Leasing on to run own freight?

There are a few companies where you could run your own freight, of course the want a cut of it. Try Landstar, Mercer, and Jones Motor.

 

BAck when I had my trucks and authority I had a few drivers who I let lease on to me and then allowed them to do there own thing. These were mainly folks we knew and who were capable of doing it themselves. We just handled the billing and charged them enough to cover our costs and a bit more. Better deal than they could have gotten elsewhere. But we were a small 6 truck fleet, I'm not sure what a bigger co would do.
Having your own authority is ALOT of work. especially if you don't have someone at the house to do it. I'm not sure I could have done it from the truck. then again that was 11 years ago before laptops, heck even cell phone were pretty rare

 

There are a couple big differences between going solo and leasing on (whether or not you have your own authority)...

Have your own authority and run solo:

• You are responsible for not only finding loads, but collecting the $$. Nowadays you can get a factoring company to handle that for you, but be prepared to pay their fee of between 4-5% (on average).
• Before you take a load you have to make sure that the factoring company (if you're using one) will factor that invoice - there are a lot of companies out there with bad credit - if you take a load from them you're very likely to be left trying to collect yourself which in the end could mean never collecting and actually losing $$ from having to go to court, etc.
• You need to have a very healthy "reserve fund" to get you through those times that you have no cash coming in due to non-payment, etc. If you start up only relying on credit cards, you'll find yourself shaking hands with the repo guy soon enough.
• You are responsible for making sure that you have enough insurance coverage to carry the load...I've heard a lot of horror stories about guys taking a load, crashing, and then being sued because they didn't have enough insurance to carry the load in the first place.
• Insurance for your own authority will cost you around $8000-9000 a year (that's an average - some pay a little less, some a little more)
• You are responsible for having, maintaining, and insuring a trailer
• If you get stuck and can't find a load, you're still on your own
• You should conisder incorporating to prevent any personal losses due to truck related incidents (get into an accident and you could potentially lose everything including the kitchen sink in your home) - the whole incorporation thing is a whole other thread...

Leasing On:

• When you take a load, you know that you WILL get paid for it, and you usually know exactly (down to the day) when you'll get the check / direct deposit / comdata, etc. No waiting for checks to be mailed, no waiting to make sure the check doesn't bounce.
• When you're leased on to somone they usually deduct a percentage from your revenue to cover admin fees, etc. So if you're quoted a price, you know exactly how much of that to expect.
• Usually when you lease on to someone, you get paid within a week of delivering the load - so you'll still need some $$ saved up to get you through the 1st couple weeks, but you can (not recommended) do it with credit cards if you have to, and never come close to seeing the repo man. You're left to cover personal needs and fuel for the 1st couple weeks, until you get "on track".
• What you can expect to pay when leased on (this is different from company to company) and usually this is all deducted from your settlement - not upfront:
  • "Broker" fee - you have a person working to find you a load at all times
  • Bobtail Insurance (some companies pay this for you - but it can run between $40 - 100 a month depending on truck & coverage)
  • Trailer rental fee (again, some companies pay this) which always includes general and normal maintenance repairs (tires, etc) provided you haven't been negligent
  • Load Insurance (this isn't usual - most companies pay this - but it can run around $600 a month) You pay the bill - the company takes care of claims, maintaining the policy, etc.
  • Plates & Permits (a lot of companies reimburse you after 6mo - a year) This can cost about $3000 a year (depending on what states you run and what's listed on your cab card)
• There is no reason why you should sit anywhere for any length of time. You're paying someone to keep you loaded.
• You can still control your home time. But you can get home more often and without the worries of finding a load to get back on to or whether or not there's going to be $$ waiting in your mailbox.

20 years ago you'd be crazy to lease on to a company - you were sure to get ripped off more ways than none...nowadays just the opposite is true - unless you have an office team back home it's extremely hard to actually look at what you've done over the last year and be able to pat yourself on the back - you're usually left wondering what the #### you did, and asking yourself why it was worth it.

Just my $20.00 worth.

Michelle
Jancee Trucking - Greene, NY

 

Any idea, where to find list of a "good brokers"? I know OOIDA has a list of brokers, who don't pay, but it is only several names on it. How to find people whom independent trucker can trust? And where to look for those "factoring comanies" which can collect payments for me?

 

IF you need help on finding loads maybe I can help. I work part-time as freight agent. Looking for good broker *####* good luck I got burn alot by those brokers.

 

Factoring companies are just for all purposes "loan" companies because if the broker, shipper doesn't pay them then they in MOST cases come back to you for the money. It's a win win situation for them, not you. You can find them by doing a search on the web.

There are ratings on brokers that you can check, Blue book, Gold book etc. Most of those are as good as you're going to get, but there is NO guarantee that you will get paid. With brokers only having to put up a $10,000 bond for guarantee of payment it doesn't take long for that to be depleted by claims filed on the bond for NON payment.

Leasing to companies has it's advantages but READ and UNDERSTAND the lease BEFORE you sign it. Have your lawyer read it and explain it to you. Most leases are to protect the company not you.