Taking the plunge. My journey as an O/O.

First rule of owning your own truck.

Do not chase miles ever……. The less miles the better.

 

Hmm. I can see where some folks might like that approach, but lots of short trips has it's own drawbacks. Higher deadhead%. More time at shippers and receivers. More maneuvering in yards with moon craters and speedbumps. More low temperature exhaust to clog up dpf filters.

While I am pretty confident that a driver with good hustle can probably make more money on short runs, the difference might not be as big as many think.

I will admit to personal bias here. I actually enjoy driving, so a 2500+ mile load makes me very happy.

 

70,000 miles X $3 a mile all miles
Or
110,000 miles x $1,79 a mile all miles

I’m pretty sure I know which one wins out

 

My personal opinion is this.
Rates might be good or bad but if haul a van, anything less than 100 000 miles per year might be a shortcoming.
That's the workload which a owner operator in his prime should be able to perform, unless he is already in a slow down mode e.g. a few years before retirement, truck / trailer paid for, $100 000 in a business bank account, no mortgage and kids on their own, etc.

1. if rates are good, you did not work enough to take advantage of good market
2. if rate are bad, you did not work enough to generate enough revenue to make ends meet.
3. unless, you worked at a double pace when the rates were good but then it means way more than 100 000 miles a year. so that you can slow down in times of cheap rates.

Why 100 000 miles? I find it balanced right for someone who wants to work hard enough and not to sacrifice too much of his private/family life. It allows enough home time and enough earnings on average market. But it is my personal take....It is equivalent/ or can be translated to 40 hour per week on a stationary job for someone who is employed as full time.

In other words, whether it is a van, reefer or flatbed, I'd still be trying to run as much to maximize revenue.

 

I’ve only been to 1 Auction, Taylor Martin. Peoria IL. 2004. Almost everything sold high. The few very nice units that stood out, went real high. Everyone wants the jewel. I sold a 2003 Wabash Trailer at the same auction, in 2009. It sold for 13,500. About $3500 more than I had expected. I paid $4500 cash for it, when I bought my Truck for $30k. Net cost for Truck was less than $22k. I was a happy camper. Surprised too, as they had hundreds of fleet Trailers.

 

Sounds about right to me. I always figured 2300 miles a week for 48 weeks, to make a steady living. Always beat the miles per week. Always worked less than 48 weeks. Often 40 weeks and 2600-2700 avg. per week. 2500 miles per week, or 100k per year, working 40 weeks seems ideal. Taking a month off at Christmas and a month off in summer, and leaving the last 4 weeks for slow weeks and downtime.

 

I think it will payoff. The auctioneer usually makes a quick statement about the equipment. A detailed list of recent repairs, will likely stir a interest. From what I’ve seen, everyone at the auctions there to buy. Makes it tough sometimes to get a good deal. The ones that take the time to research yours, will be ready to bid. Once the bidding gets going, it ends higher than anyone had planned. You should try to be in attendance for the thrill of it all. What you going to do with all that money? Look at us as a Bonus!! Lol.

 

All depends on what you want to do. I pull a dry van, because I prefer to Drive a few more miles, than be Tarping or waiting on produce in the field, or wasting time with Food warehouses. The killer when leased by the mile, is short trips. Even on a sliding pay scale, it’s peanuts compared to what short trips pay. All per mile pay adds up. Making an extra .50-.60 pm. Pays for fuel, or doubles your paycheck, however you want to look at it. $1.60 vs. $2.00 for all miles. Makes for an extra $4000 per mo. running 2500 miles a week. That’s 2 weeks off at home, or $40k more per yr. Depending on your priorities.

 

Okay, I've been putting off recap posts for a while now, but I don't want to wait until the truck I dropped off at Ritchie Brothers finally sells (auction at end of September.)

So, first recap post is ...

Some things I can look back at, which I would do differently the next time around.

1. Never buy a modern used truck from a company that does not have APU's on every unit. Why? Because using the primary engine for sleeper cooling means that you are buying a truck which has had a great deal of low temperature exhaust put through the DPF system, as well as a lot more starting activity if the truck was an opti-idle truck. DPF systems degrade faster if they filter more low temperature exhaust, and lots of extra engine starting increases the amount of low-lubrication engine wear. Are these critical, horrible wear issues? No, but if you can avoid them, then avoid them. My DPF system failed under warranty at 499700 miles. 300 more miles and I would have paid about 12k for a new One-Box DPF system, parts & labor.

