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

ladr · Mar 5, 2018

Blu_Ogre said: ↑

We need to expand your vision some more. Some operations the $ per mile can be rather healthy, but that is because they have significant added costs that I do not have. An example is the oversized crowd... The truck owner gets the privilege of paying for special permits, escorts, sitting around waiting for curfews to lift, and a bunch of stuff I have no clue about.

yes, One national chain we have a 0.20 per gallon discount, Another is 0.25 + more points per gallon on their rewards card. One of the other national chains is a cost plus game. we supposedly pay 2 cents over the truck stops cost for the fuel. Currently in OR that works out to a price of $2.35 per gallon vs $2.88 on the sign. I figure on burning about 100 gallons per day so the discount adds up in a hurry.

Anticipating the next question.... I get around 6.5 mpg and plan to run a bit over 600 per day on average. Cali still has a 55mph truck speed limit.
Click to expand...

All your posts in this thread needs to be pinned to the top

Blu_Ogre · Mar 6, 2018

ladr said: ↑

All your posts in this thread needs to be pinned to the top
Click to expand...

Thanks,

I think @Ridgeline and @Hurst did I fine job also. I particularly liked the concise technical/legal post from @Ridgeline. @Hurst did a great job expanding on the leased carrier portion.

ladr · Mar 6, 2018

Blu_Ogre said: ↑

Thanks,

I think @Ridgeline and @Hurst did I fine job also. I particularly liked the concise technical/legal post from @Ridgeline. @Hurst did a great job expanding on the leased carrier portion.
Click to expand...

Tons of knowledge between those two.

mwehrle · Mar 9, 2018

Ridgeline said: ↑

A very simple explanation.

First what is a carrier?

It is a company or entity that has an authority to operate under federal approval to haul interstate freight. The constitution has the duty for regulating interstate freight put onto the feds and only the feds to make sure everything is fair and even.

Second what is an Owner Operator.

An owner operator is the owner of a truck and the one who operates it.

Many times this means two things, one that is leased to haul freight exclusively under a carrier's authority and one that has their own authority but in fact it is the former.

An independent o/o is one who has their own authority and acts as both a truck owner and a carrier.

Third the regulations allow an owner of a truck to be leased onto a carrier for the purposes of hauling freight for compensation. This is a legal and contractual agreement between the carrier and the owner, no one else.

There is what is called a purchase lease which has nothing to do with leasing with a carrier for work. That is a legal financial arrangement independent of any of the DOT (technically FMCSA) regulations.

AND then there is the issue of employee vs. O/O.

The twist to all of this is that there are really three entities when it comes to a lease, the carrier, the owner and the driver. The carrier does not care, the regulations does not care either how the driver is paid. ANY settlements (that's the proper and legal term used for the payments between a leased party and a carrier) go to the owner, and that is in the form of a 1099. The driver is paid by the owner and that is the business of the owner.
Click to expand...

This is very helpful. Thanks for taking the time to break it down.

mwehrle · Mar 9, 2018

Hurst said: ↑

Sometimes,.. usually its best for a rookie to find a carrier who has the shippers and freight lanes to keep the O/O busy. These carriers usually offer less of the gross linehaul to the O/O, but better rates and more consistent work. Typically 70 - 75% (Should,.. but not always the case). Sometimes the carriers with their own customers will dictate how the O/O will work. When they can go home and when they need to work. Limit the time an O/O can be at home etc.

Other carriers have no shippers. They have authority only. The O/O uses the carriers insurance, office staff for filings, and what ever other offers the carrier may offer. The O/O may or may not get more of the linehaul rate for the loads he books. Typical here will be 75 - 85%. This would be more for the experienced O/O.

I fall into the latter. I hate paperwork. Other than my bols and some personal things. I dont have to file anything or deal with audits, or any of the inner office things.

An O/O can earn as much or more in either of these cases than an O/O who operates with his own authority who gets 100% of what ever he hauls. When leased to another carrier, there are (Usually) weekly settlements. The money is more consistent than dealing with 15 - 45 days (Or more) waiting to get paid by brokers or a shipper. Or giving up a percentage to use factoring to get paid. The O/O will need a larger cash cushion in order to remain operational.

Naive O/O's can also be taken advantage of by carriers. A common mistake are guys who lease on for 90%. They look at 90% vs say 73%. They think they are getting more,.. but which is better,.. 90% of $1200 or 73% of $2000?? The carrier keeping 30% may offer cheaper insurance, fuel discounts, mechanical and other benefits. Where the carrier taking 10% offers nothing but its authority. Many things to consider.

There are many different arrangements between O/O's and carriers. Some carriers advertise $1.10 per mile + FSC. Company drivers who do not know the market, do not understand rates, personal costs to operate often make the mistake of trying to continue operating as a company driver,.. chasing CPM.

This is a business. You wouldnt open a restaurant with out a menu and prices would you? You would have to know how much you can pay your help and where to buy your food at affordable prices. Trucking is a business where you need to know how all of your expenses and operating costs. This way you know how much your should be hauling for. A trucker who hauls for less will typically be struggling week to week and will most likely fail and go bankrupt after the first major break down.

We all started somewhere. Leasing your own truck to a carrier can be easier to get started. Going under a carriers wing can offer a safety cushion not afforded when going strictly solo with your own authority. So many different ways to get into trucking. So many hands in the pie.
Click to expand...

Thanks for taking the time to write this. Very helpful!

Log in or Sign up

Forums

Find Trucking Jobs

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

ladr Road Train Member

Trucking Jobs in 30 seconds

Wait, employers can't reach you!

Blu_Ogre Road Train Member

ladr Road Train Member

mwehrle Light Load Member

mwehrle Light Load Member

Trucking Jobs in 30 seconds

Wait, employers can't reach you!

Log in or Sign up

Useful Searches

Find Trucking Jobs

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

ladr Road Train Member

Wait, employers can't reach you!

Blu_Ogre Road Train Member

ladr Road Train Member

mwehrle Light Load Member

mwehrle Light Load Member

Wait, employers can't reach you!