Driver pay decreased in 2016, 2017 looks better



Posted on 03/24/2017 by David Radke

Driver

A recent study from trucking services firm ATBS found that the average owner-operator in the U.S. saw wages decrease slightly in 2016. Commercial Carrier Journal reported drivers operating leased vehicles were paid $59,699 on average in 2016, while independent operators earned $60,577 on average. Both figures are lower than average pay reports from 2015, when owner-operators earned about $61,167 and independent drivers reported $63,375.

Somewhat more disheartening is the fact that owner-operators also drove more miles in 2016, but earned less than the prior year. The ATBS study found that pay rates were much flatter for owner-operators last year. This was slightly offset by lower fuel costs.

Even other niche categories of trucking seemed to fare worse in 2016. Flatbedders reported the highest average income of all with $63,959, but also saw one of the largest year-over-year decreases, having made an average of $70,464 in 2015. Van haulers and reefer haulers rounded out the pack, averaging $60,424 and $52,274, respectively.

Pinpointing the exact reasons why many categories of truckers earned less in 2016 is difficult. According to CCJ, freight volume was simply lower in 2016 thanks to a wide number of complicating economic factors. Many of the nation's largest trucking firms reported lower revenue and net income in 2016 compared to 2015, although several still reported a net profit regardless.

Driver pay set to rise in 2017

On the bright side, analysts expect 2017 to be a better year for driver pay. Overdrive Magazine reported that Bob Costello, Chief Economist of the American Trucking Associations, is optimistic on this year's financial outlook. Costello based his prediction on several broader measurements of economic activity in the U.S., which have lately been strong.

Primarily, consumer confidence and spending is near its highest since the 2008 recession. Although U.S. general economic growth (measured as gross domestic product) was less than 2 percent in 2016, consumer goods consumption rose by about 4 percent by the end of the year. Consumer confidence remained high going into 2017, as evidenced by strong gains in the stock markets. The fact that the Federal Reserve decided to raise interest rates March 15 also signals an improving economy. Even housing sales and construction activity are good news for truckers. Costello posited that as more new homes are built, materials hauling would stand to benefit.

All things considered, Costello estimated total freight tonnage would increase by about 2.6 percent in 2017, after remaining almost flat in 2016. One of the few areas of concern, according to Costello, is lagging factory output. This economic indicator stalled in recent years after logging a more impressive growth rate of 3 percent per year from 2010 to 2014.

Costello noted that while factory output has shown recent signs of improvement, a new political landscape has made some nervous regarding trade. The North American Free Trade Agreement has recently come under federal scrutiny, and any rollback of these policies could hamper domestic production growth. Overall, the picture looks much brighter as the first quarter of 2017 draws to a close.

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