To become independant or not?

I urge you to go READ the other threads about the experiences drivers have had with the lease/fleece programs......now if you are buying a truck and seeking financing from a lending institution/individual well that is a different game.......

 

Getting started today is a tough row to hoe. I have 10 years of experience but it was more than 3 years ago except the last few months so it's worthless to the insurance companies who seem to rule the world today. I bought a truck before I discovered this fact of life. Now looking for insurance or work. My point is to read, learn, study, ask questions and take your time before taking the plunge.

 

With this economy, and your level of experience, I would only consider putting a tractor on with a carrier. True, you will probably take in a little less per mile, but when you figure they are doing the legwork of finding freight, negotiating the rate, negotiating discounts on fuel, tires, parts, etc.... then you are not really loosing much income by being on with a carrier. You don't have the same level of "independence" that you would if you were doing your own thing with your own authority, but truth be told, there is no such thing as total freedom in this industry. Your are subject to the demands of the customers and the FMCSA no matter what. It's a service industry. Being an O/O is tough on most in this economy, and unless you are wanting to multiply your workload and risk, stick with a carrier until the economy levels off and starts coming back around. Then you can take a look at getting your own authority and giving it a go.

 

And Cowpie is right....there is plenty of "glory" in just being an O/O with or w/o your own trailer.......and trust me from experience.....having your own authority these days does not bring that much of a reward......leasing on to a carrier has its perks......look at them as working for you.......if they don't do you a good job after talking with them you can "fire" them and move on.......just don't be too hasty about the "firing and movin' on".......

 

After 10 years of experience and a 10 year layoff I recently renewed my CDL, ran out and bought a tractor and was ready to go to work. I planned to go to work for a buddy under his authority and work the load boards. WELL, things have changed a lot. I have found it virtually impossible to get insurance to run independent without 2 years of experience in the last 4 years. After much research there is only one insurance option available and it is limited to a 500 mile radius of your home base. And it is quoted to me at $12,900 per year plus physical damage for a total of $15,886. My only options left are to find a company who will accept me as a co driver and find a qualified 1st driver to run team or to buy the insurance and work close to home. Or sit on the truck for 3 months and go to work for one of a small handful of companies that will accept 3 months recent experience to lease on - certainly not top tier outfits. Or sell the truck. I use the Cost Per Mile sheets found in the trucker's tools section of the OOIDA website. The numbers say that I must earn at least $9,000 a month working intrastate to buy the insurance and pay the bills and live like a puaper. At least Florida is a big state. The reason I say intrastate is FL tags cost $375 and the state is deregulated so no authority is required. To go out of state authority is required. And expensive apportioned tags. This all varies state by state so be sure to check your state's requirements.

My point is that starting up is extremly difficult and expensive today. "They" have all of the angles covered. Everything you've been told is true. I had $25,000 in hand in cash and it is barely enough to get rolling with a small reserve after everything is paid. BARELY, IF all goes well and I get a few breaks. It's an expensive and difficult way to get into a business with a very limited upside and a unlimited downside.

 

No, not a good time to go indy. And what tells you that 3rd quarter 09 will be any better? The trucking ####!

Back to going indy. You need a truck, trailer, insurance, permits, plates, etc. You get your authority after you get your insurance. Figure at least $8000 a year for insurance, you will need 10% down to start, then wait at least a month for the authority to kick in. Plates, figure $1800 for the tractor. Then all of the time getting IFTA, KY, etc.

Now freight. How will you get freight? Will you use the load boards like GetLoaded or Internet Truckstop? Lets do a 100 mile radius search around Chicago for vans, flats and reefers.

Here goes.

This is a 100 mile radius around Chicago at 8:45am on 12/16/08.

Vans.................82 loads
Flats................135 loads (half of these are double and triple brokered, figure about 60 actual loads here)
Reefers.............48 loads



Now lets look at your neighborhood, Chattanooga TN.

This is a 100 mile radius around Chattanooga TN at 8:48am on 12/16/08.

