From Company Truck Driver To Owner Operator Questions

I'm a new driver few month and consider moving to become owner operator. I will gladly appreciate some comments advice help, thank you. 1. I realize owner op might have a better cash flow but after considering paying more in health insurance taxe at year end lost of paid vacation school reimbursement company life insurance financially for the short run it does not look so much better. But the advantages are I can get a dog and a friend with me when I choose. I can choose my own route.

And my long term plan is to lease a truck from the company after 3 years to buy the truck they will finance so in 5 years it will be paid off and it will be my truck.

Then working with the truck for another 3-5 years payment free So I will be able to save for my retirement. Maybe.

I'm 59 and broke now with nothing set aside.

I heard that owner op are getting more miles than company drivers.

I'm single so I need home time to see my daughter once every 3-4 month.

I figured out that there is very little risk First you can any time walk away from the lease it's like a month to month lease actually second if you don't get enough miles from them you can go with the truck to other companies and as long as you make the payments they have no problem with that.

Do other company take owner op if the truck is not leased through them?

My other question is what the best truck to buy Peterbilt? Freight liner? Ken worth?

Other?

I like the idea of the automatic freight liner, does any one had an experience with it?

Is it makes much of a difference if I plan to keep the truck for many years to choose Cummins vs. Detroit Diesel engine?

Thanks again for your help.

But the advantages are I can get a dog and a friend with me when I choose. I can choose my own route.

You can already do all of that stuff without starting your own trucking business.

1) Most companies have a rider policy where you can bring people with you.

2) We have a growing List of Trucking Companies That Allow Pets so check out that link

3) You can choose your own route in a company truck to some degree. As long as you don't go a bunch of miles out of route you can make some changes to the company's routing. It comes down to the fact that profit margins are very slim and you have to use as little fuel as possible. So as a lease driver or owner operator you're going to have to monitor your fuel usage closely and therefore follow the same routes company drivers are following anyhow. You won't have the time or the money to take huge out-of-route joyrides.

I heard that owner op are getting more miles than company drivers

As a company driver I pretty much always maxed out my logbook hours. I had a goal of about 3,000-3,200 miles per week. Now I was using paper logs so I could drive quite a bit more than that if I wanted to. But the problem was that anything more than that really isn't sustainable. You can only drive so many miles a week before you're completely wiped out. If you get to that level of exhaustion consistently the effects build up and wear you down.

So whether you're a company driver or an O/O or lease driver you can only consistently drive about what the logbook rules allow. And as a company driver I was almost always able to get all the miles I could stand. You might hit a slowdown in freight from time to time for a short time, but overall you should be able to max out on the miles you turn as a company driver.

I figured out that there is very little risk

So it seems that the company is giving you the opportunity to own or lease a truck from them with very little risk or commitment but huge profit opportunities above what you would make as a company driver? And yet you'll be driving pretty much the same truck on the same highways burning the same fuel under the same State and Federal laws whether you are a company driver or a lease driver. Interesting. So that means if you're a lease driver then the company would be making less money from each load you hauled and you would be making more than a company driver would be, right?

Why would the company do that? Why would someone stand up in a meeting and say, " Hey, I know we're already paying Ride2BFree decent money as a company driver but why don't we convince him to lease that truck from us so we can pay him even more!!!"

Does that sound like something a corporation would do? If there's so much money to be made owning the truck and hauling freight then why don't they want to continue to own their own trucks and haul freight with them? Why would they want you to start your own company - just so they can pay you more? Why don't they just pay you more and keep you as a company driver?

Corporations build their strategies around the goal of making more money. Simple as that. So if a corporation wants you to lease a truck from them it must be because they feel that's the better profit opportunity for the corporation, not necessarily for you. If a corporation is doing something and you can't figure out how they make more money by doing it then keep investigating it until you figure it out. Because they only do something if they have to by law or if it makes them more money somehow. Unless they're an actual charity they're not doing it because they want you to have more money so they can have less.

Please, please, please think hard about your dream of owning the truck.

