How do Owner Operators make annually before and after expenses?

Discussion in 'Ask An Owner Operator' started by Tony1980, Oct 12, 2011.

  1. Tony1980

    Tony1980 Bobtail Member

    Oct 12, 2011
    Arlington, VA
    I'm starting tractor trailer school this Saturday. I plan on going into business for myself after a few years. I was curious to know how much does a Owner Operator pull in before and after expenses? How do they make their money? What type of cargo can I transport to bring in the most money? Thank you all for taking the time to read my thread and your input is appreciated.
  2. BigJohn54

    BigJohn54 Gone, but NEVER forgotten

    May 13, 2011
    SW Missouri
    Here is my first advice for you and it pertains to what to expect as a driver. You need to make it through a couple of years as a driver and hopefully this will help you develop realistic expectations.

    Here's my standard copy and paste advice. Remember this information reflects my opinions based on the facts and information that I have. I hope you find something of value in it. It is aimed toward helping new drivers avoid common misconceptions, disappointments and pitfalls within the industry. The most important thing you can do is search and read. Find out everything you can about becoming a professional driver and what will be expected of you. There is so much more to this profession than just driving. You will be expected to know and understand the laws and regulations that affect the industry. Armed with facts, form some realistic expectations. This profession is not for the "faint of heart". It will be a good fit for some and not for others. This profession is not what you think it is.

    You need to research and find out what the important questions are. You can make an above average living but you will make sacrifices that other jobs don't require. Do a lot of reading in the "Good & Bad Trucking Companies" section of the TTR Forum and get an idea of what company you want to work for and what type of trailer you want to pull. Don't just go to school and then try to figure out where to go to work. Set some long-term goals and figure out what steps you must take to reach them. Becoming a "professional driver" should be a step you use to reach your long-term goals, not a long-term goal.

    You must research these subjects to determine how they will affect you and your personal history and records. You would be absolutely amazed at how often schools will train you when you may not be employable as a professional driver. Their objective is to get you a CDL and them your cash. Job placement is second to this.

    As a professional driver your MVR will be second in importance only to your health, protect your CDL. All companies look at your MVR and have limitations on how many and what type of violations you can have. They also have a limit on how many accidents you can have. Most set a limit that is some combination of tickets and accidents over a three or five year period. Be aware that speeding in excess of 15 MPH over the posted speed limit is considered reckless driving in our industry. In addition, many violations, such as improper passing, will be recorded on your MVR as reckless or careless driving. Reckless or careless driving and truck rollover accidents can be a career ender.

    Criminal convictions can present a problem to entry into the industry. Each company has their own policies on this. Treatment of misdemeanors varies widely among companies. Most companies want either three, five, seven or ten years since a felony conviction. I have read driver requirements on some company websites that say no felony or misdemeanor convictions ever. Certain convictions such as aggravated and sexual offenses, alcohol, drugs and theft are also very hard to overcome. Alcohol and drug offenses can be a career ender.

    I have personally spoken with a company that will not take you if you have more than eight months unemployment in the last thirty-six months. That is pretty tough in the current job market. I have also spoken with a company that responded to a longer term of unemployment with, "You were a stay at home dad, right?" You will have to account for all your employers for the past three years and provide detailed contact information. Your job history is important and you must explain and document any gaps. A less than ideal job history can limit your opportunities.

    Now don't let any of this stop you from pursuing your goals. Just be aware of the drawbacks before investing your time or money and be realistic in the expectations you have for your situation. Don't go through training and find out you can't get a job. I have read success stories, on this forum, from drivers who had only a slim chance of finding a job.

    Just be aware that most school and trucking company recruiters are subject to deceive you or lie to you. They will let you talk about what you want and then tell you what you want to hear; based on what you have told them you wanted. Trucking is about moving freight to make money for the company. Your home time, family, paycheck and everything else comes second to this.

    Each person's financial situation is different. Don't take training from a company if you can afford to pay for it, get financial aid or even finance your training. If you do take company furnished or sponsored training, you will be contractually obligated to this company for up to year. If you leave, without fulfilling your contract, they will trash your DAC and credit reports and turn the balance over for collection. Many times you can find less expensive, and sometimes higher quality, training at community colleges or technical schools. Sometimes you may be able to get assistance with training costs. Check with the schools and your local employment office for possible financial aid.

