So you want to "own " your own company

I make a record of my odometer every time I cross a state line. If you don't log your mileage you could be fined. I know a major carrier who was audited and fined because some of their owner operators didn't write down their mileage when they entered a different state. They only wrote the actual miles driven. Your IFTA or fuel taxes have nothing to do with your loads. You are supposed to keep a record of all miles driven whether loaded or empty.

I designed a form for my business that I use when I record my fuel mileage. On my form I also have a place to list all fuel purchases and expenses for that trip. I put everything for each load or trip in an envelope. You can purchase trip envelopes at most truck stops, but you can also use plain envelopes to keep each load separate.

I keep a composition book on my dash. When I start a new trip/load, I write my beginning mileage down at the top of the page. Since I know where I am going, I list all states that I will cross. As I cross each state, I note the mileage from my odometer. At the end of the trip I write down my ending mileage. I can then transfer that information to either my trip sheet or an envelope. My ending mileage will be the beginning mileage on the next trip. I also write down any fuel purchases and the mileage at the time I fuel.

You could purchase a small recorder and just talk into it as you cross a state line. I have known some who do that rather than try to write while driving.

 

Originally Posted by angelface
do you actually log all the miles driven in each time you are entering a state or do you calculate them based on the loads hauled?



this is a "must do" when you complete your IFTA forms that are required every quarter,
logged actual miles,loaded and empty,
through each state and when you cross state lines,
as well as all fuel purchased(what state,when, and total gallons purchased) in each and every state,

there are companies that you can hire to complete this.

We track,complete all of our forms for miles and complete all IFTA documents ourselves.

The first quarter was confusing,
after that it was a breeze.

crusin

 

You can do what I do. Record nothing and wait until the end of the quarter then get out your log book and say, where was I January 1st. Now put that into route planner for Microsoft Streets. Then put in where you delivered to and so on. Do this for the whole quarter then look at the output. It tells you the miles and states entered. Just add them up. Piece of cake.

 

RM TND 500 tracks all miles by state. I know other GPS units do the same. Takes me less than 15-minutes to complete IFTA. Actually getting ready to go to the truck and grab GPS so I can complete form today. I

I'm just in tax hell today.

 

I read your initial post with great interest. Frankly, your advice has been invaluable. However, I'm ready for the next step in order to make our business grow.
My biz partner and I owe a one truck / trailer operation. He's the one with trucking experience (over 20 years) and I handle the admin side of things. We have survived for about 6 months and now have sufficient capital to go on and purchase another tractor trailer. I know a one truck operation will make some profit, but the real growth opportunities come when you can add more trucks to the operation. We have our own authority, insurance and applicable permits.
Here's my question: how do we go about "adding" another truck and driver to our authority? I see two possible scenarios: 1) our small company buys the next tractor trailer and we puit it to work under our authority & permits, or 2) we sign on another O/O to work under our authority (and avoid the capital investment). Can anyone please give me insight as to what scenario would be best for a start up and the steps for doing each? Any feedback or info would be greatly appreciated. Thanks.

 

Congratulations on being a successful operation! That's nothing easy to do in this economy. I'm a one truck operation as well, with no partners, just me. At one time I considered signing on another truck where the guy could run under my Authority and such. As I dug deeper, I decided that I wasn't comfortable with the situation. It was just the thought of losing some control. Somebody running under my numbers can really mess things up for me with violations, accidents, etc.

 

Unless you have a bunch of shippers in your pocket your O/O isn't going to stay long getting 75% or crap off the load boards.

I would buy another truck and trailer and pray to God you can get a good driver to put in the seat.

 

There are pros and cons to hiring drivers or owner operators. With only 6 months experience you will likely find it easier to buy another truck and hire a driver than finding an owner operator. If you know some owner operators who might be willing to lease on then it could work. An owner operator will usually be more demanding than a company driver as far as rates are concerned.

It is difficult to find a good driver who is honest and will take care of your equipment. If you decide to go the driver route, then you need to keep a close eye on your equipment and his expenditures. I have had good and bad drivers. You should be prepared for your truck to sit part of the time due to not having a driver, unless you just want to put a body in your truck. I would suggest that you check out any potential driver carefully, and even then you will have one that slips through the cracks once in a while.

