Defining terms: "I'm leased on to a company"

We kinda need to define several terms before we get to the details you are looking for......

Lets start with a pure form..... Independent Owner Operator: This person will own their truck (and most likely the trailer also). They are registered with the D.O.T. and have their own d.o.t number assigned to them. They have a direct to carry freight for a business that needs some stuff moved to a customer's location. They will also be in contact with a few brokers who will contract them for loads. The broker is supposed to be the one talking to a direct customer. The shipper contacts the broker and tells the broker to find a truck for the load and is the middleman negotiating the dollars to move the freight. the broker is paid a commission. The independent is responsible for all their insurances, licensing, taxes, tolls,....... everything legally required to run the truck. Also all the maintenance and repairs of their equipment.

 

A truck owner can choose to lease on his equipment to a carrier. (A carrier is the business entity that has and controls a dot number). An Independent owner operator is a carrier with only one truck. The lease is a contract between the carrier and the truck owner. A very basic lease would be the owner operator using the carrier's dot number. The carrier would administrate the dot number and deal with all the audits and government stuff associated with it. The carrier would get paid for the truck doing the work. then the carrier would retain a portion of the revenue and pay the balance to the truck owner. Per the contract. this scenario the driver would be responsible for getting (booking) all their own loads, negotiating rates and all that like the Independent Owner Op.

 

As with all contracts there are many ways to draw them up.

The carrier can provide additional services in the lease (for a higher percentage of course). They can take on any and all of the responsibilities that the Independent Owner Operator has. They could say pay for the registration, or pay it and then charge it back to the owner with deductions from the settlement. Some pay for some of the insurances, some pay for it and charge it back. It all depends on the contract.

The carrier could provide a list of available loads that the driver picks from rather than the driver dealing with brokers. The carrier could just dispatch the driver on the next load with no input from the owner or driver.

The owner could get paid a percentage of the load, or they could be paid at a fixed rate per mile (with some accessory pay).

Larger carriers are in a position to negotiate for fuel discounts and other things that they can pass onto the truck owner.

 

a Miles based lease I was involved in was something like this:
they provide the trailer,
they maintain the trailer
they paid for refer fuel.
They provided me with fuel and tire discounts.
They would fund a fuel card while under load. (deducted from the settlement)
they paid for registration but would prorate and deduct the registration when the contract was terminated.
They paid cargo insurance
They took care of IFTA fillings and would charge or credit the settlement as needed.
They took care of all the freight booking and assigned loads to me, usually after a phone call asking if I could do the load safely and legally.
I was paid a base rate + fuel surcharge and accesorials
It was my responsibility to maintain and repair the truck.
Routing for the truck and fueling was my responsibility
I paid bobtail insurance.

Marginally more than a company driver but it worked for me at that time. I moved on when freight rates started to climb but they were not willing to increase the base rate per mile.

 

My current lease is:

They pay cargo insurance,
They pay registration and charge me back a little every week.
they provide fuel and tire discounts.
They take care of IFTA filling and charge back the differences
They provide an internal load board that I pick my freight from.
I take an advance against an assigned load to pay for fuel.

I provide the truck and trailer, and pay for their maint and repairs.
I get paid a percentage of the load with all the fuel surcharge and all of some accesorials coming to me
Routing and fueling is my reponsibility.
I decide when and where I run based on their load board.

The biggest difference is they have some specialty freight that I can haul that others can't/won't. For specialty freight I can demand a premium rate. The load board has rates posted so I do not have to do the negotiation thing unless I want to.

 

A nasty subtext you will see floating around is commonly called a "Fleece operator"

These are almost predatory in nature. A driver signs a lease with a company that includes renting a truck from the carrier. Part of the deal is the driver assumes all maint and repair costs for the truck. The trucks are relatively new and the weekly rental payment is sky high. these guys are typically paid on a very low rate miles contract. and the company has no incentive to keep them moving so they can make enough to cover the truck payment.and buy food.

A basic rule is if the carrier provides a truck for the lease, walk away. Keep the truck payments separate from the carrier.