    Regardless of your driving choice, after school you will go through company training. This can be a few weeks to a few months. Often drivers wait a week or two for their trainer to pick them up. Recently companies seem to be banking drivers in anticipation of needing replacements and trainer wait times may be increasing. During the first phase of training pay is often $400 a week and the second phase is usually $500 - $550 a week. Some companies pay less and some pay a little more. Some companies are poor at training and just run you team with your trainer. Check into this. Your trainer should be in the seat beside you, training you, not sleeping so he can drive the next shift.

    You don't want to wait around too long after training or you'll have trouble finding a job. If you get out of trucking before you have a year in, when you try to make a comeback later you will find they want you to start over. Make sure the school you choose will be accepted by the companies you want to work for.

    Driving a truck is not like any other job. Local driving can be backbreaking delivery work 10 - 12 hours a day, 6 days a week. Often you unload dozens of times a day or you are a salesman. You may park quite a distance away and make multiple trips with a hand truck to get your deliveries in and up steps. In my area most dump truck jobs pay no more than a good factory job. Regional driving is lots of loading and unloading time, fewer miles than OTR but the work is not as hard as local. The repeated waiting while loading and unloading will wear on you, push your HOS limits and reduce the miles you can run. Typical OTR driving is out for 3 - 5 weeks with 3 - 4 days home. It entails less manual labor, usually less loading/unloading and more miles. Many OTR drivers have taken local jobs to be home more and gone back to OTR so they wouldn't be too tired to do anything when they were home.

    You'll probably have to pay your dues before you get the gravy job. Many local driving jobs want OTR experience while local experience is seldom useful for OTR jobs. Weekends off, if you are lucky enough to get something like that starting out, may be home Thursday afternoon and leave Saturday morning or home Friday night and leave Sunday afternoon. Loads often deliver early Monday and you leave in time to get them there. Often your home time will be in the middle of the week. Some jobs do get you home for 36 - 48 hours on the weekend. Your location will play a big part in all of this.

    New OTR driver starting pay is usually about $25,000 - $40,000 annually. It will often be less if you choose regional because you will drive fewer miles. Don't use high weekly mileage numbers to calculate your potential pay since this will often lead to disappointment. Obviously you will know your pay per mile so many companies will exaggerate your weekly mileage to make their job position seem more appealing. I would use 2300 - 2800 as a weekly mileage figure. If loads are slow or the economy is soft, you often find yourself begging for 2000 miles a week. This will vary widely and some companies may run you 3000+ miles a week.

    Above all be aware that time equals miles and miles equal pay. If you spend a lot of time at home or loading and unloading your pay will suffer. Some companies will utilize your hours well; keep you busy and you won't require a 34-hour reset. Some companies will use your hours poorly, reset you in Nowhere, USA every weekend and never get you any miles. Most OTR companies don't put any value on local experience so it is better for your career to drive OTR first, if you will ever want that option, or to get that good local job.

    Don't forget to factor in the cost of living while on the road. If you get a day off for each week out, that will be about 319 days (45.6 weeks) a year on the road. Spending $4 for breakfast, $8 for lunch and $12 for supper will cost $24 per day. At this rate, you will spend $7,656 per year on meals. You can easily spend $10,000 a year when you add laundry, showers and other items that maintaining a home away from home entails. IMHO, A frugal person can probably get by on $4,500 - $6,000 per year.

    All the big companies have websites and online applications. Isn't this great and convenient? IMHO, no it isn't. While it is a fact that most of them will require you to fill out their online application at some point, I would not depend on this to get hired. I have read posts from drivers who were approved but their application got lost in the system. They made a phone call and were in orientation a few days later.

    I personally believe, and know when I have been in a position where I hired; someone that proves they want that job is more desirable. Visit the company you want to work for if possible. If not then call them. Then fill out the online application. If you make an impression, someone will be waiting for your application to push it through the process. If they make you do the online application first, still follow up in-person or by phone. Make them want to hire you. You need to do something or be someone who stands out from the crowd. Do regular follow-ups by phone on the jobs you really want.

    Too many new drivers just settle for a job from the list the school has. There are many more job options available. The school works in volume and looks the best when it says 90% of our graduates find employment. So obviously they get better results from companies that hire in higher numbers. These companies can hire all their graduates with the least effort on the school's part. If you have anything in your history that makes you less desirable than your competing job applicants, a phone or in-person interview will often bring the best or only results.