 

I was told on more than one occassion, when I start my trucking company to run under my own authority and not lease on. Reason, to cut out another mouth to feed. having to deal with a Broker may mean having to pay a commission, ok. Looking at Lease/Operator it not much more than bring you own truck to work and they call run the business. (contractor) a jobber who pays someone for professional service. It seems a lot of guys are turning to the contractor/lease option due to expensive fuel and operating cost. I have estimated about 50,000 USD working capital to invest (cost of truck,permits,taxes and fees , etc) in my own business to become an owner operater. It will take about two years to recover my investment at $1.25 to $1.35 CPM. and three years to pay off a 2007 -08 model Class 8 HD Condo Sleeper with less than 500K.

 

I would not say that it is always best to start with your own authority. If you have never been in business, have limited working capital, marginal or limited credit and no contacts, then you are probably better off to lease to another carrier. While you are leased you should learn all you can about this business as you save your money. One advantage to leasing to another carrier is that you have a safety net. When you run your authority then there is no safety net. You are on your own.

I have known some who start out running their own authority. Most spend a lot of money on their own nickel learning this business. It takes time to learn the best freight lanes and make good contacts. Finding brokers or shippers who have good paying freight and pay their bills in a timely manner takes time. I have known a few who did start with their own authority and did all right. I started with my own authority, but did have driving and business experience. I also paid cash for my truck and trailer. It makes a huge difference when you start out with NO equipment payments. I also had my own customers and they paid me on delivery.

You can start out with limited capital and equipment payments. But all it will take is one major breakdown or expense and you are out of business. I am not trying to discourage you from getting your authority. I think it is the best way to go for many of us. On the other hand, I know owner operators who lease to other carriers and do as well as many with their own authority. One thing to keep in mind as you ponder which way you want to go is that not everyone who has their authority is successful. Not everyone who leases to a carrier is successful, either.

Some people will make more leasing to a carrier than they will running under their own authority. Some people would do better if they stayed a company driver rather than going out and buying a truck. Before doing anything you need to sit down and think about what you want to do. There is nothing wrong with staying a company driver. Some carriers pay well and have good benefits. There is something to be said for going home and not having to worry about doing maintenance or repairing the truck. Remember, when it is your truck, there is always something that needs to be done. I think that most drivers and soon to be drivers fantasize about owning their own truck. If some were honest, they probably made more as a company driver than owning their own truck. Some people are just not good managers. Some don't know how to budget and manage their money. Those are the ones who usually get suckered in with some lease purchase deal. Very few of them ever actually do well enough to own the truck. I have noticed that it is very difficult for some drivers to change their way of thinking from being an employee or driver to a business owner. Some never seem to make the transition.

It isn't uncommon for a driver with a couple of years experience to be earning $40-45,000+ per year.

There is nothing wrong with working with brokers. The way things have been heading, many shippers have turned over their logistics to third party logistics companies or brokers. Granted, some brokers can be sleezeballs, but there are others who are honest and can do a good job for you. There are a few brokers whom I will not do business because I don't care for the way in which they do business. A broker is a salesman. He finds and books loads and then finds trucks to haul the freight. That takes time and he deserves a fair commission. Notice that I said FAIR. If you want to spend the time calling shippers and developing your own base then it does take time that you could spend driving. You could hire a salesman to call on shippers for you, but you will need to pay him a commission or salary. Without several trucks it may not be worth it for him or you.

Some owner operators do a lot of complaining about brokers. You can hear them complaining about how cheap the rates are from brokers. Not all brokers have cheap rates. I have gotten some good rates from brokers. I have had to be home for the last several weeks so I have not been running. I usually don't discuss rates that I am getting or offered. But, I have been offered a number of loads paying $3/+mile the past 3 weeks that I have been home. I was offered two loads this week that paid $5/mile. All came from brokers. Those that paid $5/mile were not advertised or posted on any loadboard. They called me because of my past relationship with them. I really hated to turn down those two at $5/mile. There are plenty of loads that some are trying to move for $1.50 or less. I won't haul them, but they are around. You will likely not start out with top rates. I have worked hard to build a good reputation and have a good safety record with many years experience. It takes time to build a good reputation. It only takes one or two major errors to ruin it.

To be successful in this business you must be a good negotiator. Every load is a negotiation. When freight is tight and capacity is high then rates will be down and you may need to fight to get a decent rate. It is all part of the business. You mentioned getting $1.25-1.35/mile. You cannot afford to run a truck at those rates. Not with fuel running at or near $0.80/mile. By the time you add payments, maintenance, insurance and all the other costs associated in running a truck you simply cannot come out at those rates. And it is not necessary to run at those rates. One thing many forget about is deadhead miles. A 10% deadhead is very low. That also comes off the top.