please explain Owner Operator why lease to a company?

Typically except for rare circumstances, you don't lease to carrier if you have your own authority.

 

Simply asking.. Why not? Even when your starting out? This way there is consistent freight you get paid weekly choose your lanes.. If you can find a driver that's happy with the pay being offered, and you have profit you as the business owner are happy with, what is wrong with it?

 

The two don't go together. The question doesn't make sense. I think you don't fully grasp the three terms leasing on, vs own authority.

 

I Do understand. Leasing on is one buys a truck, making them an owner operator. The individual finds a company to lease onto. In return the company keeps him busy picking up and delivery freight. Having your own authority you have a company truck, you find your own freight. Whether it be brokers or directly from shippers.

Now, there are plenty of large carriers that allow company's who have their own authority to lease onto them. As an example JB Hunt. If one is just starting out why is it a 'bad' idea to do this? This is what I am asking.

If the larger carrier can keep a smaller carrier busy, and the smaller carrier crunches their numbers and is happy with the numbers, why not go with it?

 

That deal jb hunt has, and others like them. you are contracting to pull for them exclusively, same as if you were leased to them. It works for jb because they no longer have ANY of the dot regulations. And costs associated with them for that truck. It works for the truck owner by....well actually it doesn't have any benefit for the truck owner. Unless you consider being able to get away from jb hunts log department a benefit. But still can't go pull outside freight. Might as well just sign on with them.

 

You aren't leasing on to them. Leasing on means that you lease your equipment and drivers to a motor carrier. Your simply agreeing to haul JB loads for a period of time, just like you would with any other broker.

 

And why would you want to pay approx. $1000 a month for cargo insurance and not use it if your signed onto a carrier.

JB has dual O/O packages, one is for pulling their trailer under your own authority and insurance, then your also allowed to use their trailer for little while for your own freight. But this deal is not a full true lease on with alot of other benifits of lease on.

True full lease onto a carrier, they take care of alot of expenses and tend to get you the better choice of freight.
Also if one is going to take any amount of time off, having your own authority can get very costly. Daily fixed expenses are quite a bit higher vs leasing onto a carrier.

 

Also many shippers require companies to have a minimum number of trucks and or carry workmans comp. Also different levels of insurance requirements that normally an o/o with only 1 truck wouldn't carry.

i know for the company I am leased on to had many more opportunities to get into some of the bigger shippers direct just because we got workmans comp.

 

I lease to a carrier because the plates and insurance of going on my own would cost about $25000 a year minimum ballpark. Factor in drug test compliance, authority and record keeping, audits etc, trying to do that with rates that are barely above what I might be paid leased onto a carrier in my mind is very tough. Carrier provides trailer and customers drug testing and safety/logs compliance makes things much more convenient.

 

Are you leased onto with your own authority?