Question for the Independents

Oscar you should talk to rontonio ( off the record) . You could compare #s and maybe answer your question .....

To me leasing seems like a employee situation . I was on mercer's web site and the application asked your spouse's age and if they worked and where. And how many dependents you have.......does that sound like a employee deal......

Leasing is forbidden in Europe ....


Sorry rant over

 

Amen to that,i spent every weekend at home since i got my authority and usually i took a load home or just dropped one near by.

 

The great debate. I leased on with a view to get my own numbers, but I'm leaning toward staying put, though it has only been 3 months and I have a lot more to learn about the business in general.

I do like the lower fixed costs - less pressure to get out and work if I need to park it for 2 weeks (not that I have yet!).

The extra responsibility and paperwork sounds daunting right now - and should also be considered in the equation as 'work' if one is not leased to a carrier handling that.

 

I hear ya. Landstar on one hand stresses the "You're an independent contractor" - whilst the other hand smacks you with employee type requirements.

 

Mercer, and other carriers, want that info in case the irs comes calling and wants to garnish your settlements.

 

I'm losing out compared to some (especially those leased to carriers with gravy direct freight), and saving tens of thousands compared to others.

Costs of having my authority:

Insurance: $9,000 for auto, cargo, & GL
Plates: $2250
HHVUT: $550
CA BIT: $700
Permits: ~$500
Load boards: $1200
Bestpass/prepass/NCpass: $300
Drug testing & consortium: $250
-------
~$15,000/year

I'm also paid in ~30 days instead of weekly, and I spend a couple extra hours each month & the better part of a day once a quarter doing paperwork.

 

I'm new to the O/O field but after talking with a lot of guys that are doing both it seems like unless you have your own set of brokers and/or direct customers leasing on would be the way to go because of steady freight so to speak and also the fuel and tire discounts, fuel especially makes up some of the 10%-25% you're giving up in return. And of course one of the obvious is getting paid on time. Now one thing a guy did tell me is that some companies that you lease on to you're handcuffed to their loadboard and often times you rely on the agents to negotiate rates for certain lanes. All in all if you had an idea of customers you think you could get or brokers you'd like to work with then by all means reinstate your authority. Good luck.

 

Have talked to some guys that have a good lease deal and they are happy. Talk to some that are pretty much company drivers. No idea why they would ever sign on to something like that.

 

3 guys are heading out west to go hunting. They drive through most of the night, but eventually get too tired to drive and decide to get a motel. The clerk say's the room is $30 so they each give the clerk $10 and head up to the room.

The manager see's what the clerk charged them and say's the rooms are not $30, but in fact are $25. So the clerk takes 5 one dollar bills and heads towards the room.

On the way there the clerk gets to thinking... how will I divide 5 single bills up between 3 guys, so he puts $2 in his pocket and the gives each of the guys $1 back.

Each guy paid $10, but received $1 back so they paid $9 each. 9 x 3=27 plus the $2 the clerk kept equals $29. Where did the other dollar go?

That's the game an owner operator plays vs an independent.

-Fuel discounts are a joke. It's a game of 3 card monte.
-O/O are paying the bulk of insurance cost anyway. And occ/acc and bobtail is as much if not more than gl, cargo and an owners work-comp policy. If you divide my annual cost by 52 for $2M gl, $250k cargo, and workers comp it's $79/week. (your mileage will vary based on experience and loss runs) Except for comp (based on wages), all of those decrease (on a per truck bases)as you add trucks.
-most likely you're already paying for plates and 2290's. Some co just decrease your % and tell you they're paying for it.
-owing for ifta is not a bad thing, if you paid the least for fuel- too many posts revealing o/o who can't do math and verify it with a comment like they never owe more than $2, but that's another post.
-permits are a pass through
-not sure why anyone would pay for pre-pass, especially if you run a lot of permits. It's actually comical how many people who are dead set against electronic logs actually pay for the privilege to have the DOT monitor them.
-drug consortium is like parking, if you look past the first few, you can find it for free. They make their money when you are selected by negotiating cheaper volume pricing.

What you are really paying a percentage for is time. Time to get customers, book loads, bill loads, collect payment, pay bills, file ifta, go to DMV, get permit, etc. Some people don't want/can't perform these tasks.

I was eating the other day and a guy was bragging how his dispatcher was too busy so he decided to book his own load. (I found that interesting in itself. No wonder so many bogus loads are booked and billed, but never picked up? Brokers will let drivers book loads?) He found a load going 500 miles, they offered him $750 for a 48k load, but he got $1000. It took him 5 hours to load so he talked them into another $50. I'm sure he said some other stuff, but I could stop thinking wtf over and over in my head. I couldn't decide who I should be more pissed at and certainly didn't have the heart to tell him I deadheaded 200 miles out of the mountains and picked up a 35k load paying $1600 on 313 miles going to the same city. Full disclosure...This was not one of my customers, but it was someone I had recovered a load for before and made him look good. I saw it out there and threw out a number. He didn't even counter. Maybe I left money on the table? I'm pretty sure he knew what he was buying. Either way, if you can't recognize opportunity and capitalize one will probably never net what a good lease program will generate them.