Pros and Cons of have your own authority

I've been leased on to a company for several years. I'm branching out next year with a second truck and my authority. I'm doing my research now but can alway use advice from people that's already doing it.
Just wanted to get te pros and cons on having you own authority vs. being leased to a company

 

Pro You have the freedom to run your company the way you see fit.

Con You're on the hook for everything your company does.

 

Cons: You buy tags, tires, fuel, if you have a driver you don't know how he treats your truck and insurance...
Pros: Money increases but also decreases and You pick your own freight

 

This month makes one year I've had my own authority. I like that fact I control my loads and my money but when I first started I was hard to get decent paying freight. A year later now I have about three or four brokers I work with exclusively and things are working out well. So I would say pro: freedom. con: getting your foot in the door with freight.

 

Pro: You don't work for anyone! No contracts, Do what ever you want, make just about what ever you want might take a few miles to get there. And the best part is you won't be making some other company money by letting them think that "this is a good deal, the company helps with tires, fuel, repairs" total bull ship.

Con: You can't just hit the curbs anymore with someone else's trailer like you use to.

 

there are actually companies out there that a guy can do pretty well leasing to. you have to find the right ones. they are several where you pick your own loads and control everything your self , mercer and landstar are just 2 of those. the are differences in any of them, example:: mercer pays the fuel tax( by that i mean O/O doesnt pay any shortage) at landstar the o/o it.

i had my authority for close to 15 years and had 2 trucks and 6 guys leased. the majority of what i hauled though was direct from the factory in the last years, at first i went thru brokers. they are sometimes a little lax in paying.


that may be the biggest thing in going with authority, is having the money to operate and keep cash flow going.


one thing many guys think is i am giving a company 25 per cent of my revenue. in reality you arent, that 25 per cent will be reduced by at least 10 per cent in brokers fees, another 2 to 3 percent if you have to factor your freight bills. then you have your liability ins, cargo ins etc. coming out.

but dont go into it thinking you are going to make 25 per cent more money. thats is not necessarily the case.

there are many cases where leasing with a company can benefit you more than having your authority. and others can do better having your authority.

you have to look at the area you live, what type you want to pull, what type trailers etc.


myself at this point in life, after having my authority for 15 years, it is much more relaxing to be leased to someone. i did 204,000 on 105,000 miles last year , i avg. 2100 miles a week loaded and deadhead miles. i am ahead of that pace this year.


and 6 wheeler , you cant really do what you want to. especially if ya have two trucks, your first priority is keeping the other guy loaded, but you will find his truck tends to break far more often than the one you drive.

 

Each additional truck is an additional headache until you get to the point you can afford some OFFICE side assistance.

 

Pro: Its all on you. You work when you want, drive what you want, where you want and for what you decide is a fair rate.

Con: Its all on you. You now have to be the dispatcher,shop foreman, safety man, CEO ect. ect. and if a one man O/O or small operation the driver also.

 

Yea, but I'm sure this guy asking the question is only going to own 1 truck starting off.
I pretty much do what I want to. All of my stuff if paid for, I work when I want, go where I want, haul what I want to haul, and for who I want to haul it for. Sounds like a pretty good deal to me, I don't want to ever have to work for someone else again.

 

You said you're getting a second truck. Agree with all the comments here. You'll need to keep that other truck running or the driver won't get the miles (pay) and you'll lose him. With 2 trucks, are you going to have 2 drivers? If not, you'll be looking for loads for the both of you unless you have all direct customers. You should plan to have 6 to 8 weeks operating capital in the bank (fuel, driver pay, truck, trailer and insurance payments, etc.) so that you don't have to factor. Factoring, at 1%+ for recourse, up to 5% for non-recourse, takes that percent off your top line which flows directly to the bottom line. It's like crack. Once you start, it's hard to get off it.

Just know there is going to be a year or 2 where you're MC is so fresh, many brokers won't work with you. Also, hold your grounds on the rates you accept. Once they have their notes in their systems that you'll take lower rate freight, you'll never see better from them.

Good luck with it. There is a pride that comes with owning your own destiny. A lot of headaches too.