rates than they anticipated. Today’s market isn’t as reliable or profitable enough to keep their businesses afloat, plus trucking expenses are higher, which could mean they can’t make payments on equipment or keep up with payroll.
Mid-to-large size carriers report decreased profit margins, but their businesses are still doing alright.
Operating costs per mile have climbed more than 30% in two years. Combined with a drop in spot rates, owner-operators have had to make tough choices. You can use our free cost per mile calculator to estimate your operating cost per mile.
Some owner-operators will not have the cash to weather this trucking market recession on their own and may have to leave the industry.
As a new owner-operator, you can’t stay in business if you can’t pay the bills on time. If you’re struggling to keep your truck on the road in the current market conditions, freight factoring can advance cash to your bank account.