We no longer live in the world I grew up in. It used to be owning a house was what everyone wanted and if you could own your own business, well that was the ultimate American Dream. Now there are so many government regs & requirements most small businesses can't survive. Many people don't want houses with big yards cause it's too much work, cuts into their weekend social life. But I digress.

Why do you think companies sell their used trucks @ 5yrs? Could it be they've gotten most of the depreciation and the big repair bills are about to start?

O/O might be the way to go but just to own the truck by the time stuff starts breaking down might not be the best reason. As for miles, I average 30,000 per quarter and get home 5 days per month. I doubt many O/O's are doing much better while using e logs.

I'm also learning different companies have very different O/O programs and some are better than others.

Good luck. I wish you great success and I hope you'll share that success here.

I understand all your points Brett, But then how come there are so many O/O out there?

The better question is how come there are far fewer owner operators now than in the past? There will always be owner operators. But just because something exists doesn't mean it's good to be one (think dog turds).

Even when articles try to put a spin on "improving conditions" the end result, profits, are still poor. This is from an article called Is the owner-operator a dying breed? from 2013:

...citing data presented by ATBS, the largest owner-operator financial services provider. ATBS records showed how, over the last 10 years, the owner-operator environment had mostly improved:

• Much shorter length of haul and much more home time.
• Net income per mile rising 3.8 percent each year, compared to 2.5 percent annual inflation.
• On the down side, due to total miles dropping by a fifth, only 1 percent annual gain in total income, well below inflation.

Wow, things were looking up there for a minute - better home time, shorter length of haul, net income per mile rising each year. If only they could have left out that last part it would have been great:

"total miles dropping by a fifth, only 1 percent annual gain in total income, well below inflation"

that means you're making less each year when adjusted for inflation. That's sad.

What attract me is the ability to own my truck within a few years.

Remember, a truck is a depreciating asset. It's worth less each year. As time goes on you'll have to spend more on maintenance costs to keep the truck on the road while the value of the asset continues to drop. So you won't have a truck payment, but you'll be rebuilding an engine, replacing rear ends, and rebuilding suspension parts. Not only is that expensive work, but it's a lot of down time meaning a lot of lost revenue.

And also don't forget that they keep making the emissions standards more strict. You can't just keep rebuilding an old engine anymore like you used to. You have to keep up with the emissions standards and retrofitting an old engine with new emissions controls can be really expensive.

I spoke to a driver that he is an O/O with swift he says he was leasing the truck for 5 years and with the money he put aside for maintenance that he never used he just paid for it in cash and now he is own outright is own truck.

Oh that's awesome. So did he ever tell you what he actually paid in the end for that truck and how much he put into it over the years? When you consider all of the payments, finance charges, and maintenance I'd love to know what that truck actually cost him and what he has now. How many miles on it? What's the resale value?

A lot of people think the Holy Grail of business ownership, and truck ownership in particular, is eliminating payments. They think if they can own equipment outright instead of making payments on it they'll be ahead of the game. If that's the case then why do all of the largest carriers out there turn in their trucks every 3 to 5 years? If it's such an obvious business victory to be out from under that debt then why don't they just keep their trucks for 20 or 30 years and keep rebuilding them?

Every time you come up with what you feel is a winning business strategy you have to ask yourself, "If it's that simple and obvious then why isn't everyone doing it and getting rich in the process?"

I personally avoid debating such subjects on this Forum but people sometimes hit me up with questions via Email.

Ya know guys it's really nice the way Hammertime is willing to share his knowledge with you under the cover of darkness. I want you to take note that neither Brett nor I, or any of the other regular contributors to this forum have tried to lure you off into private conversations. In fact one of the responses I often give to folks who are sending me private messages is let's discuss this in the forum so that others can benefit from the conversation. ( I don't do this all the time, but it is often my response) The point of the forum is to help educate and inform not only the person inquiring specifically, but the answers benefit all who come across the information at a later date also. We know that our facts can stand on their own, we are not afraid of being scrutinized.

I consider myself a Successful O/O it took a bit of research but I feel like I'm doing way better than I was a Company Driver.

