Why are there no schools of business to teach drivers how to be an O/Op?

ITS also has free classes for members.

 

You can't teach someone how to be an O/O in a classroom!

 

Absolutely correct. However someone in the industry a few years may become interested in being an O/O and opening their own business. There are many things that are rrequired and recommended when making that step. There are classes taht can help someone through start up.

Whether the succeed or fail is ultimately how they operate that business and I would not fault anyone wanting to seek some education on it.

 

The reason there are no O/O schools like the CDL mills of America is THEY DON'T CARE IF YOU SUCCEED !!!!!!!!!!

The sad truth is they all make more money if we fail .
That why lease deals are so good for the company not the driver.
That's why they will leave you sit for days waiting on freight .
That's why if you threaten to quit they don't care.

So what if you don't make money they are so they don't care !!!

 

Bingo! O/Os and L/Os are a source of cheap labor and a market for trucks that others can't use or don't want.

Good for nuthin', think about it. The big companies can purchase, maintain, insure, fuel and operate a truck cheaper than the little guy. They have more contacts, business expertise and resources at their fingertips than the most experienced O/O can ever hope for. Even so, they measure profits in pennies per mile. If you doubt that, explore any of the large companies on Yahoo finance. While you're at it, explore Landstar because they use the "all O/O" business model and it's working for them.

The sad truth is that the O/O and lease operator shoulders all the expenses, headaches and risks, while the companies make a couple of phone calls and skim the profit off the top. Using O/Os greatly reduces company overhead and risk and is more profitable than running their own fleet. The O/Os and L/Os are a source of cheap labor who will net little or nothing more than a company driver with a decent company. The percentage of O/O & L/Os who do significantly better than the average is minuscule and most don't understand the difference between gross, settlement and net income.

Before someone says I'm full of it, I'll admit that some can do okay in a niche market and with plenty of good luck. One major repair, ill health or an accident spells doom for most O/Os because that truck is their only source of income.

Was I a dummy that went O/O? Yep, for 16 years and I realized that I was cheap labor from jump street. My sole reason for taking the plunge was that I love my family, take massive time off and don't like slip seating. I never financed a truck or ran more than 200 days per year and did alright -- but no better than what I could have earned with a good company truck. I also made far less than a union driver. I sold my last truck about 4 - 5 years ago and stopped driving OTR altogether.

But back to the original question, there are some business courses offered by community colleges that help a little. You have to understand a little about business, figuring costs per mile, taxes, money management and bookkeeping. There are books written on the subject and you can find them if you are diligent. Read everything trucking related, such a Landline, Commercial Carrier Journal, and Overdrive (?).

The problem with studying the trucking business is that the more you learn, the more you realize that the deck is stacked against you. With the current economic and rampant fuel price uncertainty, there is no way in hell I'd start up my own trucking business today.

The number of experienced trucking businesses that have failed in the last few years in the thousands. Think you're smarter than they are? A better course of action might be to hone your driving skills and keep your record clean, then get on with a union outfit if you can still find one.

Sorry for the usual long-winded post. I tend to run off at the keyboard...

 

These are a couple of the silliest, uneducated posts I have read in a while. It is clear that you do not understand this business at all. How does a company make more money on someone in a lease deal failing?
But then this is coming from someone who's guide to prosperity is "Get a Union Job".
If the truck sits without someone making the payment, the company is making the payment.
How much do you think they are making on the payment side? A L/P driver that has a fixed overhead of $800/week you think that is all profit? If they make 10% on that it would be high. They make the money on the miles.
And this idea that the L/P driver is "buying" the truck for the company. REALLY?!? How is that when the company is leasing the truck and at the end of the lease they have to return it?
Why these deals are so good for the company is that most of the risk is on the driver. If the driver does not drive then the cost of the overhead is in the driver. But if the driver is not driving then the company is not making money.
But if the driver fails then you have the company making the payments with no revenue to cover it.
Yes, I have looked at the filings of public trucking companies and UNDERSTAND what I am reading. Over the past couple of years the reasons that companies failed was because of two main factors.
First, you have business built on an average rate per mile at a certain number of miles per week. Both of these dropped with the number of mile by as much as half. That alone was going to shut down companies.
Second, companies that had less than 2% bad debt for years suddenly saw 10-15%.
Being an O/O is a business and needs to be run like a business. As an O/O, I am making more money on less miles than any local union driver, regional driver or company OTR driver could hope to make in two years. And this is after putting my money away for major repairs and replacing truck and trailer.

