Watch out, spot market bandits, the O-Os are being culled from the mega-herds.
Fleets cut owner-operators as revenue per truck per week rises.
Owner-operators typically work in the spot market. True enough, but they are also a mainstay in many large fleets, providing great service and flexibility of capacity. They are a great strategic tool that can provide a win-win situation.
However, flexible means expansion and contraction, bending to and from, up and down, boom and bust… You get the picture.
Volumes are down and capacity is still very high. This is not good for the spot market as spot rates have fallen dramatically and are well below contract rates.
Contracts react slower in both expanding and contracting markets. Right now, contract prices are solid. Great news for owner-operators working for a big fleet!
Not so fast
The SONAR dashboard above shows several key areas to benchmark your trucking business against. These are the TCA benchmarking indices.
The indices of the day are charted on the right side. Net revenue per truck per week (company fleet and leased fleet – dry van). This is shown in blue and is at its 52-week high.
Compared to this index is the percentage of owner-operators that make up the capacity of those fleets. It is dropping like the proverbial rock.
As if that isn’t enough, the other benchmarking data points are indicating very difficult times ahead.
Empty miles as a percentage are up and near their 52-week high.
Gross fuel expense is at its 52-week high and rising.
Maintenance expense per mile is at its 52-week high.
Stay safe and informed out there during these very difficult times.
Peace and love