What should be an owner operator net income per year?

Where stealing and fraud comes in is when a supplier undercuts knowing he will not provide the service that was promised. On the buy side it’s when the buyer doesn’t pay detention, short pays or doesn’t pay at all. I just got took for $18000 and the thiefs neighbors report no signs of suffering.

 

The real trick isn't to simply undercut your competition, but rather it's about doing a better job than they did for the same or less money. If you can offer a service that the competition can't, then you can charge more than the competition. That's how long lasting (and successful) business relationships are built. Mega carriers can beat most small carriers on price, but it usually comes with diminished service.

 

Unfortunately, because large carriers have tremendous capacity, shippers & receivers will tolerate a lot of diminished service. I've seen it from the inside looking out.

Times are good right now. What I'm fetching on the open market is sometimes up to 40% more than what I have been getting the past couple of years.

I provide top notch service to the brokers I service, 100% on-time pick & delivery with no issues. However, even at that, I'm a realist and know that the market can flip on a dime and the brokers who love dealing with me now, would most likely abandon me for $50 when times get tough again!

 

That's a healthy business attitude. The market can always change on short notice, so maximize profits and save while you can. Our ability to do better than the mega's can have a lot to do with the market we specialize in and our proximity to that market. The west coast for the most part has more smaller shippers. We can be much more flexible than the big guys dealing with special requests, and that gives us a leg up on the competition, especially if we can bypass brokers and deal direct with shippers. I love hauling freight from small DC's between central California and the PNW, and it's paying well right now. Even brokered loads heading north are regularly $4+ a mile.

 

Right, but those same $4+ loads were $2+ just early 2017. I know this lane like the back of my hand LOL.

The SB rates are about the same as they have been for 10 years now. Which is why I decided to stay out of SoCal as long as I can.

 

I stay out of SoCal too. I only go east or north from the bay area unless I'm bypassing LA for the southwest. LA is a hellhole and I avoid it like the plague.

 

Agreed. Top quality Customer service will always top cheap rates. My last carrier I drove for before being injured by a drunk driver ( 1999 - 2003 ) had rates as follows.

*$3.20 for a Flat/Step and 48' Dry Van plus FSC, hourly pay from time of appointment, basically ALL companies drivers and O/O's went on hourly AT APPOINTMENT TIME til loaded. Tarp pay covered tarping.
( Shipper signed off, with driver approval of "on time appoint", and shipper finish of loading )
Comp Drivers got Central States Teamster "based" ( not exactly ) hourly pay ( depending on years with company ) and O/O's received $70 or $75 if pulling Company Trailer, $95 if pulling their own. Unloading pay...if on time for delivery,, was same. Weather was put into equation for safety. Equipment failure was a Service Failure...deductions made. So Maintenance was a high priority. O/O's were considered Business Partners. Company drivers were considered as Liaisons for the company.

Mileage was zip to zip plus practical for a truck ( not a car ) with an added % tacked on....I can't recall the %. Delivery appts set in advance as usually many loads involve riggers, if problems/delays at shipper would cause even the slightest hint of a delay....consignee was notified immediately by customer service, and a new appt was figured out, this included the inputs of all drivers as well.

O/O's got 100% of Tarp pay with company trailer or their own ( Hourly ended when Tarping Began ) Drivers got 70% of Tarp charge.
*$125 minimum for a FB Tarp up to $175 depending on need. $200 mini if a Step Deck ordered.

*OD/OW ( ex permits, escorts, etc..) was mini $3.80 and up, plus loading pay (depending on size/weight )
If escorts were late....they were docked$$ and that was passed on to O/O's as a form of detention pay.
If tarp ordered, it was over $200 easy. Lots of extra variables O/O's most always pulled these.

*Flex Van/curtain side ordered was mini $3.60 plus loading pay.
*DD was mini $3.60 and up plus loading pay, lots of variables, O/O's mostly pulled these.

Just a sample....pretty sure I missed some things. Health Insurance was 100% Paid...it was "based" on what Central States teamsters contract was....They were/are NOT a union house.

They never wanted for drivers, never wanted for O/O's, never advertised, no recruiting office,
Expectations of company..... if you weren't 15 minutes early punching in ( company), you were late. Not OFFICIALLY Late, it was a mindset.
It was a non forced dispatch, loads were often planned days if not weeks in advance... So O/O could choose his work, how much, how little, though always bearing in mind The owner operator was there to service the company, and the company was there to service the customer.
Company drivers on a bid board.

Bottom line: They Sold SERVICE, not merely a truck with a warm body.

I drove a 48' spread axle Dry Van. Mostly hauling Robots/Robotics/CNC machines that could bump a dock. Company Driver. In 1999 I started at around .45ish??? and around $16.75 hr +/- a little....
In 2003 I was at .5225 and a little of $18.50 on hourly. Fast forward 15 years, I'm at .51 and $15 detention after 2 hours :-/
3 year minimum superior experience. No longer have company Vans, Have O/O's with own 48' spreads. No exceptions made on experience. O/O's most always introduced to management by current O/O's...birds of a feather flock together! Good drivers hang with Good drivers.... whiners hang with whiners at truck stops or shippers. Exceptional drivers go the extra mile.... whiners don't.

 

Yeah, it was so much easier for me to keep my mouth shut, or frustration level to practically nil, if shipper/receiver were screwing around while I was waiting on hourly pay from the first minute.....

 

I forgot to mention in an above post.... O/O's earned 72% of line haul with Company trailer, and if I recall correctly, it was 77.5% with their own trailer. Though the O/O could drop their trailer in the company yard, and use a company trailer for a load...at 72%. Example, an O/O leased on with a SD, but a nice DD load was available....they were more than welcome to use the DD...they weren't stuck hauling only FB/SD freight. Except a Dry Van O/O....unless the O/O had minimun 3 years current FB experience as well....
And the company provided just about every type of Back office support they could for the O/O's as well.... It was just part of the package/contract. I suppose an Owner could opt out....
I had serious aspirations of becoming a Partner with them, but life threw a curve ball.... maybe in 18 more months....