Risk mitigation is the name of the game for owner-operator Steve Allington
April 21, 2020
OOIDA member and owner-operator Steve Allington saw the economic storm coming several weeks ago. He began adjusting his loads from over-the-road to short haul, taking runs closer to home and operating on a cost-per-day business model that made more sense to him.
Allington operates out of Springfield, Mo., and notes that the four-state region of Missouri, Kansas, Oklahoma and Arkansas area has been historically good for spot-market freight.
“I’m in a good freight area,” he said, “and as I saw the effect this (pandemic) was having I realized it would just be safer and a better idea to stay within a couple-hundred-mile radius of home.”
A regional model also changes up his load planning. He has set his sights on a daily minimum amount of profit acceptable. Recently he’s found the better-paying loads to be some of the heaviest – juice, water, sports drinks and other liquid grocery items.
Allington found the load-ratio to be against him but the risk mitigation to be worth it. Putting the least amount of mileage and wear and tear on the truck, not to mention the number of miles between him and his family, is working for him now as an owner-operator.
“I’m going to stay out until it doesn’t make sense to do so anymore,” Allington said. “I’m lucky to have fairly low overhead. I take pride in my ride, but I didn’t invest in a bunch of chrome. I have a very modest truck payment, and my wife and I don’t live above our means.”
These things allow Steve to be picky about the loads he’s accepting now. He realizes not everyone has the option, but feels like problems of that type might have been self-imposed by some of those lacking foresight during the 2018 trucking boom. The knee-jerk reaction to great rates encouraged a lot of people to run out and get brand-new trucks with $3,000 monthly payments. Allington doesn’t see a whole lot of these small business owner-operators surviving the storm.
“I really believe the industry will recover from this, and we’ll see better rates again,” he said, “and by then if your company has survived, you’re doing it right.”