Own Authority vs Lease on company

I like being leased. The difference in what percentage I'm giving up and what I would actually keep after expenses as an independent is peanuts. I get 87% + surcharge pulling my trailer or running power only. I get 77% + surcharge pulling their's. Currently I pull my own dry van trailer and take on some power only work as it becomes available. I also pull one of their nearly brand new $70,000 reefer trailers on that freight. They pay for the cargo/liability, reefer fuel, wash outs, etc.

I wouldn't own a reefer of my own unless it was a brand new unit. Too much risk to be loading up an old junker waterlogged unit. If I can't trust it to run a load of ice cream I ain't hooking to it. I can't extend myself currently to get one on my own. Or I should say I will not extend myself on that. I could but I won't currently. If my property was paid for and other goals reached I'd be independent.

Other priorities are more important and come first. The 22%+/- that I would get being independent with my own reefer or 12%+/- with the van/PO aren't worth the few thousand in gains. That money won't offset the pressure and risk and isn't worth it to me. I've looked at it time and time again. I can do anything any independent out here does in the exact same manner and really answer to no-one as long as I'm in compliance. I have a little less headache is all.

What are your needs and priorities? Everyone is different and there is no one size fits all answer to this question. For your typical one truck operator independence versus leased are both a means to an end neither one is an end all be all.

 

One thing to keep in mind, if you do get your numbers and it doesn't work, you can always lease back to a carrier, and try again. I bought my first truck in 2005, and eventually failed. I learned from the mistakes and have successfully navigated the waters.
Learn all you can, you can do it.

 

If you don't mind me asking, who are you leased on with?

 

If you can lease on to a company that takes 10 to 12%, and get fuel discounts, national accounts on tires, then leasing is way better than own authority. I gave up my authority because i was paying too much for insurance premiums, no fuel discounts, no tire discounts, and had to pay factor fees. The 10% i give up to carrier to get these benefits is worth it. Now if your carrier charges you 25%, then getting your authority would be better. Look around the truck pamphlets at the truckstop and Craigslists and you will see many companies charging 10 to 15%.

 

I pay 15% and have complete autonomy in how I conduct business. I haven't been this relaxed in years!

 

Don't give up more than 15% for a lease on.
Learn who you are, just starting out, you might not know. Organization skills, more importantly discipline, are everything.
If you need some structure leasing can be okay. It's a great way to learn the rest as you continue to make $.

Skip the hide and seek, no transparency, outfits.

 

Being leased on to a carrier with ability to pick your own freight is the best set up for a single owner operator, especially when one does not want to grow into a fleet. Putting aside the cost aspect, there is always a cargo claim risk and payment collection risk, unmitigated, you have to deal with it yourself. If leased on to a good carrier, they would provide assistance with break downs and logistics. For many, myself included, authority was the only way to be able to pick your own freight and it may be compared to buying a bus instead of SUV for a family of four, because there were no SUVs but only buses available for sale.

It takes 3-6 grand to get started plus 15 - 20k in savings to have enough cushion due to no assistance!

 

Well, that might be true for some solo operators, but not for me.

There's nothing a larger carrier can provide for me (running under their authority) that I can't do for myself.

 

Truck driver told me a story. He got pulled by the DOT, he drives for Mercer.
After the inspection the officer was baffled by something. The officer asked the truck driver "how come your company has 30 thousand trucks but doesn't own not 1 of them?"
If you have ever been to Louisville you'll see the tallest building is Mercer

 

The paperwork burden myth for being independent is very overrated. Everything is very repetitive, almost copy and paste like. Besides, this way you learn o lot of this administrative and regulatory staff for whatever it's worth. The office side of it is the least of my concerns. I worry more about payment collection and guarding myself against potential "lame" cargo claims. Payment collection is reduced to a large extent if you deal with larger brokerages, but there is a little chance to be more intimate with them as with smaller brokers. The sole reliance on load boards in the long run may not serve the purpose of being independent. My idea of this whole thing is to get to know a few brokers, perhaps even direct shippers and be in contact with them for repetitive freight on more or less regional lanes. Load boards would be only a supplement in that model. Long way to go.