thinking about it

another sucker is born..

that was is response to your comment about smart comments. Anyways. I'd look at something like fed ex. they run teams only, owner op only and mostly dedicated runs with drop and hooks. Only bad part is they are doubles usually. Good gig if you can get it though but you may not have enough experience. I'm not sure of there policy though as I had enough of team driving when I was training.
You can pay him whatever you want. You can pay him a low cpm and ay for every mile the truk runs or you can pay him a higher cpm and pay him just what he drives but that is harder to keep track of. If you wanted you could even pay him a percentage of the load. just depends what you want.

 

I recommend you get your own authority. Come up with a company name. Self Incorporate through you state. Call the IRS request a Fed Tax ID number, they will tell you the number on the phone then mail you the form. Go to the FMCSA website and apply for a DOT number which is free. Once you get that fill out a request for your MC number (authority) $300 fee may pay with credit card. (You will get MANY phone calls almost immediately from Insurance companies and consultants as well as mail solicitations who watch for new authority numbers!!!!) You will be issued an inactive MC number. Next, JOIN OOIDA and they will file your BOC3 (list of lawyers for each state that will represent you if you crash) form with the FMCSA for you FREE and you will not have to do anything, this pays for your OOIDA membership by itself! Next buy the truck and trailer. Choose one of the 100 Insurance companies that contacted you and pick one. You need minimum $750,000 auto liability (required by law) then cargo insurance. From $10,000 up. Most all brokers require $100,000 cargo but a few are as low as $25,000. With the BOC3 filed and Insurance contacts the FMCSA your MC number will go active! Once you are insured take your DOT and MC numbers plus proof of Insurance to the License plate agency that services CMV in your area. Buy your tag, most agencies also have the State fuel dept near by and you should be able to get your IFTA stickers at the same time. You pay an annual heavy use tax on the spot when you buy your tag or you may choose to delay payment for 60 days. You have the power to negotiate with brokers and choose your own loads. Don't take bad loads and shop for best Insurance deal before accepting. Don't take the consultant DOT audit help. Your local highway patrol or Motor Carrier Enforcement has free DVDs to help you keep your company legal. Your will receive and "educational only" DOT audit within the first 18 months of business.
To me, if you lease on you are giving someone else money you could keep yourself. You also expose yourself to fines and fees that just aren't necessary. OOIDA can set you up with a factoring company that is honest and you get paid within 2 or 3 days of delivering the load. I have my own authority and am home often and make more money than I ever have. Personally, I would pay your driver percentage. I wish you the best!

 

I think you need to get some more experience and learn the business end of trucking before taking this step. The most common problem with owning a truck is that drivers do not run their operation like a business, but as if that 2k revenue check they get is a paycheck.

Things you need to think about, particularly since you want to run team and therefore would be starting off already having not only your own finances to worry about, but also having an employee.

1. have you created a business plan outlining all financial aspects of your proposed operation? If you have to ask how to pay your driver, or how much, then I would assume not. Only you can answer the question, how much CAN you pay your driver.

2. this driver would be an employee, do not fall into the trap of thinking you can pay him as a contractor, unless you are joint owners of this truck and share equally in its cost of operation. trying to get out of responsibility for accounting for and paying payroll taxes has gotten many people in a world of trouble with the IRS and states. Also as an employer you are responsible for carrying workers compensation on him, and that is not cheap.

3. from what I have seen and heard over the years, running team with a friend may be the first step in ruining the friendship. are you prepared to spend every minute of every day with this person? also, how will your work progress when one of you wants time off or gets sick? If you are on a dedicated run at someplace like FedEX, that must be run as a team, what will happen then? How will you be affected if he just up and quits? Drivers do that every day in this industry with no warning. When (not if) the truck breaks and is in the shop for a week or two, what are you going to pay your employee, in accordance with the labor laws of your state? Or will you lay him off for a week or two while you get an engine overhaul? I've seen owners get sued by drivers for violating labor laws.

Most of us here can understand the desire to "own your own truck", you'll see several posts dedicated to that subject. The fact that you asked these questions is good. Also, if you are asking about whether to lease on to a carrier or to "find my own loads", you do not have a solid understanding of how things work. In order to find your own loads you would generally have to have your own authority, and that is a major step with major legal implications. You would need to fully understand the level of liability and responsibility you are exposing yourself to if you pursue that route. The record keeping requirements are strict and you WILL be audited by DOT. Other posts address authority requirements in great detail.

By asking "please give me all the info I need" it would appear you have not researched this very well. What company to lease on with, what type of freight to haul, etc, is not something anyone else can answer for you. By all means consider the recommendations of other drivers, then use what they say to further research companies that seem like they may fit your particular situation.

