So you want to "own " your own company

I am a new driver (solo 4 months) and am wanting to become an O/O. Your information has been invaluable to me in getting things in order to make move. I had been told that the only way for a newbie to go O/O was to buy a truck and lease on with a company. I continue to maybe be crazy enough to think I could make it on my own. Your info has given me a roadmap of at least better understanding the steps and the cost involved. One question regarding brokers and load boards. Can a startup make it going with load boards, or is it critical to have some individual contracts on your own? Thanks again for taking the time to be helpful.

 

So in general, if you buy a Class 8 tractor and intend to have it titled in your name for use on public roads and highways, you're required to file form 2290 with the IRS regardless of what you intend to do with it (local or long-haul). This means, by extension, that you have to have an Employee Identification Number because it's required for form 2290 right?

own or plan to purchase a tractor = need plates = need to file 2290 = need EIN (right?)

All of this needs to happen regardless of whether you plan to operate under you own authority or somebody else's correct?

I can tell already the registration process for a big truck is highly involved and expensive compared to a regular automobile. Quite a bit of red tape and bs to wade through.

 

I would not get in too big of a hurry when it comes to buying a truck and getting your authority. It will help you to drive someone else truck for at least a year or two. Having more experience will not only give you greater insight as to what this business is all about, but will also give you more opportunities for insurance. With little experience, you could probably find insurance through Progressive. As far as I know, they are the only ones who will insure inexperienced owners who get their authority. I have preferred rates and pay about half what you will likely pay starting out with no experience. But, my insurance company requires a minimum of 2-3 years experience, good mvr and good safety record.

Contrary to what some have posted on this and other trucking forums, you can make money using loadboards and brokers. I rarely use loadboards any more, but I have established contacts over the years and will first make calls to them before posting my truck. Personal contacts are always preferable to using people whom you are not acquainted. You should know your breakeven point or operating costs. You will need to have good negotiating skills. You should also know where the better freight lanes are and what you will need for a rate before going to any area. That is something that you won't really know until you run for a while. Most carriers use brokers for at least some of their freight. Some rely on them exclusively. More and more shippers are moving toward brokers and 3ppl's.

There are those with minimum experience who have started by getting their own authority and made it work. I would expect that only a very small percentage of them make it. If you plan on running your own authority you should have money set aside to run your operation for several months without any income. You should start making money within a short time, but it can take a few weeks for the money to come in. You should count on either factoring your receivables or be in a position to pay expenses until the money starts to come in. That could take 30-60 days from the time the broker receives the paperwork. Some have quick pay, but trucks breakdown. Repairs are expensive, especially on the road.

 

If you own and run a truck you will need to pay the 2290 tax to the IRS. I believe the IRS requires you to have a separate FEIN on the form even if you are a sold proprietorship. There is no fee. If you go to your local IRS office they may be able to assign you a number while you wait.

Whether you lease to a carrier or run your authority, you will need to pay your 2290 and have a paid receipt to prove that it has been paid. You will need a FEIN, 2290 receipt, proof of residency in the state in which you get your plates and a copy of your title. Some states will allow you to apply for the title when you get your base plates. If you lease to a carrier and want to have your own base plates in your state, you will need a copy of the lease agreement. If you run under your own authority you will need a copy of your authority, DOT number and certificate of insurance.

 

Although there are differing opinions on this it is my understanding that you can use your own SSN for this however many on this board including myself recommend against it. The reason being you will then be giving out your SSN to every brokerage that you work with increasing the chance of identity theft, etc....it may never happen but then again getting an FEIN is free.

As for making it solely off the boards it can be done however after getting started you will want to set aside a little time to start developing your own clients. Partially for the better rates and more importantly as I have found the amout of miscommunication between shipper, broker, receiver, and carrier is amazing. A broker's priority is rarely ever the same as yours - a person behind a desk in Iowa that doesnt have a CDL has no idea of your issues that you face on a daily basis being behind the wheel. I do not mean to stereotype here but most of you have probably faced this situation before.

In the past 10 months since getting started I have been able to pick up a few direct clients that are willing to work with me on appt times, the paperwork never mysteriously takes an hour, and the checks typically get to me quicker. Also on the rare occasion there is O/S/D the first question asked isnt - well was the seal still on the trailer. A broker conveniently likes to imply that I stopped on the side of I-95 and sold half a pallet of pizza boxes to some customer who just happens to need 400 medium pizza boxes.....

 

You can now get your Employer ID Number online at the IRS website.

Definitely get one, even if you are a sole proprietorship. It helps protect your personal identity, and some places prefer to have that over a social security number.

 

I've come to the conclusion you'd almost have to be certifiable to attempt owning and operating a big truck for revenue in Oregon as a local container hauler. The taxes here are brutal and seemingly unending.

 

That statement is true for many, if not most, o/o container operations anywhere in the US.

 

Hey everyone. Long story short, my wife's friend asked me to setup a company for him. He's a trucker for about 3 years. Got his own truck and trailer. He got laid off recently and wanted me to help him to dispatch. He doesn't speak English at all.
Being that I am NOT experienced in this AT ALL, I thought I'd come here and ask for advice;

Here are his demands.. so far;

He doesn't want to pay any fee for quick pay. Most he will pay is $50. That is what he was paying this whole time. He mentioned something like using a comcheck.

He wont take any loads that's over 32k lbs. He said it will damage the trailer and causes wear on the tires... How is the payload calculated? Is it by miles or by weight it is or both?

He won't take reefer at all.

He would prefer long distance hauling.

He won't submit his driver's license. He gave me his insurance and IRP card which is expiring soon on the 28th of this month

Before getting myself into a bigger problem, what should I do in terms of getting a company and dispatch for him? Are his demands too much? I have a friend that works as a dispatcher for part-time for his father. He told me that he pays 2-3% for quick pay, hauls 40k lbs on average without any problem. I'm not hurting financially at all, just trying to help a friend out, please give me some advice. Thank you in advance.

 

Sounds like he needs to rethink getting into this.

Getting set up with Comcheck will cost money too. That's not something that you just pick up at the truck stop. You have to set up an account with them.

If he's going to limit the weight that he will take, that's really gonna hurt him.

Not running reefer or flatbed isn't that big of an issue.

How he expects to be able to run a business at all without being able to speak English is beyond me.

He's going to have to cough his DL info too. That is info that will be required. The DL is your job in this industry.

He would be better off working from load boards or leasing on to a company.

This may be a bit blunt, but it's honest. He's limiting himself too much on this.