That's really nice that you "feel" that way, and as a former business owner and entrepreneur, I hope that you are doing well. I loved all my years as an independent business owner - there's really nothing like it. The problem I have with that statement is that every owner operator I have come across felt the same way... even the ones whose credit cards were being denied ahead of me at the fuel desk for their fuel purchase. (multiple times I have witnessed this scenario) Just about the only owner operator I've interacted with who really seemed to understand the realities of the high revenue, low profit margin business was this guy in Texas who aptly named his business according to what was really happening on the books. Here's a shot of his truck... please notice how he named his business.

I've also found it intriguing that we don't have a lot of our lease/op or owner/op guys in these discussions - they are here in the forum, I know many of them. If they were making considerably more than the company drivers I think they would share it with you all... and the truth is I am all for making the most you can at this. When somebody has a good plan, I'm all ears. But it has to be good, because we understand the business aspects of all this and there are no shortcuts to the top - that is why we challenge any unrealistic projections that people try to throw out in here. The reason we do it in open discussions within the forum is because we want to help you succeed.

Now, I have no doubt Hammertime will get some e-mails from some of you, and you are certainly free to do just that, but when you need some good solid advice from people who have spent years in the business world and have a grasp on much of it's challenges you can always depend on an honest and open discussion right here in this forum.

Hammertime, I really am glad that you "feel" you are doing well, but like I said all the owner operators I come across "feel" that way. There is such a huge difference in the cash flow that an owner operator experiences it really does seem like you are making money hand over fist at first. The real test of your business plan and strategy will be time. If you are not over the five year hump as an owner operator, I personally wouldn't give you much credence in any kind of discussion. You simply have not gotten to taste the realities of it just yet. We had a new owner operator in here not too long ago, a long time member in our forum. He claimed to be making five or six times as much as he was as a company driver! That is impossible, and I know it to be so, he just hadn't gone far enough into it yet to realize what it takes to pull this off.

It really take some background in accounting to understand how business numbers work. Bud, one of our lease/operators in the forum, has the benefit of the accounting system at Prime, the company he leases from. He reported recently that he was doing about 2.5 percent better than the company drivers. I was extremely grateful he shared those numbers with us because that is so precisely on the mark of what we've been telling people that you can expect to make if you are really fortunate, and really good at this.

I don't post often, because I'm spending time searching thru the thousands of posts because the site is not "search friendly."

hmmmmm......sorry about that. Have you tried using the search engine at the top of every page? That thing seems search friendly. We also have this forum broken down by tag and you can find the topic tags here - Topics By Tag.

You my friend are the definition of an Online Bully!

Still waiting for examples of Old School being an online bully.

I consider myself a Successful O/O it took a bit of research but I feel like I'm doing way better than I was a Company Driver

To be honest, when an experienced businessman hears someone describe their business prospects using terms like "I consider myself" and "I feel like" without any numbers of any sort it's a gigantic red flag. Businesses are evaluated in terms of hardcore facts and bottom line numbers, not feelings and instincts.

I personally avoid debating such subjects on this Forum but people sometimes hit me up with questions via Email.

And that's really shady. If you enjoy discussing your business with people, why wouldn't you do it here for all of us to see? After all, the peoples are saying:

I do wish though that there was a section to add positive light for someone who has done the research, put in the time and really wants to make a go of it.

Me too! I've been clamoring for this for years. I've asked lease drivers and owner operators to come here and discuss their successes with us. I've asked them to share their numbers. I've begged them to share their secrets. But as you're seeing, we never get anything of the sort. We get a lot of people who are a few months into leasing or owning their truck coming in here telling us how they're setting the world on fire with "piles of cash" and "a river of money". In fact, those are expressions people have actually used to describe their success after only a few months. But somehow every single last one of them disappears shortly thereafter and never returns. What happens to them? Where do they go? I mean, if you're super successful in business after only a few months imagine how successful they should be after a couple of years, right? And yet they never return with their success stories.

Here's a good example: Leasing A Truck: My Journey.