I would suggest that anyone looking to lease on truck print out a copy of CFR 49 part 376 - Federal Motor Carrier Leasing Regulations, and become intimately familiar with it. Compare the lease the company wants you to sign with this regulation to see how closely it complies with what is legal. This document provides the basis for much of the OOIDA lawsuits against several motor carriers. The printed information is only one or two pages and is not at all difficult to read or understand. Yet I have rarely seen a driver that is knowledgeable of this regulation, but every truck stop lawyer will tell you what is legal or not.

Having a truck is not just a bigger check, it often is less of a paycheck after all is said and done, compared to being a company driver. That said, if you do your homework and are well prepared mentally and financially for the things that can and will go wrong, then truck ownership can be a rewarding experience. I'd suggested carefully reading the sticky posts about "so you want to own your own company" and others like it and carefully consider if this is the path you wish to follow at this time.

Summary - do your own research, confirm anything you are told here for yourself, and approach this as a business not just as "i want to buy a truck". This is a business, and just because somebody can drive a truck does not make them a businessman, which is why so many O/O's go out of business.

Good luck whatever you decide. There are a lot of people here that have been through this before and can advise you, some have even survived!

 

I don't think I would advise his own authority after a whole 1 year in the industry. he doesn't know freight lanes, seasonal fluctuations etc. You get yourself stuck in southern FL thinking you are getting a great rate going in and you can easily loose money by the time you sit looking for a load and then end up deadheading to GA or AL anyways. that's just a small example

 

Couldn't agree with you more on all that MedicineMan. There is so much more to driving a truck these days than, well, just driving the truck! Multiply that ten-fold if you are going to get your own truck and be a lease-operator. And multiply it again if you are going to be an owner-operator (own authority).

Preparation is the key. Do it ahead of time, or it will be time for Preparation H to take care of the problems you will surely encounter.

 

Thats a good posting by Roshea, worded better than I can. I have dispatched drivers on percentage in the past is why I recommended that before, I don't have employees myself.

I will shoot straight from the hip as clear as I can.

I failed to mention I started up debt free and bought an older truck that I could pay cash for. Not one broker has ever asked me "how pretty is your truck?" I then put just under $600 into it for various engine gaskets to stop oil leaks. I now have a good solid truck that gets wonderful fuel mileage. If I ever have a major mechanical repair I couldn't pay cash for, I would prefer to go into small debt for a new engine than $100,000 for a new truck. You do have to use basic business practices. However a 1 truck operation is not rocket science if you are willing to learn. If you have "no money" to start up then I wouldn't recommend it yet. About $1,200 to pay down on insurance and 9 monthly payments there after, but cheaper if you have the annual premium up front, about $1,100 for a tag if in NC, about $500 annual heavy highway tax and first trip money. I'm sorry I didn't talk about that in my earlier post.

I still don't consider leasing a good deal, others consider it fine for them and thats great, "I guess". Before I started I had 99% of ALL people, family and friends telling me how big of a mistake it was, they said I wouldn't make money, the freights just not out there and comments like that. My wife was nervous but knew we weren't going into debt.

Today she is much happier with the decision to do it. I have control over my time, my pay and everything. One broker I pull for OFTEN has leased on O/O making .92 per mile. I absolutely couldn't imagine doing that. When they can't cover their freight they call me to help and I never get under 2.00 per mile on their loads pulling THEIR trailer and I get to back haul using it. A lot of the lease on drivers have truck payments also and I hear them talking and I could not imagine being in that situation. With some time and business contacts I have been able to get shorter loads going only to the states that border NC and back that pay well and I use less fuel. At first I was running NY to FL sometimes. Now I stay closer to NC.

As far as experience goes. You can run as a company driver 15 years and as a lease operator 15 years and still not get the basic understanding of what the business really is. I had a chance to work in a dispatch office for a short period of time and I was overwhelmed at what some of the loads were paying the company and how little the hard working driver sleeping on the road was getting. Its almost seemed criminal!

You pay taxes as a lease operator also by the way and you still have to buy your tires, probably more tires because you will "most likely" run more miles! So you get a $40 tire discount by leasing on with a company or a .10 per gallon fuel break. You loose $1.00 per mile on the trip or more sometimes! There are times $3.00 per mile or even higher loads come available. (I'm not claiming that is regularly)

Any business must be run like a business. This is one of the few industries where you have the power to control what you do and what you charge for service. I am blessed to live in a good area for freight which helps my business style. It isn't simple with no experience, but there are people out there to help you for free... Example:track your miles driven in each state and the gallons of fuel you purchased. Take the figures into the fuel tax office. They are more than willing to help you fill out the quarterly form. Thats what I did. Sounds intimidating until you do it a couple of times.

