leasing on verses your own authority

What type of trailer you pulling?

Your own authority IS the way to go IF:
1- you can handle all the legal requirements and stay on top of your record keeping, IFTA, all of that
2- you know where you will get your work from. A load board sounds like a great idea, but unless you have some regular customers that will feed you decent loads then a load board only will be a tough slug. I pull almost everything off a load board and in the beginning it was VERY rough getting decent paying stuff. Now I get regular calls from customers and I can setup the next good paying load before I get there and they hold the load for me. I was lucky because before I got into all of it I knew several brokers in my area and I called them and asked if they would load a guy with new authority. They all said yes.
3- you have enough cash to cover your fuel until you get paid. This is huge. You will have invoices that will be slow to pay, sometimes 60 days, even 90, sometimes you wonder if you will ever be paid. I again was lucky because in the beginning I hauled for one broker who kept me busy for 2 months straight, and paid me as soon as he got my invoice he mailed the cheque. When I am sitting in a produce hot-zone, and his rates are in line with everyone else, I haul it for him. What goes around comes around.
4- try not to use factors if you can. 5% to get paid NOW is actually 60% interest per year. I would love to get my hands on that business if I had a ton of cash.

If you do a lease-on (meaning you have outside financing for your truck, I am taking it as that) then you will have the opportunity to learn what freight is moving where and for what rates. You may make the same or more being leased to them. It will depend on your negotiating and money management skills. You will have to place a dollar value on their services for finding freight and taking care of your IFTA and all that. You will most likely also have discounted insurance through them, perhaps cheaper fuel and tires and all that. These are all factors in your decision making.


Hope that is clear as mud. Hah

 

Dave,

I dont know about leasing on, but I have heard good things (a lot) with companies like Mercer and landstar (less so with landstar). Having your own authority is the way to go, but if your profile is right, you are in the worst possible state to be in, especially if you want home time. The west is harder in general, but the northwest is brutal. I am based in Northeast Montana, and pretty much every load I have found on a board within 200 miles of me is backhaul BS. Mostly hay, and I am lucky because I have my stepdeck. If I had a van, I would be SOL. If you haul with a flat or step, you have to go east or south to make money. There is work and they pay, but not if you have a van or reefer. They have the work, but they dont pay. If you have a cattle trailer though, you are in the right place and can get paid well. Also, with the cattle trailer, you can go directly to the ranchers and the feedlots (who will happily refer you to the ranchers) all over the state and get direct business. Montana also is very funny about their IRP. They say that a reasonable amount of minimum miles for someone to get IRP plates is 25K per year. They really want their fuel taxes and their part of those apportioned plates. There really arent that many miles to be had in Montana unless you are back home a lot and taking the backhauls every time you go.

 

He needs to have more cash reserves to pay just fuel for a few weeks. He needs cash reserves to cover 2 months of bank notes, fuel, 3 months of comp and liability insurance, perhaps a blown engine or cylinder head. Things happen. Medical emergencies with you or a close family member. Every day that truck sits, you're getting one day closer to bankruptcy.

You have to be a great salesman in order to tell a shipper why they should pay you $2.50 mile when they pay some other large carrier $2.00 mile. Many companies you think will pay promptly, are the slowest to pay. Independent o/o is one of the fastest ways to bankrupty if you 1. Don't know all the ropes of running a trucking company from the inside. And 2. Don't have sufficient cash reserves or strong line of credit.

 

I have had my own authority for a number of years. I have also leased to another carrier. I made money both ways, but do better running my own numbers. I don't recall your mentioning what type of freight you want to haul. The northwest does tend to be soft with freight and rates, but some do fairly well doing a turn.

If you lease to a carrier, most have their own freight, at least one way. Most all carriers use loadboards and broker some of their freight. I have done well running up and down I-5. Running east tends to not do as well. Running your own authority you will need your own trailer. Most carriers either have you pull their trailers or will rent one to you. When you run your own authority you will be responsible for all of your expenses and not have a bank to help along with the start up costs, such as base plates, permits, fuel, etc., Many carriers will advance the money for those expenses and take out a flat rate each week until paid in full. Most also offer fuel advances to help with the expenses of running the truck until your settlement. Carriers are responsible for filing and paying IFTA and other costs, but will usually deduct those expenses from the owner operator's settlement.

If you run your own authority, you can factor your loads or only deal with those brokers who have a quick pay program. But, you will be responsible for paying your own liability and cargo insurance. Your biggest challenge in the area where you live is finding decent paying freight out of the area. You can sit for days waiting on a load or have to deadhead out. Running without freight on the truck can be expensive.

 

Man this guy nailed it! Absolutely right as rain! Well said gokiddogo!

 

I am a O/O with own Authority for almost a year and I would be willing to help you and try to answer your questions the best I can. I have had my own Authority since January 2012. I have found out the do's and dont's so far, one of the most importation things is Cash flow, I currently use a factor, and I have a a awesome software that I run on my Ipad that allows me to track my IFTA miles via GPS, my logs and inspections, record all fuel purchases as well as give me the ability to give my clients tracking numbers to track there load. It cost me 25.00 a month plus a data plan for the Ipad and buying an Ipad. I bough an MFP printer for the truck and I can scal proof of delivery and email it to my factor and have them paying me before I leave the receiver.

Feel free to email me: skroon@kbtransportllc.com ill be happy to share my info. Also I recommend getting a membership from OOIDA for all there help with issues and I can recommended a book that help me with business plan.