It’s no surprise that the current economic climate is a huge source of concern for business owners. Tariffs and other rapidly changing conditions are making it problematic for owners to properly allocate financial and human resources to maintain their operations—let alone expand.
Nowhere is this dynamic more evident than in the trucking industry. To ensure safe and cost-efficient operations, carriers typically look to replace trucks every four years, with most companies recycling a quarter of their fleets every year. While this has always been an expensive proposition for the industry, economic conditions are making the purchase of new replacement trucks practically unworkable.\Due to steel and aluminum tariffs, the costs of new trucks delivered prior to June have increased between $3,000 and $5,000, and this doesn’t take into consideration the effect of tariffs on future orders. On top of this, credit is tightening, resulting in monthly payments escalating some $1,700 per truck over previous years. In addition, tariffs will almost certainly have a detrimental effect on the volume of freight transported, making the economics of buying new replacement trucks even more challenging. As a result of all these factors, it shouldn’t come as a shock that new truck orders have plummeted 34 percent compared to 2024, and it doesn’t seem like this situation will change any time soon.
And it isn’t just new truck purchases that are taking a hit. The cost of maintaining the current fleet is also more expensive. Tariffs on parts add to operating costs, making it even more difficult for carriers to meet safety and emissions standards in an affordable manner.
A Path Forward: Transitioning Drivers to Owner-Operators
But the situation is not hopeless. By using PowerLease to transition salaried drivers to true owner-operators, trucking companies can remove the financial burden of refreshing their fleets, investing in parts inventory, and maintaining head count in a volatile market—while giving their drivers an opportunity to build income and own assets—without having to invest extensive capital in the process. PowerLease can also purchase a carrier’s ex-fleet trucks and provide financing to the converted owner-operator on that vehicle, providing a solid asset management strategy for the carrier and increasing their bottom lines, creating a win-win scenario for both parties.
The move to owner-operator status offers substantial benefits to drivers who are looking to improve their own financial security. One of the more immediate is that it secures an income stream for drivers in the event of carrier layoffs and restructuring. This has become more apparent in recent weeks as trucking companies try to properly plan for the effect of tariffs and the corresponding reduction in freight. Several companies have already indicated they will furlough drivers and take trucks off the road. Owner-operators that have contractual relationships with carriers are less prone to these draconian measures, and have a much better chance of maintaining consistent income through any economic downturn.
By The Numbers
The financial gains for drivers to shift from salaried driver to owner-operator status is compelling. An individual that chooses this route can see their annual income escalate some 13 percent.. PowerLease has removed many of the traditional barriers drivers faced in transitioning to owner-operators by providing zero down financing, easy credit conditions and ownership of the truck at the end of the term. PowerLease finances the truck and while the driver enters into a contractual relationship with the carrier, securing their economic independence as an owner-operator. Through this initiative, drivers become entrepreneurs, gaining control of their careers and embarking on a journey to build a long-term business that will provide well for their families.
For their part, carriers can experience profound cost savings through this model. Assuming that operating variables—mileage, registration, insurance, and income per mile remain consistent—the economic gains afforded to the carrier are realized in multiple categories. Foremost, the need to replace or maintain trucks is removed by shifting truck ownership and compensation to the owner-operator.
As a thumbnail, consider that the current price of a new truck is about $200,000. If a trucking company owns a fleet of 100 trucks, and replaces one-fourth of them every year, that’s an annual five million dollar investment. PowerLease’s program reduces capital requirements, allowing carriers to reduce the strain on their credit lines while driving increased profitability, resulting in a much higher return on invested capital.
Then consider the labor costs for those assets. The average salary and benefits package in the industry is around $80,000. If the carrier elects to transition 25 drivers into owner-operators, this results in another $2 million in OPEX savings for the trucking company.
In the models we’ve looked at, a vehicle that travels around 120,000 miles per year will generate roughly $2.80 per mile, regardless if the truck is company- or driver-owned. On the expense side, however, things change quickly. Through the owner-operator model, the per mile costs are decreased, elevating income per mile by over three percent. These margins add up quickly on an annualized basis, giving carriers a substantial financial cushion while also maintaining high service levels by leveraging experience and professional drivers.
Conclusion
It’s an uneasy time to be in the trucking industry, and we’re seeing historic price increases for new trucks. But it’s no reason to push the panic button. By shifting salaried drivers to owner-operators, trucking companies can reduce costs, keep their customers satisfied, and bolster their finances to reinvest in their business when certainty returns to the market.