Vans................21 loads
Flats..................8 loads
Reefers............11 loads

I am simply doing this to give you an idea of what is going on out here. These numbers make me sick, I have never seen it like this out here. And to top all of this off, rates have been slashed to around $1.20 avg (or lower) on these boards. Think about it, how are you going to make money out here at $1.20 a mile or less, once you figure in your dead head and overhead?

Then you will run into problems with allot of brokers and shippers with a new MC number. Allot of scammers and thieves out here right now stealing or holding loads hostage. And many of those guys are running new MC numbers. This has gotten to be a real problem out here in the past year. Many brokers will not give a new company the time of day.

And then we have the brokers! Brokers that also like to run scams by double brokering or just not paying. You will need to do credit checks, and do it religiously! You are now a bank extending credit. Something very few realize when they get into this racket.

And how will you get paid? Factor your bills? Or can you wait up to two or more months to get paid? Think about this when it is time to pay for your fuel. My average length to pay was 54 days, unless I moved something for one of the big boys that had quick pay or one of my direct shippers. And good luck finding a direct shipper to work with. Not saying it is impossible, but a one truck show does not garner much attention. And in this economy, ain't much moving. My directs used me for the overflow, no more overflow, and if there is, it ain't worth hauling.

Fuel? How will you buy fuel? You will need some sort of fuel card or lots of cash. I would advise against using a credit card, as paying up to .10 more per gallon will get expensive real quick. If you get a fuel card, you will more than likely need to pay your bill every week. That is about as long as any of the fuel card companies will extend credit to a new company out here. And allot of that will depend upon your personal credit. I hope you have good credit.

My story, we had five trucks, liquidated 2 years ago. One truck and trailer left, all paid for. We were specialized/expedite with a flat bed/conestoga. Things started getting bad this past summer. Leased truck and trailer on at Jones Motor, did great for around two weeks, and sat for another two months (no freight) while trying to figure out what to do. Said screw it and leased on at Schneider pulling one of their wagons. This time last week, Jones Motor had 115 loads in the entire country.

So, think long and hard about this decision. The days of jumping in a truck and making money are currently long gone. My gut tells me we will be in this shape for at least the next two to three years, if not longer. We shall have to wait and see if the new administration still plans on raising taxes on the producers. If they do, I think we are looking at at least six years to get back to where we were say this time last year. That is, if we are lucky.

Mike

 

Mike,

This is some very useful information for people who don't know like me. I really, really, really want to become an O/O. Even though I'm a driver of little under 1 year, freight is real scarce, and the economy is real bad. I truly believe that i will still make it. I'm finding that I want more independence and to be back in business for myself. Also I feel the statement about what little blue pony said about leasing on to a company "look at them as working for you.......if they don't do you a good job after talking with them you can "fire" them and move on...." Than you working for them, and you do a good job, but starve you out, cause you're a high paid truck company driver and they rather have more drivers that are paid lower.

 

Well, I would not recommend a lease purchase. You will be looking at at least $600 a week for a truck payment. Then subtract fuel, plates, etc... And don't expect a fuel surcharge to make up any of the difference. And figure you will probably make .90 a mile with no dead head pay. You will not last long out here with those rates and your overhead. $2 a mile in the above scenario would be tough. My stuff is all paid for, and I cannot make it on .90 a mile.

If it was me, and I had to be an o/op, I would find a good used truck. You should be able to get into a fairly new low mileage unit for around $24,000.00. You will be looking at a truck payment of around $500 a month. If you have the cash, pay cash.

Then, we have the little problem of time behind the wheel. Most companies that will lease a truck on require at least 3 years OTR experience. Some may go less, but in these times, I kinda doubt it.

Right now, I would hang in there and do what you are doing. You just don't have the time under your belt to do what you want to do in this industry presently.

I know allot of guys out here with their own trucks barely staying afloat. And some of these guys actually know what they are doing. The smartest one I know got out of it completely last year and started a local delivery company. He is the only one of us that is actually making money.

Mike