    Now I'll share some suggestions and some thoughts on common misconceptions. If you have no winter driving experience or are apprehensive about winter driving in a truck, consider attending school in early spring. This will give you several months to acclimate yourself to your new driving career before you have to tackle the chore of winter driving. It also will get you started in the busier time of year when more miles are usually available to make you more money.

    Often new drivers believe that a diving job will allow them to see the sites of our great country. While there will be some opportunities to do things, you will seldom pick the location. Some resourceful drivers manage to find things to do and even manage to get loads going somewhere they want to sightsee. For the most part, it is more likely, you'll see all the sites you can from the truck windshield on the Interstate or parked at the truck stop. Company policy varies with respect to out of route miles and use of their tractors for personal conveyance. Know your company's policy on these matters.

    Educate yourself on idling laws and your company's policy on engine idling. Find out if they have APUs (Auxiliary Power Units). You need an idling engine or an APU to keep you warm or cool during you off-duty/sleeper berth time. Find out what your company's policy is on inverters. You will need one for your computer or other electrical devices. Usually you will be limited to what you can plug into a cigar lighter/outlet.

    After researching come up with a short list of companies that meet your needs and requirements. Don't forget to consider and compare pay rate, potential miles, health insurance, retirement plan, idle policy, APU availability, layover pay, detention pay, rider policy, pet policy, Prepass, Pikepass and toll & scale reimbursement policy. I'm sure there are more and not all items apply to every company.

    Some companies pay a percentage of the load revenue instead of per mile. Some of these treat you as an employee and some treat you as an independent contractor. As an independent contractor taxes won't be withheld and you will be required to make quarterly payments for your income tax and social security. In addition, an independent contractor usually won't have health insurance or workmen's compensation. While percentage pay isn't inherently bad it is packed with pitfalls for a new driver. My advice is stay away until you understand the industry better. If you go this route, now or later, do lots of research.

    Where you live can affect your hiring options and your ability to get home time. Most companies won't hire from an area if they can't get you home. If you live in Florida, especially South of I-4, you will most likely have fewer hiring options. Due to cheap rates, many companies don't run that area. Do some extra research if you live in Florida.

    Just say no to lease purchases. Don't let your company persuade you to sign a lease purchase. While not all are a contract with the devil, all are designed so that you make the company as much or more money than you did as a driver. Often you are nothing more than a company driver with operating costs. Your personal needs, income and home time will come second to their loads and profit. Just like company training you have obligated yourself to comply with a contract that has dozens of pages insuring that you get the short straw. My advice is stay away until you understand the industry better, if not forever. If you go this route, now or later, do lots of research.

    While it is impossible to cover everything you need to know, this should at least make you realize there is much to research and consider before you take a leap into the deep end. Trucking is much like any trade or profession that offers a challenge, an advancement path and great pay. You can only learn the important things through experience on the job. Always protect your CDL; it is your means of making a living. Do not let anyone pressure you into making bad decisions. Be ever mindful of the responsibility you bear and the liability that mistakes can cost you and your company. Never operate a commercial vehicle above your skill or comfort level. Both will increase with experience.

    There isn't a single dedicated professional driver that won't tell you we need more professional drivers in this profession. Make a commitment to yourself right now to be more than a steering wheel holder. Take pride in what you do and others will see this. You will find it will make you feel good about yourself and pave the way to the jobs others only dream of. Good luck and go make us proud.
    Lepton1, Captbob412, gelfling and 3 others Thank this.
  3. BigJohn54

    BigJohn54 Gone, but NEVER forgotten

    May 13, 2011
    SW Missouri
    Now to try and answer your question about owner operator earnings. Asking that question without any qualifiers is like walking into a restaurant and asking how much does everyone gross and net. Each person's tax situation is different too. A single person won't take home near as much as a driver with a wife who doesn't work and four kids.

    The answer will depend on the freight lanes you run, the trailer type you pull, whether you have authority or lease, whether you own your trailer and if you lease whether it is mileage or percentage.

    You might gross between $150,000 and $225,000 but don't get excited as most of that just passes right through your hands. What you gross is not very important in the grand scheme of things.

    You might gross $225,000 running a cheap mileage lease and paying high trailer rent. In this situation you could be putting 170,000 miles a year on your truck and taking home $60,000 before taxes which might leave you $47,000 after taxes.

    Or you might gross $196,000 running your authority with your own trailer. In this situation you might run 110,000 miles a year and take home $60,000 net after taxes.

    Compare these two and you see for about equal wear on the truck you can run three years at $60,000 or two years at $47,000. For about 330,000 - 340,000 miles the net earning difference would be $86,000 or almost double.

