The concept of a “perfect storm” focuses on situations where multiple factors come together simultaneously to create a dangerous or difficult situation. For many owner-operator trucking professionals, a perfect storm may be brewing for 2023.
Facing a Series of Challenges
A recent article on the Trucknews.com website focuses on the special set of circumstances that are coming together to challenge owner-operators in the coming year. One key point of the discussion is that the larger fleets have experienced some of their best years during and since the pandemic. The disruptions in the supply chain have created rising demand with limited capacity, driving shipping rates up.
These factors, combined with the consolidations and bankruptcies in the industry, have allowed the larger fleets to focus on strengths and eliminate less desirable routes and customers.
However, the smaller owner-operator is facing the other side of that coin. Whether or not a full-blown recession hits, demand has lessened with the slowing of the economy. This will lower revenue expectations during this period of increasing costs in every area of operations.
According to Murray Mullen of the Mullen Group, the already higher interest rates will make it tougher on those independents who are looking at replacing their rigs. With limited supply and higher prices on used vehicles (even with the recent declines), many owner-operators have pushed their current Class-8s beyond the normal range for efficient maintenance and safety. Replacing those rigs or leaving the industry will present many of the older drivers with a very tough decision.
Other factors include those already discussed here at Road Scholar Transport. While these affect the trucking industry as a whole, independents are more likely to feel the impact of:
- Increasing regulatory constraints and new laws
- Rising costs for fuel and insurance
- Ongoing supply chain issues
- Extensive infrastructure construction delays.
Overall, the consensus of most trucking experts is that the owner-operator will be squeezed by the slowdown in demand sooner and to a greater degree. According to Overdrive, their read of independents shows the biggest concerns over new regulations and cost pressures.
Not all Negative News
While the year will call for flexibility and monitoring of individual markets, the Overdrive survey did identify some points of optimism. Many drivers feel that 2022 gave them a boost that should carry over into 2023. For those with later-model rigs, the current push on new equipment and interest rates are not an immediate concern.
With improvements in the supply chain, the availability of tires, parts, and other gear should take some pressure off the reliability front for many drivers. Additionally, the shakeout of less efficient drivers and trucks has created additional demand in specific markets.
A growing awareness of and the pressure to implement methods to gain fuel efficiencies is also generating benefits for those drivers who are proactive. While the rising costs somewhat neutralize part of the savings, the right steps at least protect the final bottom line by covering those added costs.
Another area where proactive attention can help weather the storms of 2023 is insurance. Truckers know that those costs have risen nearly 50 percent over the past decade. This is an area that hits independent and smaller firms especially hard.
Because of these increases, some insurance carriers have taken an aggressive stance in going after owner-operators with top long-term safety records. For those who qualify, it can be worth seeking out quality carriers offering tailored packages. Even those drivers with a blip or two on their record may have the opportunity to lower costs by adding certain equipment or training, such as dash cams and cargo security devices.
Other insurance tips include using autopay, matching your coverage with your current truck value, shopping rates before starting a new year of coverage, and looking closely at your garaging location.
Truckers are known for surviving the ups and downs of a challenging industry that brings its own rewards. Doing so in 2023 is another time when a bit of preparation and proactive steps will make a big difference.
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