Leasing at Prime

It's up to you as an independent contractor. Do you have any experience in trucking?

 

That's an issue that dispatch and load planning will deal with... mostly.

 

Fuel, Experience and Money (YOURS!!)

So let's talk about fuel, experience, and your money. I always advise drivers that they should have a couple (meaning at least two) of years on the company side before they jump into the deep-end that is leasing. Something else that becomes readily apparent after you've signed on the line, got the shiny fancy big truck and hit the road is that your fuel bill is what determines whether you can feed yourself or not. How is this all connected???

Many posts back I wrote about how to buy fuel (see post number 62) and that doesn't mean sending in a macro 27. Fuel like anything else is a commodity, and it is a commodity with a volatile price. Just because the cheap fuel was in Ohio last week doesn't mean that next week it's in Michigan. Using the “Fuel Price by State” web page to get current prices along your entire route, subtracting off the IFTA tax to get the best base fuel price and then buying as much cheap fuel as you can stuff into your tanks is the way to go about it. Over the course of your lease, you will save hundreds of dollars that go into your pocket... and especially don't fall for the line about not buying fuel just before the end of the settlement period. That just makes the carrier and your settlement check look good... because you delayed a fuel purchase.

Experience in trucking gives you another advantage that I'll get into shortly. I've been told by a couple of STUDENTS that I have my head up some dark place when it comes to this. Presumably this is because as any STUDENT knows, any brain-dead caveman can drive a truck. I'm here to tell you that's not so. I ran across a fella with a brand-new truck last week, and right out of TnT training he gets into a trucking lease. This man was not happy, and I suppose it will all be Prime's fault pretty soon. When I talked to him about it, he told me his FM said he needed to get his fuel cost per-mile down. DANG RIGHT! It's the biggest controllable expense you have... effort here will yield more good to your settlement than anywhere else you can put it. He told me he was getting over 8 mpg most of the time. So where does that improvement come from?

First learning how to buy fuel. I showed him the web page I mentioned above (he didn't know it existed,) showed him where to get current IFTA tax rates, and talked to him about how to buy fuel. That'll help.

Then I talked to him about routing. Being right out of TnT the only roads he knew about all started with the letter “I.” HUH??? Here's where that experience comes in. If you've been on the company side awhile, good ol' mamma Prime will be telling you to use the “fuel route” to get to your next destination. That means a macro 27 “shortest route” plan that doesn't necessarily involve all interstate highways. This fella told me, he “was scared,” to get the big truck off of the big road and onto the US and state highway networks. This is a bad way to go about running your business. The interstate is not necessarily the shortest route between two points. It might be the fastest if you can run 65 or 75 mph everywhere, but that presents a problem to the guy in the big truck in that your fuel economy is going into the tank at those speeds. It also means you're going to be spending a lot of money on tolls that you could avoid by getting off of I80/90, I76 and I95 where they're tolled. Getting used to running on the US and state highway networks is a must, and spending time as a company driver is where you're going to find out what's good to run and what isn't. You're going to use less fuel on a shorter route, routes that don't go straight up the mountain, and you'll save a lot of money by not paying the toll booth to get on the turnpikes.

Get a copy of the Rand McNally Motor Carriers Atlas, and use it. Knowing where you're going will help immeasurably keeping you out of trouble. Just because the GPS told you it thinks the best route is this and that, doesn't mean you really want to be paying attention to it. The “fastest time settings” frequently tie you to the interstates, and the “shortest distance” settings may just take you over roads you really don't want to be on. Having the “big picture” provided by the RMCA sometimes will suggest routes that you can't “see” because of the “little picture” provided by a 5” or 7” screen on the GPS. You can use intermediate stops (you don't really have to stop there!) to force a GPS to route you the way you want to go. Company routing will also give you some experience on determining ways you don't want to be going as a lease operator... you get that from experience.

How else does experience help you? How about knowing more about your equipment (meaning the truck) so you don't spend so much time in the repair shop. It'll teach you how to take care of your tires as well, so you aren't spending so much there as well. While we're on tires, don't cheap out on them. Get the best low-rolling resistance tires you can even though they are more expensive. You'll save enough in fuel costs to buy a brand new set in a single year.

Then there's the complaint that the company is sending you on trips that can't be done. Maybe yes, and maybe if you know how to use the HOS rules to your advantage up front you can make those trips safely and legally. Knowing when to extend the time at a shipper into an 8-hour break that can be logged as a split-sleeper berth break is one of those things that come with experience. Much of how you maximize your gross revenue comes from knowing when to keep that left door shut, and use the HOS rules. Folks just out of TnT don't have that experience yet.

So this all get's tied back to YOUR MONEY like this. Knowing how to run your truck efficiently, what kind of tires to buy and optimizing your routing keeps your fuel burnt cost low. Knowing how to buy fuel cheaply keeps your fuel buying costs low. That routing thing helps you get to your next destination in a timely manner, which avoids time lost rescheduling appointments and loosing loads to repowers... all leads to more revenue. Knowing how to keep your shop time to a minimum helps keep your truck on the road, and keeps the hand of the law out of your pocket in equipment fines. You get this by having experience before your financial well-being depends on it.

Leasing a truck is running a business, and you have to operate your business wisely to make money in this racket. Those couple of years on the company side tune the easy part of trucking... running down the road to the point where it's second nature by the time your finances depend on it. It also gives you the time to explore how you're going to go about running your business, because going open loop and just letting things take care of itself ain't no way to run a business. When you've got time at the dock, you're sitting at the truck stop waiting for Ms Elogs to get happy with your hours, find out what a profit and loss sheet is. Figure out how you're going to know whether you're making money, and how much it costs you to run down the road. How else are you going to know whether that next load on the QualCom is one that's going to make you money, or you're going to subsidize the company for moving the cheapest freight they can find?

I sure hoped I helped that new lease-op some. He had been talking to his friends from orientation who had gone over to the company side, and were making twice what he was every week. Company side guys are employees who make wages running freight. Lease operators are independent contractors running a business, who must pay themselves out of what is left over after they pay ALL of the bills. That's why this is all so important. If you are going to make money at this... more than a company guy, you have to be on top of your game in all phases of running your business when you hit the ground on day one. Our PSD and TnT instructional and training program is meant to get you to the point that we can take the training wheels off of your bicycle and you can get down the street without skinning your knees more than a few times. That doesn't mean that a guy who can point the truck down the road without destroying everything in his path is even close to being ready to run his own business. I'd get tired of making $400 week too.

 

I'd disagree with the "making more" statement... I'm doing darned well.