The DOT audit all the consultants are "warning" you about is a first time is an educational audit. Not a "We are going to shut you down if we can audit". I have been there, I know. They give you a 30 day notice as well.

Track your miles, your fuel, your expenses, file/pay your taxes as you should, be sensible, obey laws. Thats the rocket science of it.

 

Well said millergun. It would several pages at least to list all the things one really needs to consider when running trucks as a business. I'm sure we all have seen far too many of the folks who fall in to the trap of getting a big shiny truck with all the bells and whistles, and the accompanying truck payment. I see guys now all the time with 2200-2600 payments! That's insane, and these are first time buyers, first time owners.

I'm like you, an older truck well maintained can be fine. "Our type" is not out to impress anybody with chrome and lights. I'd rather be in control of my time and have a life, pursuing other interests, instead of working just to make payments to everyone else.

Agreed, leasing in most cases is not really a very good deal. From the business viewpoint the primary reason a company uses lease-operators is to run their operation as a non-asset based business. In other words, they don't need to put up the money, somebody else does. It is like getting a loan from the bank and not only it is interest free, you don't even have to pay it back. Heck, it even pays you interest! The lease operator takes all the risk, does all the grunt work, has no guaranteed revenue, not to mention even an expectation of profitability with many of these shady lease purchase deals. In the eyes of such companies we are not truck drivers, or owner operators, we are technically simply "asset providers." They have nothing invested in us, we are there to be used for the convenience of the company as they see fit. That is not meant in any derogatory way, either. They are leasing the truck from someone, just as you might lease a truck. They use at as they please, send it where they want, or let it sit. The lease arrangement is signed by both parties, typically one (the "owner-operator") decides this arrangement stinks, but refuses to accept the fact that the lease is NOT a guarantee that a certain amount of work (i.e. miles) will be provided, nor that the (previously agreed upon) compensation will provide any measure of profit.

However, there are usually exceptions to the rules. There are reasonable lease-purchase options out there, usually with smaller, family owned and run carriers. Not everybody is "out to get the truck driver", just most of them!

Also, there are good leases, for certain they will not be the companies doing all the advertising for drivers and truck owners. I have tended to stay around tank outfits for the last twenty years, but in the last couple years brokers have aggressively invaded the chemical industry offering one-stop shopping. A medium sized chemical company located half way between you and me has gone to brokering ALL their loads that are not pulled by the handful of company drivers. It's not even all about price as has been mention by people elsewhere. For them it is convenience, they deal with one point of contact and let somebody else deal with two dozen trucking companies arranging shipments and payment.

As you stated, even with brokers, rates are negotiable. I was regularly doing a load from this same company, brokered through the carrier I was leased to at the time, and it paid over 600 to the truck, not including fuel surcharge and accessorials (pumps, extra hose, etc.). The round trip was just over 200 miles, trailer was preloaded, and loaded miles were 82. What got me that rate - a reputation for customer service and the ability to work with the shipper (they know me there) and the receiver. Had another load going from Archdale to Fletcher NC, to the truck right at 1000 (not incl FSC). That's a day trip, and not even a full day.

And yes, I DO think ... ####, what would I be getting for this if I had my own authority. But, insurance for haz-mat & tanker is just too much, so I let someone else worry about it. Besides, really, those numbers aren't bad for "local" loads are they?

Or, I could be like 98% of the drivers leased where I am, or at most companies. First question ... "how many miles can I get" ... NOT how few miles can I get and how can I maximize what I get for them!

You stated you are in a good rate area. Carolina-Beaver-Teaser is right up the road 20 miles north, and speaks the same way about rates. Y'all show it can be done, but you have to make it happen. And that takes us full circle back to not so much needing trucking experience, but instead needing to know the business/legal requirements and understanding your market and freight lanes/rates.

Hopefully some will learn something from all this.

 

Thanks roshea. YESSIR! That is a good local rate. Your experience is obvious...............

I do a lot of turns in the Atlanta, GA and Virginia Beach, VA area mostly and pull dry vans. Driving as few miles as possible and maximizing as you said.

For anyone noticing my infraction above with 7 points. I tried answering someones question about load boards and broke the rules by stating the web address in two replies before I understood the rules completely. Guilty as charged! I know better now and only joined the forum yesterday, I should have read the rules more carefully.

I edited some the previous misspellings due to typing in a rush .

Take care, I'm out of here for a while.