Going from your Own Authority to leasing to a Company

how do you get the small direct/shipper customer base contracts? thats great

 

Some companies have good fuel discounts. I have heard of $.50/gallon discount s.
Some companies pay for plate/permits.
They collect payment and send money to the bank.
The company will usually keep everything legal and current.
Some companies will sell you a new truck cheaper than a dealer with a low interest rate.
I have had 2 breakdowns over the years where I needed to drop a loaded trailer and put the truck in the shop. I just made a phone call and the company got another driver to take the load with no cost charged to me ( company trailer).
Never had my own authority. I have been leased to a company. Pretty simple and easy. I just drove and maintained my truck and kept a record of expenses for tax time.

 

Oh I am so taken aback. DUDE, your a Trucker, act like a Pro. Doctors don't stab people because they had a bad day. Grow up. Then talk to Us.

 

There are advantages and disadvantages in both scenarios. Yes, leasing on to a company can offer you lower insurance, paid plates, discounted fuel, and so forth. However, you can not negotiate what you get paid per mile or % base because they set what you will get paid. Companies have already set a contract with a customer, and they lower the linehaul so low to get that customer. As an O/O you have more power to negotiate, but as a lease driver there is no negotiating on what to get paid. There are more headaches for a driver that has to deal with a dispatcher that doesn't understand what a driver goes through or a dispatcher that messes up with a load that winds up costing you money. If you have got a customer base, I would keep it because you have a proven record with them. That speaks more for itself, and I wouldn't want to jeopardize that to lower my cost.

 

Sounds like you just need to take a week off and recharge. I start thinking like that after a week or two of hustling. Actually just getting rested pass that at the moment myself.

 

There is NO ADVANTAGES TOO LEASING ON!!! someone is just getting 25-30% of your money to do something you can do on your own.

 

You're wrong about this. Granted in the vast majority of leases the only real value is in available freight with solid rates and the side benefit of the company dealing with extra paperwork and compliance issues taking that off an operator's hands. Which of course the latter is really a minor thing that anyone can do for themselves and if that's the only thing a percentage off the top provides, then there is no real value and that's an expensive "secretary fee" for sure.

From my viewpoint there ought to be more than simply plenty of freight with solid rates. There ought to be more opportunity available. To different people that means different things. From where we're sitting we direct with Nissan, Volkswagon, Ford, GM, and I believe also Toyota now among others. We're partner carrier to a number of good carriers, large respected carriers, some of whom haven't taken on any new partner carriers in years. I'm seeing offers every few weeks, nothing that I've tapped into just yet though, of contract freight, deals, moves that I didn't even know existed. We've been a member of sylectus network for about a year and half now and that has more than paid for the percentage off the top of my gross. Sylectus and these other pieces are not all end all be all's, one still has to make hardnosed decisions about everything, but they are opportunities no solo or 5 or 10 truck fleet will ever tap into.

That is not to say a one truck show under it's own authority cannot make fantastic money from their own direct contacts and picking spot off loadboards. Strangely enough though, it seems not many who go this route ever think of the importance of partnering with other larger carriers, see very little mention or discussion of that in here. Those relationships, the good ones, are just asdifficult to come by same as direct and broker but still have the same lucrative potential.. ..my point being here, I know it is possible as a well managed one truck show to make great money out here under the operator's own authority.. ..but it is not necessarily the "end all be all" nor always the most lucrative either.

 

There are only a couple of reasons to lase on to another carrier. The biggest is that the carrier fronts all the costs, such as base plates and insurance. They may also offer fuel discounts to those leasing on to them. If you are a good negotiator, you should be able to get rates high enough on your own to offset any fuel discounts. Leasing on to a carrier also puts all compliance costs on them rather than you as an owner operator. The downside is that you may need to run their freight lanes rather than your own. That may work for you or it may not. You will give up some of the rate to the carrier, but they are paying all the other costs, including financing the receivables where you don't have that risk.

When you run under your authority you are responsible for everything. If you are getting good rates, I don't see much, if any, advantage to leasing on to another carrier. You stated that you have a few small direct shippers. Are you planning on turning those accounts over to a carrier to whom you will lease? If so, you will haul for about 25% less than when you haul direct. Under your own authority, you decide when and where you want to run. You call the shots. You negotiate the rates and assume all the risks of payment. I have leased to carriers and run under my own authority. For me, it is much better to run under my own authority. I make all the decisions and assume all the risk. In my case, I don't consider that I am taking much of a risk. I have been in business for many years. To me, it is much more risky to lease to another carrier than run under your own authority.

There are challenges to running under your own authority. Insurance costs are usually in flux. Fuel seems to be constantly changing. If you don't want to do your own IFTA and other compliance issues, there are services who will do that for you, for a fee. Of course, the more you contract out the less profit you will make. If you have been running your own authority for a time, I am curious as to why you would consider leasing on to another carrier?