A big milestone in used truck prices was reached in the first week of February when the 3-year-old trucks went below the $100,000 mark. That has gotten the curiosity of the solo owners and small truck fleets riled up about maybe buying some new-to-you equipment, but you might want to wait a bit longer before jumping in both feet first.
Is it a good time to get back into the trucking business if you dropped out after the rate implosion back in Spring ‘22? Small trucking companies are still going and profiting, although at a much smaller amount and having to be very fiscally responsible.
The number of owner-operators cycle in and out with the tides driven by fuel and equipment costs along with the freight rates. A couple of years ago, rates were massive, fuel was cheap, and the number of O/Os was multiplying like rabbits. Then along came the bloodbath, as named by FreightWaves founder and CEO Craig Fuller, and everything got upended.
The national average fuel price rocketed up in early ‘22 to just above $5.84, with some fuel stations hanging $7.00/gallon signs on the West Coast. We’re a good bit off that peak now, with the Diesel Truck Stop Actual Price Per Gallon (DTS.USA on SONAR) sitting at $4.63 on Feb. 9.
Can current rates support a new trucking operation?
Rates are far below their mountain top, with the National Truckload Index, Business Day, Linehaul Only (NTIBL.USA) sitting at $1.77 as of writing. Drivers would love to see $3.00/mile line haul rates again, but unfortunately, we are back at the mid-2020 price right before the COVID pandemic kicked off.
With the supply chain currently in the “don’t need it, don’t buy it” mood, I personally do not see the consumer demand needed in order to push rates back to the extravagant levels they once were. It is a “live off the land” time for drivers, as they look for the best fruit to pick off the load board tree.
My advice to company drivers is to stay at a larger fleet, but if you do not like the position you are in, look for other offerings. Enterprise carriers will always be driven to hire due to their turnover rates, while smaller carriers are still paying very well for experienced drivers to cover the needs of their customers.
Some predict that during the later months of ‘23, the market will start to shift back to a higher demand for goods, bringing the rates back to more favorable terms. A gold rush like we saw during the COVID pandemic was a once-in-a-lifetime event, so study the trucking industry well before you jump into it both feet first.
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