So you want to "own " your own company

rickybobby · Apr 15, 2011

G/MAN said: ↑

I would not say that it is always best to start with your own authority. If you have never been in business, have limited working capital, marginal or limited credit and no contacts, then you are probably better off to lease to another carrier. While you are leased you should learn all you can about this business as you save your money. One advantage to leasing to another carrier is that you have a safety net. When you run your authority then there is no safety net. You are on your own.

I have known some who start out running their own authority. Most spend a lot of money on their own nickel learning this business. It takes time to learn the best freight lanes and make good contacts. Finding brokers or shippers who have good paying freight and pay their bills in a timely manner takes time. I have known a few who did start with their own authority and did all right. I started with my own authority, but did have driving and business experience. I also paid cash for my truck and trailer. It makes a huge difference when you start out with NO equipment payments. I also had my own customers and they paid me on delivery.

You can start out with limited capital and equipment payments. But all it will take is one major breakdown or expense and you are out of business. I am not trying to discourage you from getting your authority. I think it is the best way to go for many of us. On the other hand, I know owner operators who lease to other carriers and do as well as many with their own authority. One thing to keep in mind as you ponder which way you want to go is that not everyone who has their authority is successful. Not everyone who leases to a carrier is successful, either.

Some people will make more leasing to a carrier than they will running under their own authority. Some people would do better if they stayed a company driver rather than going out and buying a truck. Before doing anything you need to sit down and think about what you want to do. There is nothing wrong with staying a company driver. Some carriers pay well and have good benefits. There is something to be said for going home and not having to worry about doing maintenance or repairing the truck. Remember, when it is your truck, there is always something that needs to be done. I think that most drivers and soon to be drivers fantasize about owning their own truck. If some were honest, they probably made more as a company driver than owning their own truck. Some people are just not good managers. Some don't know how to budget and manage their money. Those are the ones who usually get suckered in with some lease purchase deal. Very few of them ever actually do well enough to own the truck. I have noticed that it is very difficult for some drivers to change their way of thinking from being an employee or driver to a business owner. Some never seem to make the transition.

It isn't uncommon for a driver with a couple of years experience to be earning $40-45,000+ per year.

There is nothing wrong with working with brokers. The way things have been heading, many shippers have turned over their logistics to third party logistics companies or brokers. Granted, some brokers can be sleezeballs, but there are others who are honest and can do a good job for you. There are a few brokers whom I will not do business because I don't care for the way in which they do business. A broker is a salesman. He finds and books loads and then finds trucks to haul the freight. That takes time and he deserves a fair commission. Notice that I said FAIR. If you want to spend the time calling shippers and developing your own base then it does take time that you could spend driving. You could hire a salesman to call on shippers for you, but you will need to pay him a commission or salary. Without several trucks it may not be worth it for him or you.

Some owner operators do a lot of complaining about brokers. You can hear them complaining about how cheap the rates are from brokers. Not all brokers have cheap rates. I have gotten some good rates from brokers. I have had to be home for the last several weeks so I have not been running. I usually don't discuss rates that I am getting or offered. But, I have been offered a number of loads paying $3/+mile the past 3 weeks that I have been home. I was offered two loads this week that paid $5/mile. All came from brokers. Those that paid $5/mile were not advertised or posted on any loadboard. They called me because of my past relationship with them. I really hated to turn down those two at $5/mile. There are plenty of loads that some are trying to move for $1.50 or less. I won't haul them, but they are around. You will likely not start out with top rates. I have worked hard to build a good reputation and have a good safety record with many years experience. It takes time to build a good reputation. It only takes one or two major errors to ruin it.

To be successful in this business you must be a good negotiator. Every load is a negotiation. When freight is tight and capacity is high then rates will be down and you may need to fight to get a decent rate. It is all part of the business. You mentioned getting $1.25-1.35/mile. You cannot afford to run a truck at those rates. Not with fuel running at or near $0.80/mile. By the time you add payments, maintenance, insurance and all the other costs associated in running a truck you simply cannot come out at those rates. And it is not necessary to run at those rates. One thing many forget about is deadhead miles. A 10% deadhead is very low. That also comes off the top.
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Another good post from the G Man!

