Prime's lease deal. The math gets done.

I'm not leasing, but the costs involved in a lease deal with most companies are similar. The lease costs are higher as it has been pointed out.

Fuel - Prime is very big on fuel efficiency - mostly because it's your largest controllable expense. It's up to the lease op, but getting the most out of it is something they really want you to work at. 6.25 - 7 mpg is what you should be shooting for in Prime's view. Considering our loads are similar whether you're doing company or lease, it's very easy to get in the neighborhood of 7mpg out of our trucks.

Since Prime does a 28/72 split on the revenue, they pay 28% of your tolls. There's no forced dispatch for lease ops - so you can order your comings and goings based on load availability.

I believe that the insurance payments are included in the lease payment, but I'll need to check on that. Other than that plates, IFTA, driver personal insurance, maintenance fund (up to the leasee), etc. seem to be fairly similar. Prime has some other escrow funds such as over-mileage (same as on your car lease), tire fund, etc. Ballance remaining at the end of the lease is refunded to the leasee.

Lease lengths are from a few months to 3 years on the reefer side - the short term leases are on trucks turned in early for whatever reason. From where I sit - and I'll admit I'm happy with Prime so far - it doesn't appear to be a bad deal. Judging from comments made by successful lease ops to me, I would think that I could about double my current take home as a company driver - on the average - in a good economy. That being said, until things pick up, it's not something anyone should be considering at the moment.

 

The problem I see with the Prime lease is that they offer loads to ya, am I correct? You don't see all the loads around you, just the ones they want you to see. Many companies do this type of dispatch and I just don't think it is beneficial to a l/o. I want to see all the loads in an area, cause maybe there is a better one leaving tomorrow or the day after that it will actually pay me more to wait on.

Yep the Century style trucks should be able to get that good of mileage. But they are basically throw away trucks. I don't want to offend anybody, but the simple fact is that the many of the Century and Columbia trucks are starting to fall apart after 4-5 years. Also at the end of the lease you don't really have anymore money or even a clear title. It puts you pretty much right back in the spot you started.

Yes the Prime deal will let you get your feet wet and if you fail you can walk away. But if there is any doubt a person has in his head about becoming an o/o or l/o they shouldn't even begin to try. You have to be willing to think positive all the time, work very hard, and think even smarter to be successful. There isn't any room left in this business for doubt.

 

At Prime the driver is part of the team including sales and fleet management - who are paid based on driver productivity. No driving, not much pay. So it behooves them to keep you very productive. I can think of an example last year when we were very short of loads in the nofreightnortheast. Managment made the decision to shift the entire fleet to the west to keep everybody running rather than let those stuck in New England sit. One guy in the cab couldn't have made that decision, so it has advantages. You have your system...

Well... that's why we do 3-year leases. OTOH, Petes and Kenworths tend to be a lot heavier than a Freightliner. Some of the dry weight numbers I've seen would preclude using them to haul some of the loads we get. Reefer loads tend to be on the plus side of 44k regularily. Saw a Pete 379 driver have to give up on an Atlanta Bud load because he couldn't scale out under 80k.

Not quite on the "not having anything"... end of lease payout should leave you with some bling in the bank - I've seen people with $8k to $24k checks. Get enough of it, and you're looking at the down payment on a new truck. This is just a step in a progression - best advice I ever had from an O/O is to start out as a company driver, and get some experience. Move on to a lease to figure out how trucking as a business works without the pressure of having to make it on your own. Then go O/O. Each step is a level of difficulty that is best taken one step at a time.

True.

 

You sound like you could add the numbers that would make the thread complete.

There is at least one fleet owner leasing his trucks on to Prime that is making it work.

The arguments about the company keeping things moving in their best interest are universal and a key pitch point, even for CRE. However, so are the gripes.

 

It is a bonus to keep the truck moving, but as a business man you need to see that just keeping the truck moving doesn't always prove to be the best thing. I have sat for an extra day many times to get more money per mile. I have been an o/o ( or l/o whatever you want to call it) for 7 years and I have realized that your dollar per mile has to big good and not just being productive and dropping loads. Yeah they may keep ya moving, but at the end of the week how many miles did ya turn and how much is still in your pocket per mile. I try my hardest to run the least miles with the highest profit, it doesn't always work, but many times paitents pays out.

Prime maybe good for some people, but they just aren't a fit for me.

 

With Prime, you can't broker your own loads either... or at least it is such a hassle to deal with the mountain of paperwork, by the time you get it done, you could have had one of their loads and been rolling. I was with Prime for 6 mos. When I started, all my bills at home were caught up...When I left, I was within 2 weeks of having my house repo'd, my lights turned off, my phone turned off.. I had 2 credit cards go beyond 3 months overdue... The bottom line, after expenses with Prime, I was able to pay myself 17.4 cpm.... Aaaaaaah the good life!! I did everything I could to make a living there except put a gun to my DM's head to force him to get me better loads. I know more people that have gone broke trying the 'Prime way'. The drivers you talk to right now that are doing good are 5% of the company. The other 95% have either gone broke and left, or are about to go broke....Prime is a joke... when you spell out Prime, Inc is says -Please Remember I Mortgaged Everything, I Need Cash -

Prime is nothing more than the old 'Dollar Down Trucking Company' Which Mo. forced out of business. I wish they'd do the same to Prime...The world would be a better/safer place without them.

 

Statistically speaking, 90% of all statistics are made up on the spot.

 

Yup the 80/20 rule lol.

Like I stated before, I never said it was the best deal out there, but the 2 drivers I drove with were BOTH making money, and I was also. But the drivers that I knew at Prime NOT making any money, spent most of their time figuring out how to get home every weekend (or something pretty close) and no, I did not speak with every driver there.

Truth is, new drivers have this dream that they can drive Monday - Friday and be home on the weekends and make $1,000,000 the first year... and they are going to drive a truck like in Smokey and the Bandit... with a pretty girl and a Trams Am blocking the police so they can haul illegal goods and make $100,000 for 1 run.

You cannot be a long haul driver and be at home watching TV sitting in the recliner on the weekend - get a local/regional driving job, save yourself the heartache.

The math HAS been done HERE for a Owner Operator. If you bother to read it, it states right up front and I quote "First, Make sure you have enough money, actual cash in the bank. NOT credit cards to cover ALL your expenses including the truck/trailer payments, repairs, maintenance, insurance, fuel and all the expenses at home for 3-6 months, including health insurance unless you wife/ husband has a job that you are covered under."

Biggest mistake most people make starting ANY business is to finance the hell out of it, and live off credit cards. I would plan on - in these economic times - your spouse NOT having a job in 3 - 6 months time... what are you going to do then? I'm forever single the way I see it right now - to much of a lone wolf - I can, and will, live in the truck = no real expenses. The mistake I made first time around, is to have an apartment that I saw 3 time in a year... useless.

 

Thanks David.

I figured there would be a dollar or two more spent than just the less than 100k to buy the truck. lol

The op was out to bash a company. Period. He didn't do the math here and probably didn't do the math prior to signing a lease either.

Top 2 reasons businesses fail: #1 under-capitalization #2 lack of adequate planning. (which is why #1 happened)

Remember the 7 P's folks

Proper
Prior
Planning
Prevents
Piss
Poor
Performance

 

Any money you use at first is borrowed. When you set up your business ledger and assets and liabilities you should reflect the startup costs as a LOAN to the business, even if you are the lender.

That said, it only matters where you got it if you FAIL. If it was your money, you're now broke. If it was credit cards, you're now in debt.

Don't set up or run your business to fail, is the short answer.