Thinking of going O/O

NEVER lease or finance a truck through the company you work for.

If you want to buy a truck, go to the bank, get a loan, and buy a truck. If you want to be an O/O, make sure YOU have the title in YOUR name, with the bank or finance company as the lien holder...and you make the payments directly to them...NOT to the company you are leased to.

If anything, you will be taking home LESS in the end as an O/O leased to a carrier...especially for the first few years as you will have that truck note on top of whatever maintenance and repair issues you may have. Yeah, the pay per mile goes up...but so do your expenses. I can't run for $0.92/mile...won't even start my truck up in the morning if that's all I'm going to make for the day. It doesn't cover my costs with enough left over to pay myself...and I don't like working for free.

...and even if you are making more, you had better be saving it up. It's only a matter of time before the good times end and you have to sink some money back into the truck to keep it roadworthy. Remember...fuel, tires, batteries, hoses, turbo, oil changes, grease, u-joints, clutches, transmission problems, engine problems....it all comes out of your pocket once you buy or lease that truck. As a company driver, you don't worry about any of that stuff.

And you think you can JUST do it for a year?

Then what?

 

You are making the mistake of comparing your $0.28/mile free-and-clear to the L/O $0.92/mile BEFORE expenses.

Run your company truck for a year. Keep track of EVERYTHING!

Fuel. Not just gallons. Dollars. $3.00/gallon and 6 mpg, you are spending $0.50/mile just on fuel.

You have $0.42/mile left.

Truck note. If you are paying $400/week towards the lease, and running 3000 miles per week, that comes to another $0.13/mile. Only getting 2500 miles/week? Bump your cost of operation up to $0.16/mile just to make your truck payment.

You now have between $0.26/mile and $0.29/mile left over, and all you have paid for is fuel and your truck note.

You STILL have tires, brakes, PM services, engine wear & tear, transmission wear & tear, drive shaft & u-joint wear & tear, rear axle wear & tear, suspension wear & tear, steer axle wear & tear...

EVERY part and piece on that truck will eventually wear out, and when it does, you have to be able to replace or repair it. Some items wear out every year or two. Others are generally good for the "life" of the truck. Either way, they have to be taken into consideration.

Whenever the shop does any work to the truck, find out WHAT was done, and then do some research and find out what that would have cost you if YOU were the one footing the bill.

After you have run that truck for a year, and you have your ACTUAL numbers for what it would have cost you to run that truck for that year, compare the expenses to what you would have made at the L/O rate. Then, talk to the company. Find out how much the ADDITIONAL expenses would be....plates & permits, insurance, etc.

...and don't forget about TAXES, either. Right now, only 1/2 of your employment taxes are withheld from your pay, and the other 1/2 is paid by your employer. When you lease or buy a truck, you pay 100% of the employment taxes because you essentially work for yourself. Not to mention "benefits"...no paid vacations. You don't work, you don't get paid...but the truck note still needs to get paid. No health insurance or 401K. You have to provide your own. How much extra is THAT going to cost?

Yeah, fuel surcharge will help increase the $/mile paid to the truck...but it isn't something to count on, since it fluctuates with the fuel price. When running your numbers, think of it as an extra cushion to CYA on the unexpected expenses that you hadn't factored into your numbers.

 

Great Post!

 

Try and look at it like this analogy. It is like dating someone for 3 or 6 months, and then getting maried. It is usually a crapshoot, and one is lucky to last a year in the marriage. And yes, like trucking, there is alot in the relationship or marriage game that is not revealed to you until you are knee deep.
In other words, don't even begin to think about that lease. Just chalk it up to your DM blowing smoke up your ***.

 

because more fail than succeed.

 

Now that you've got a year of experience with Swift, take that experience and look for a better company.

Its not that everyone is trying to talk guys out of being O/O's, they are giving them the whole picture, negative stuff included, numbers included, and it comes across as they are trying to talk them out of it. They just want prospective O/O's to know exactly what they are getting into.

 

They don't run on water. You have to buy fuel. Here is what you posted: "My mentor is a O/O and he was barely bringing in more than i was" . This guy is getting paid for hauling freight, plus getting paid to tear up his truck training, yet still making a little more than you.

He also has the potential of owing Swift money each week. A new set of tires, a busted fender, a freight claim that was his fault, anything, and that fund is gone, and they start taking it out of your pay. Take a week off, and you still owe all expenses for that week, so you spend the next month trying to get caught back up, just in time to get in the hole again taking more time off. Also, if that truck is in the shop for a week, you still owe truck and associated payments. Get a lemon and you are sunk from the start. You are paying for their truck, keeping it up, and not making as much in the long run as you are now.

You have a family. Many a divorce has come about because of truck leasing and ownership. You have all the problems on your shoulders now. When you go home you can't relax because you will be thinking about the truck and how much you are loseing while home.

Take it as you want. You will be sorry doing this at your experience level.