I'm thinking about going owner operator

Unless you have at least one year of experience you will find it hard to obtain the insurance necessary to operate as an independent trucking company with your own authority. You are probably limited to leasing your truck on with a company to use their insurance and loads. This does make it easier in some ways because the company is responsible for finding loads and complying with all the laws that govern the industry. You will be like a company driver in many ways. There are several things you need to do:

1) Start looking for owner operator companies and noting their requirements. Find some whose requirements meet your qualifications and inquire about them.
2) Estimate your expenses and create a business plan. Since you have some experience you know what it takes to drive the truck, now you need to know what it costs.
3) Think long and hard about these facts: Companies use owner operators because it is cheaper than owning their own trucks. Companies can increase the size of their fleet without rist, and they can REDUCE the size of their fleet without loss, since they don't have to make the payments. If there is a lack of freight the company will load their own trucks first because there are payments to be made on that equipment and they can't afford to have it sit. They can easily terminate the lease of an owner operator to reduce the size of the fleet.

Now consider your costs, this is a rough outline and your costs may vary.
Fuel $3.00 per gallon and 5 miles per gallon = $0.50 per mile
Truck payment $2500/month and 10,000 miles = $0.25 per mile
Tires and oil changes = $0.05 per mile
Other Maintenance = $0.05 per mile
Trailer rental = $0.10 per mile
Tolls and misc expenses = $0.05 per mile
Driver Wages = $0.50 per mile minimum since an experienced company driver can get at least 40 cents per mile plus benefits and the employers share of taxes.
TOTAL SO FAR = $1.50 per mile, and there is a bunch of stuff we haven't considered yet.

Now consider this: You will probably be paid on short miles. Your load may pay for 600 miles but with that being paid zip to zip you may drive more like 650 miles. You are still burning fuel on those extra miles so you just spent an extra $25 today.

I have not seen a by the mile lease deal yet that consistently paid over $1.00 per mile, perhaps $1.25 once you figure in the fuel surcharge. At that rate you are loosing money. You may be able to make your payments but you will not have any money in reserve to make the big repairs when needed,and trust me it will happen. There is a thread on another forum today about someone who went to his truck to find 4 flat tires due to vandalism. $1800 later he is finally on the road and working for free this week between fuel and tires. Not something he planned on but it happens.

Consider this path very carefully, and whatever you do - DO NOT enter into one of these lease purchase deals where you lease the truck from the company you work for. Those are bad news. Good luck.

 

AMEN! Your model is very aggressive; for example I would NEVER have a $2500/month truck payment and thankfully we get almost 6 mpg and buy our fuel for around $2.50. But the direction you provide is very sound. When we were looking to expand our fleet which includes 3 company trucks and 1 full-time O/O and 1 some-time O/O, I drew up the worst case scenario. If we can make it in that environment, then I felt comfortable that we had a good opportunity to be successful. We buy our own plates and insurance as well plus we have employer taxes for our company drivers. Not to mention cell phones, XM radios, office help, factoring costs, systems/software, etc. I also used the 10,000 miles/month as a guideline and also keep a tight leash on our deadhead miles. And that assumes that everything is rolling along as needed; throw in a sick driver, truck repairs, or slow freight (like it is right now) and you can get behind quickly if you did not plan for such scenarios.

One thing to consider for someone wanting to be an O/O is investigate thoroughly any company you decide to lease on to and then plan to stick with it. It will cost you money if you decide to move later on. Some companies may require an up front escrow, then you will have orientation time plus all of the prep work before you turn your first mile. Any time we made a change, it was a good two week dent in our earnings.

Anything worth doing is worth doing well. Plan well, and remember that luck is where preparation meets opportunity.

 

I figure that it is better to have money left over in the budget at the end of the month than not have enough to go around. People who only plan for the barest minimum expenses, like $2.25 fuel and 8 miles per gallon are only setting themselves up to fail. If you can plan to make a profit in the worst times then most of the time you won't have to worry as much.

Something else to consider. NEVER take a load for less than it costs you to take it. If your costs are $1.00 per mile before wages then don't take that $0.90 per mile load. Look to deadhead farther and get a better paying load. Take this for example.

Load A is 20 miles of deadhead and paying $300 on 380 miles. Work that out and you have $0.75 per mile for your day and only $300 in your pocket to buy $200 worth of fuel.

Load B is 200 miles of deadhead and paying $600 on 300 miles. Still one days work and paying $1.20 per mile for all your miles and you have $600 to buy $250 worth of fuel.

Both loads will tie up your truck for one day and some people will think that taking the closer load is always better no matter how cheap it is. This is not the case. You also have to look at the total cost and sometimes it comes out even. In this case please choose the higher paying freight and let the cheap freight rot on the dock. When you take a cheap load you only encourage the brokers and shippers since they moved that load for $300 they will not pay more. If they don't move it for a day or two then they will raise the rate and when your next load brings you back into town perhaps that $300 load will pay $500 since it hasn't moved yet.

I know of several people who will NOT put freight on their truck that does not pay at least $2.00 per loaded mile. They may deadhead all over to get it but they are making money since they are not wasting time with cheap loads. You generally burn less fuel empty than loaded.

 

I totally agree and never take cheap freight! My company drivers could care less since they get paid whether loaded or empty. I just try to stay in the lanes where we can minimize our DH. I would rather let my drivers take time off than have to chase cheap freight.

 

I own my truck already it was given to me by my uncle during the big fuel crisis so i never did go owner operator otr i have done some logging for about 2 weeks and wasn't making much money would i make more with an OTR company

 

Hey there Pete - is your truck setup for OTR? What was your uncle running with it? There should be more money in OTR if you're setup for it, logging can tear a truck up.