Why Owner-Operators in Trucking Must Collect to Survive
The trucking industry has experienced significant changes since 2019, with notable shifts in owner-operator statistics, industry revenues, and operational challenges.
According to BTS as of November 2023, there were 922,854 independent owner-operators in the U.S., accounting for 11.1% of all truck drivers. In 2024, the average annual income for owner-operators was approximately $93,000.
Why do so few choose to become owner-operators? While it offers the freedom to run your own trucking business, it comes with significant costs. From fuel and truck payments to insurance, trailer payments, and more, the financial responsibilities can quickly add up. As an owner-operator, you’re also responsible for your own health insurance and tax preparation—adding even more to the monthly burden.
Owner-operators typically earn between $1.30 to $1.65 per mile, but unlike salaried employees, they don’t have guaranteed pay for everyday expenses like meals or downtime. Add to that the costs of deadheading to another pick-up site, hotel stays, accounting fees, and taxes, and it’s clear that the expenses pile up quickly.
Despite earning an average of $183,000 annually, independent owner-operators are left with only $50,000 to $60,000 after covering the 70% of costs that come with running the business.
So, while being your own boss in trucking has its perks, it requires smart financial management. Owner-operators often face challenges with delayed payments, especially when hauling loads directly for companies. Utilizing collection agencies can be an effective way to manage unpaid invoices, as business debts are generally easier to collect than personal debts.
The $12,000 per year mistake
One way to boost independent owner-operator profitability is to reduce fixed costs, and of those costs, one of the most expensive, and the one with the biggest variety of charges is truck insurance.
As One Rich, an owner-operator and a Youtube content explains, truck insurance varies wildly from state to state. As he explains in his video, this owner-operator was paying $1,800.00 for his Truck Insurance. It was only after consulting with other owner-operators that he discovered that because he received his insurance in Florida, which has one of the highest insurance rates for trucking insurance in the country, he was paying as much as $12,000 extra over trucker who bought their truck insurance in Texas.
Ask any owner-operator and they will tell you that saving $1,000 a month on truck insurance can make or break an independent operator. Other ways to reduce expenses significantly for an independent owner-operator include buying used rather than new.
A semi-truck that is well taken care of can expect to last 15 years or so. By buying a truck even three or four years old, providing you have it inspected by a professional truck mechanic can lower your monthly payments down four hundred dollars or more.
In general, the best deals for a used semi come from buying truckers you know who are personally selling because they’ve either bought a new truck, or they are retiring from trucking. But good bargains can be found.
Using a collection agency to collect unpaid invoices.
Of particular concern by owner-operators is when they get paid not by individual miles logged, but by a percentage of the load. Of all the truck drivers out there, approximately 50 percent of those are paid as a percentage of the load. The percentage rates can be as low as 25 percent to as high as 85 percent. Generally, most owner-operators wind up getting loads from a certain carrier or two. Which means that if you work for a carrier, then they will pay you directly, whether you work for a carrier, then you’ll get paid by them, and no viable carrier will ever risk missing their payments to truckers.
Worry comes for independent owner-operators when they haul loads directly for companies rather than picking up a load through carriers. The problem here is that they may wind up getting paid 30 to 40 days or more from independent businesses, even though their operating expenses remain fixed. If an independent owner-operator accepts a load outside of the typical carrier conduit, he may make more money overall, but that is as long as the owner-operator can collect.
Too many unpaid or overdue invoices from an independent-operator may cause the independent owner-operator’s business to grind to a halt. Very few can afford to not get paid on two or three invoices a month. So what option does an owner-operator have if he doesn’t get paid after delivering a load? Basically two: hire an attorney or hire a debt collector.
Attorneys are great at sending threatening letters and taking a business to court, but the problem here is that a business attorney may charge $150 an hour for his service. The alternative is to contact a debt collection agency. Business debts are generally easier to collect than personal debts as business wants to remain viable, and the delay in payment are sometimes simple mistakes. Rather than spending time chasing the debt yourself, which 99 percent of the owner-operators don’t have the time to do, a typical collection agency may collect on many of your past-due invoices for a small percentage of the total.