2. Try to find out what the oil change interval is at a company before you buy a used truck from them. Some companies are starting to do truly stupidly excessive mileage between oil changes. For example, in my current Crete Carrier company truck, the oil change interval is planned for 75k miles with 10w30 semi-synthetic fuel. The truck I'm in isn't my problem to maintain, so I don't care, but I #### well will not even think about buying this truck or any other from Crete again unless they start maintaining their trucks better. My cracked head before 600k miles in the truck I bought from Crete and ran for 2.5 years might have been the result of poor oil condition earlier in the truck's service life, leading to heat stress weakening the head.

3. No smoking gun here in either case, but definitely reasonable suspicions about mega-fleet maintenance shortcomings leading to large problems in their sold-off vehicles. The biggest problem with modern trucks that you will NOT be able to avoid is this: Modern trucks are designed to give about 500k miles of good service, then rapidly degrade. That's why mega companies buy them, run them 400k or so miles, then sell them to suckers like us.

4. If you do buy a used truck and plan on operating it for long miles after the warranty is done, it would be a very good idea to locate a local shop near where you take home time. Try to find something between a Dealership and a shadetree mechanic. After the warranty is done, it is less important to have a receipt trail, but if you get an engine rebuild, or other major work done that has a warranty or guarantee, you will want records of maintenance performed or that warranty might be voided. TruNorth, the after market scam/warranty company, tried their best to avoid paying anything for an engine rebuild until I was able to prove with receipts that I had been changing oil regularly.

5. Speaking about a warranty. Never get a third party warranty. Ever. If you get an opportunity to extend a manufacturer warranty or a warranty on a engine or other major component, THOSE might be worth buying. Maybe. Major name brand manufacturers tend to want to protect their names as well as their bottom line. Third party warranty companies don't care about anything other than using maximum sleeze to generate maximum profit. Third party warranty insurance is mostly a scam, and their contracts are carefully worded in a way that will leave you holding the bag for most of the cost of many major repairs, and if you spend a lot of time fighting them about coverage, that's lost time and money too. I spend 33 days in a hotel in south Dallas learning that when I needed an engine rebuild after a cracked head. Ended up also needing sleeves and piston kits as well because the cracked head cascaded to wear in a cylinder, but TruNorth refused to have anything to do with even part of the cylinder repairs, even after the shop very clearly showed how the cracked head caused the cylinder damage.

So, what would I do the next time around, if I were able to go back in time three years?

1. Buy a used truck from an OTR company that puts APU's on all trucks.
2. Try to use forums and real life conversations with experienced drivers to get a sense of how well maintained a company's trucks are before you buy from them.
3. Try to find a truck with less than 400k miles, and at least 100k miles remaining on manufacturer's warranty. You can sometimes find them as low as 350k miles, but anything below that and you might want to pay a real diesel mechanic a couple hundred bucks to go with you to look over the truck, because early 'retirement' of a truck likely means the truck has... issues.
4. The older a modern truck is, the more problems it will have. Period. Find someplace reliable to do service for rates lower than dealership service rates. Consider avoiding OTR and staying regional or local after the truck goes a couple hundred thousand miles past manufacturer warranty.
5. Do not buy any extra warranty that is not a truck manufacturer extended warranty, or a major component manufacturer warranty. You might get 'lucky' and the purchase would be worth it, but I have yet to ever run into a driver that was happy or even moderately satisfied with the coverage provided by a third-party warranty. It's not just the hard currency cost of the repairs compared to the cost of the warranty. You have to consider the 'real cost' of the warranty. I will not get into real costs here, but if you are not familiar with that term, you best learn it, and understand it before you even think about becoming an o/o.

Next recap post coming shortly.

 

Okay, the next thing I want to discuss is goals, expectations, and understanding what you are getting into if you go the route of an o/o driver with a mega company.

There are many different business models out there for companies to hire o/o's under their authority. I only have experience with Crete Carrier's program.

Before I say anything else, let's be clear here. Crete Carrier as a company is not interested in your success, even though the people you interact with are generally nice enough. The Crete Carrier o/o system is simply a risk and cost mitigation program primarily intended to allow them to sell their old trucks and potentially move freight with experienced drivers in older trucks for less risk.

Crete offers no truck leasing program, and does not allow new truck financing through their associated truck loan program. You either buy a used truck from them, or bring in your own truck that is either owned outright by you, or financed elsewhere. I am not sure if they will allow a o/o with a new (or even used) truck financed elsewhere to participate in the company insurance system - the truck financing company might also have issues with Crete Carrier as an insurer. Not sure how that would work. It's research for you if you want to follow up on it.