    So as you can see, gross earnings don't mean anything. Even net earnings need to be compared against the miles to see where you are.

    If you are going to lease a truck to a company, look at percentage leases since they will make you more without chasing miles. When you chase miles to make additional revenue, the only winners are the oil companies and the repair shops.

    Next let's talk about what it might cost to get started. Do not consider a lease purchase with a company that you will lease to. This is not a good deal in any way and you will have weeks that you get a bill and not a paycheck. You will most likely average less than a company driver in annual income.

    You will hear different numbers for the capital needed to start. The numbers I am offering are estimates of the least that I feel would be prudent. Having enough will allow you to recover from breakdowns and mistakes. If you don't have enough and no place to borrow any you lose the truck. Decide what you are willing to lose and have an exit plan.

    If you want to purchase and finance a truck and lease it to a company, you should have $10,000 to start. If you want to purchase a trailer add another $5,000. Owning a trailer saves money but isn't always a good idea when leased out. It can hurt you in many company operations with lots of drop and hook loads.

    If you want to get your authority you need a truck and trailer. For this you should have between $20,000 and $30,000. You will wait for your money hauling broker loads and you need money for wages, fuel and repairs while you wait.

    It will be hard to save money with a driver job that pays very little until you get a few years experience. You seem like so many that show up on the forum thinking owner operators are making big money. Many make a great living and 2 - 3 times as many lose everything. Everything meaning their homes and spouses too.

    I'll give you what I think you can expect, IMHO, for various situations. If you don't quit driving in the first year, like 80% will, you can expect to make $25,000 to $40,000 gross as a new driver. After taxes and on the road living costs, I would expect to bring home $22,000 (based on $32,000 gross less taxes and $69 a week for road expenses) if I was lucky and frugal. For the second year maybe $28,000 (based on $40,000 gross less taxes and $69 a week for road expenses).

    As an owner operator you might net from $40,000 to $90,000. You might blow a motor on a $40,000 year and if you don't have the money in your repair escrow is could cost 40% of your earnings to rebuild it.

    These are some great threads to read to gain knowledge about the industry:

    In addition, read all the docked threads in the "Ask An Owner Operator" section.
  4. Tony1980

    Tony1980 Bobtail Member

    Oct 12, 2011
    Arlington, VA
    Thank you for all the useful information. I will admit that I'm kinda of disappointed. My recruiter hyped up driving like it was such a great career. Since I been researching online all I've heard is horror stories of how drivers are underpaid and overworked. I knew it sounded to good to be true.
  5. lowjo

    lowjo Light Load Member

    Nov 19, 2009
    stick in there man,get experience. we all started someplace..
  6. BigJohn54

    BigJohn54 Gone, but NEVER forgotten

    May 13, 2011
    SW Missouri
    Many of us will complain and #####. We also give you the worst case scenario of what to expect. It can be hard starting out. We just don't want new drivers comming in with unrealistic expectations, driven by the lies told them by recruiters.

    Still a bad day in a truck beats a good day in the office or factory. If you are looking at trucking only for the money, you will likely be one of the 80% that don't make it a year. Many say 95% don't make it a year.

    A professional driver's life is not like anything else in the world. I think a farmer's life is similar and a police officer is kind of similar. Some are cut out for OTR life and many are not.

    Just do lots of research and have realistic expectations. You can make above average earnings but you will make sacrfices that other careers don't require. If you are willing to sacrfice and want big bucks, look into oilfield driving positions.

    These are some good threads on this subject:
    Mommas_money_maker Thanks this.
  7. dnscouter

    dnscouter Bobtail Member

    Jan 6, 2010
    I'm right with you tony1980 the recruiters do a great job of telling you all the good and conveniently leave out the bad, I think there's still money to be made but its not like it used to be.
  8. Mommas_money_maker

    Mommas_money_maker Road Train Member

    Oct 2, 2011
    North Carolina
    This has been some of the best advice and realistic numbers I have seen yet. Dont give up in the first 6 months, give it at least a full year before you decide to give up or keep going. Also, dont become an own/oper for a few years as there are many pitfalls and you have to be a good driver as well as a good businessman in order to succeed. Yes most learn by doing but why go broke your first time? Successful o/o have drove at least a few years and may have someone who has been an o/o for years giving them advice when needed like I do from my father in law.
  • Draft saved Draft deleted