 

Bill it's coming from the same reason tote-your-note car dealerships make money selling the same car over and over. The carrier leases/finances the truck for $1,200/mo on their good credit and volume and puts a lease/operator behind the wheel for $3,200/mo. When the l/o lease is coming close to the end, they starve the operator into bankruptcy and put another driver in the seat. Any interim fixed costs are just another cost of doing business, unless they just rotate a company driver behind the wheel for a while.

I agree with most of the rest. However, there's a fine line between ignorant and incompetent. You can be ignorant and successful because you know your limitations and either hire a teacher or an accountant. If you're incompetent, you are your own worst enemy and there's no fix for it. Higher education actually magnifies the problem because it usually adds arrogance to the mix.

"Incompetence: When you earnestly believe you can compensate for a lack of skill by doubling your efforts, there's no end to what you can't do." That last quote is the caption on the "Incompetence" poster that despair dot com sells, and the best description of that topic I've ever seen.

 

Red, Hadn't heard from you in a while.

On the "profit" side I am not sure that it is at that level but they do make money. On the flip side, that person leasing that truck could not get even close to the rate they get from the trucking company.

As far as starving the driver out, what you are talking about is a conspiracy happening in all these companies. After all these years of these programs we would have more than a few wistle blower stories when that $30k/year dispatcher figures out they could do jail time for what you are describing. Far to many people inolved to make the starve people out option work.

Now don't get me wrong, I believe that these companies have it worked out as to what very high level of failure is acceptable and they will still make more money compared to a company driver fleet. That is why they have no issue letting someone that has no business experience, no savings, 4-weeks driving experience and can barely fill out a log book lease a truck. Hell, after reading what I wrote they don't need a conspiracy, you couldn't write a better script for failure.

And from a pure business stand point, the return on capital is astinomical compared to the company fleet. Investors like these numbers.

 

Some of the negative comments about doing an O/O thing may be somewhat true regarding Lease Purchase arraingments. I have no experience with that route. But most of the negative comments really don't hold water in many O/O and carrier relationships.

Sure, some companies will take advantage of O/O as "cheap labor" as it was put, but that is only because the O/O didn't research the company he/she was hooking up with like any major business would research another business they were going to work with. Just going by the simple truck magazine ads and a couple of phone calls to a recruiter just doesn't make for a sound business decision.

A solid company is one that wants a lasting relationship with its O/O, because continuity in service is critical for them to get and retain good customers. Sure, the carrier is out to make a profit, but then, so is the O/O. Good O/O will provide a solid, reliable service and a good carrier will do what is necessary to see that those good O/O will make it as well. It is a business relationship, pure and simple. The O/O that can't "pack the gear" will be let go or "starved out" and the good ones retained. Likewise, if a carrier is not fulfilling their end of the bargain, the O/O needs to find another business partner.

Oh, and I am not in a "niche" area of the industry. I just pull a dry box and stay in the Upper Midwest. By the house a couple of times a week, off on the weekends and holidays, and take two weeks a year off.

When it is done right, by both parties, then it works well. I have such a business relationship with the carrier I pull for. And even in this trying economic times, I have done quite well. Better than I have ever done as a company driver in the best of times, and well enough that my biggest problem is trying to keep from having to pay too much in taxes to Uncle Sugar. Fuel is a virtually a non issue compared to that.

Not sure that any classroom can really teach how to run your own business successfully. Too many variables in that one. I was fortunate that I have had a wealth of life's experiences to rely on. Got good business management training early on with the family farm, some college thrown in, and some classroom experience in the school of hard knocks. I run several spreadsheets to track costs per mile, per day, per week, per quarter, per year as well as tracking revenues to see what is profitable and what is not. I am always researching components, tires, etc to see what will give me the best value. Thank God for laptops, smartphones, and the internet.

 

Cowpie, good post.

As with most things in this life, things are getting more and more compicated. Technology has to be the biggest advantage for O/O's. With computers, wifi, internet cards and internet load boards you would think that the TS load board would have gone the way of the buggy whip. But still see guys making calls from those boards.