That said, Crete is a very good place for an o/o to learn two critical things. First, do you have the work ethic to keep the left door closed and roll miles, and second, do you really want to be an o/o? While buying a @ 50k used truck to learn these things might seem expensive, buying a @150k new truck to learn the same things somewhere else could potentially be even more expensive.

While you are testing yourself to see if you have what it takes to do the job without someone telling you what to do, and if you even WANT to be responsible for all the decisions, Crete offers an excellent set of o/o training wheels.

If you are already a Crete company driver, you can transition from being a Crete company driver to being a Crete o/o and maintain several important company benefits. Firstly, you keep access to Crete's company healthcare plan if you want it, and it's a pretty solid plan. Secondly, you keep (and continue to accrue) company tenure. I worked 1.5 years as a company driver, 2.5 as a o/o, and am now a company driver again, and my effective hire date is when I was first hired as a company driver. This is handy if you decide to return to being a company driver, as several aspects of pay at Crete are impacted by tenure. Profit sharing and retirement Vesting, for example, as well as CPM pay.

Crete has an arrangement with ATBS (accounting company) to provide accounting and tax preparation services for drivers. They will send a lot of your financial details to ATBS so you don't have to. Settlements, expense breakdowns of insurance, etc.

Crete allows access to their discounts for fuel, and also for parts & service at most dealerships and some other shops. To access those discounts you have to pay for the services with the Crete maintenance account that they deduct from your settlements. If your truck is financed by Crete, they require you pay 15 CPM into a maintenance account. That account requirement ends when the loan is paid off. There is an elective maintenance account that can also be set up, either in addition to the mandatory account while a loan is active, or as a primary maintenance account after the mandatory account is closed when a Crete loan is paid down. There are some pretty reasonable savings to be had this way.

Crete also pays for tolls, reefer washouts, and deadhead miles for their o/o's, as well as 100% of FSC.

All that said, Crete is a place to LEARN, not a place to EARN.

The CPM rates offered by Crete are low for o/o. Not low enough to prevent a person in good financial condition to live on comfortably, but nothing like what you can earn at a company that actually caters to o/o's.

Do NOT expect to TAKE HOME as much money as an o/o with Crete as you would as a company driver. If you go into the Crete o/o program expecting to take home 60k per year or more to the house, you're going to be sorely disappointed. Expect to take 25-40k per year home out of 140-170k gross. If you have a really solid truck, a good, low cost shop, keep the left door closed, and avoid needless expenses to keep the truck pretty, you might improve significantly on that, but I don't see anyone clearing much more than that at Crete rates. Even after you pay off the truck note, it's likely your maintanence on a paid-off truck will eat most of what you save on truck payments, though there might be a sweet spot for profit between paying off the truck, and the truck really starting to fall apart.

Do not expect to be able to take off as much time as some of the Super Truckers you see talking about working nine months out of the year and sitting at the house through the winter. Crete rates (and most other mega o/o or lease programs) being what they are, you're going to have to keep the left door closed That said, after you prove to yourself that you have the drive (pun definitely intended) to do the job as an o/o, then after you take off the o/o training wheels and leave Crete (or wherever), you might find a company that is a good place to earn, since you've already done a good bit of learning. Maybe then you can be more picky about when you work. However, always remember that a lot of these folks taking off months at a time are in seasonal specialties. Even the guys that are o/o in dry van and reefer haulage and claim to take whole months off in the winter likely work their ##### off through the rest of the year to allow themselves to take a winter vacation. I'm sure some of them really have found niche work that allows them incredible rates, but don't count on finding out exactly how they do it, because in at least some cases, it's based on friends & family, favors, etc.

Once your truck gets past the manufacturer's warranty, be ready for extended downtime on a fairly regular basis. Try to keep an eye on the potential issues and get them addressed while you are at home before they fail on you. Personally, until my truck hit over 700k miles, I rarely lost time to repairs while on the road due to staying out 6-8 weeks at a time, then putting the truck in the shop for a laundry list of developing issues for a week to 10 days of home time.

As a modern truck gets older, it will get harder to stay ahead of problems because the problems will start getting weirder as wiring harnesses, relays, and other electronics start failing. It's normally pretty easy to tell if your clutch is getting close to failing, but your motor control circuits or oxidized wiring harness connections could go from full function to total failure in one pothole. Again, the older a modern truck is, the closer you want to keep it to somewhere you can get it fixed at a reasonable cost.