milskired · Apr 15, 2011

Indeed it was

botanis · Apr 22, 2011

G/MAN said: ↑

To give you an idea of what most short flatbed freight will pay you, most of the rates that I have seen will pay $150-400 or perhaps $500 for the miles you mentioned. It would be fine if you could reload and come right back. It sound simple. The problem is the time spent waiting to load and unload. Then there is a matter of tarping. Most flatbed loads will need to be tarped. So, you will need to spend time rolling out tarps, tarp the load and on the other end you will need to untarp and pack everything up. It is difficult to get more than one of the short runs and reload in the same day. That is the big problem with hauling short loads on a flat bed. With a van you open the doors, back into a dock, load, pull out, shut the doors and repeat on the other end. It can take 2-4 hours or longer to tarp a load, depending on the type of freight.
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Thanks G/Man for the input. I am looking into something similar. My Husband and I are about to get our own authority and run short haul, dry van or flatbed from Fort Worth. We would like for him to be home every other day or every couple of days as we have little ones he doesn't want to miss out on. We have other income that pays the bills so we are not expecting to get rich from it but would like to be able to put a decent profit away into savings for the little ones.

I think we will do fine, just a little nervous as we are new to this.

G/MAN · Apr 22, 2011

You all are welcome.

Botanis, before getting your authority you may want to decide what type of freight you want to pull. At one time a truckers could make a good lving hauling between what I call "The triangle." Going from the Metroplex to Houston or San Antonio and back. I don't know if you could do that these days. If you want your husband to be back every day or so that might work for you. If you want to pull flats you could check with the oil fields. Johns Manville has a plant south of you in Cleburne. The last time I checked with them the rates were pretty low, but things change. At one time they had a fair amount of short runs around Texas. I really don't know how the van freight is in your area, but pulling a van might be easier to get home every couple of nights. If it is important for your husband to be home I would check to see what is available before spending the money for your authority and insurance.

robin malik · May 1, 2011

preety good info

justdan60 · May 1, 2011

amen to that steve &lo, amen

JB transport · May 4, 2011

A carrier is using brokers to get loads. If they want to use owner operator to haul their trailer using their own authority without having a lease agreement. Is this double brokering?? is this legal? Which insurance will be liable if a claim? What will be the right and best way to avoid problems with brokers if that is the case? ...

Gears · May 5, 2011

The O/O is a contractor using their own Authority. The contractor more than likely will be required to carry GL insurance and trailer interchange insurance along with his/her regular coverage. Double brokering? Sounds like, unless the broker is the agent of the company.

Ukumfe · May 5, 2011

JB transport said: ↑

A carrier is using brokers to get loads. If they want to use owner operator to haul their trailer using their own authority without having a lease agreement. Is this double brokering?? is this legal? Which insurance will be liable if a claim? What will be the right and best way to avoid problems with brokers if that is the case? ...
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Depending on whether or not I understand the question properly, this almost sounds like freight forwarding.

Example : You haul for Willies Widgets or the broker for them. You take your usual load,but they have 2 more they ask if you can cover for them. You agree and then call your buddy Gears and Ukumfe and ask them to haul them and you will pay them. When I spoke with an insurance agent on a quote they asked me about freight forwarding and explained it to me with a similar example.

I would say speak with your insurance agent for the facts because it will be your name on the agreement between you and the broker and any problems he will come after you and then you would have to come after whomever you used.

Nolelover61 · May 5, 2011

Hello all,

I am a new member that has been out of trucking for a while and looking to get back into it. I been out for a while but been keeping up with what is going on and trying to see what will be a good company to become an owner operator and break into my own authority and started up my own fleet. I need all type of information and would preferred to hire somone to get my authority started but maybe you guys can helped me out with good advices and some dos and don'ts. I am free to contact if you like to talk and chat. Oh, before I forget I started out with Prime Inc. and Burlington Motor Carrier which is out of business as of now. I really enjoyed my time at Prime INC, but my trainer had an accident and tried to blame it on me and I left there without leasing a truck. BMC wasn't a bad trucking company but for some they didn't want to give their new drivers no money to live on back in 2001. That one reason I left the industry all together back then. Well I am back and looking to start off fresh with a company owning my own truck. I need all type of information from what type of truck will give me the best profit margin, what specs will I need from horsepower, torque and gear ratios that will give me good fuel milages at the same time having the power to go up and down hills and mountains without lugging and taking all day.

Thanks

Crazysexlover.

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