He started out with a few numbers at the very start and then the updates stopped. That was a couple of months ago. What happened? I don't know. It's one of many mysterious vanishings.

One thing you guys have to realize is that Old School and I have both owned and operated businesses for many years. We love being in business and we'd love nothing more than to help others succeed in business. But you have to choose the business you enter into with tremendous care and caution. It's difficult to make a consistent long-term profit in any business. If there was easy money to be made competitors would quickly swoop in, undercut the ones making the big bucks, and before long the profits would be slim. There is no such thing as a gravy train in the business world.

But some businesses are far worse than others when it comes to profit margins, cash flow, and capital expenditures. The worst category of all is any business that would be considered a commodity, which basically means that only the price of the product or service matters. Trucking is one of those businesses. It's a commodity service. Nobody cares who hauls their freight. It doesn't matter how much chrome you have, what shade of red your truck is, how much power is under the hood, or how clever your company name is. All they care about is how cheap you can get their freight from point A to point B. Other examples of a commodity products would be gasoline and corn. An example of a commodity service would be airline tickets or oil changes.

Do you care what brand of gasoline you buy? Does it matter which farmer grew your corn? Do you really care which airline you fly with or who changes your oil?

No. It makes almost no difference whatsoever. All you care about with those products and services is getting the best price.

That's the way trucking is. Nobody cares who hauls their freight. They just want the best price they can get to move their products. When you have a situation like that there is no way for the business owner to differentiate himself. Therefore there is no way you can command a big, fat, juicy profit for your product or service. The only way you make the big bucks in business is by doing things that almost nobody else can do on your level. It's a matter of supply and demand. You have to be one of the few who can supply a product or service that is in great demand. That's where the big money is made.

If you wanted to make big money in a commodity business you'd have to scale it really big. You would never make a worthwhile profit by supplying a small quantity of a commoditized product or service. You can't just sell a little corn or gasoline and expect to get anywhere. You're not going to own one or two trucks and make very much. You have to sell a ton of any commoditized product or service to get anywhere and even then there's no guarantee you're going to make any profit at all. Just look at the balance sheet of publicly traded trucking companies.

Forgive my long winded preface to my question, but it is all important to the discussion. My question is: Did you come up with some sort of a figure for a "break even point", and if so was it anything similar to mine?

Of course, the reason I'm asking you this is because you made this statement:

Did the company driver thing for 2 months fully intending to gain some experience before buying my first. Couldn't take it, bought a cheap truck, got way too dirty making it right as possible(parts are reasonable, my time was free) bought a very serviceable trailer, found reasonable insurance and got my authority, done. 3 months in doing 2.06 ALL miles, maintainence account building and weaning off the spot market as I build contacts. Point is, it can be done, you will work twice as hard and personally I would not do it any other way.

Okay, so you admit that you are working "twice as hard." Yet you say you are getting $2.06 for all miles. If we use my calculations, and let's just round it off to $1.75 for a break even point. Then it looks to me that you are making around .31 cents a mile, which is comparable to, and in some cases less than a newly licensed company driver. Would you agree?

Please don't take offense and start accusing me of being a bully like some have done - I genuinely am interested in what the appeal is to you if those numbers are accurate. If there is a different appeal to you then that is all fine and good, but let's don't let it be thought of by the interested parties who are reading this stuff that it is because you are making a lot more money than a company driver.

That is why I made this statement:

I'm all for hard work and long hours, and brother, I know that is what it takes - I love working, but when I put in that kind of effort it needs to yield me a considerable difference in what the company drivers make. That is where it all breaks down for me.

I'm only trying to illustrate the fact that very few owner operators are out there making anything considerably more than a good company driver.

Uberhammer even thought it was the top 1% of all drivers - wow! that is a tough group to get into!

Now, if a guy wants to be an owner operator because he just enjoys hanging chrome all over his rig, and he likes to be "styling" as he rolls down the road, that is another thing all together, or even if he just wants to control where he runs, and when he goes home... I'll concede that too (although I pretty much control both of those things as a highly valued driver), but Cave Dweller, if you think you are going to make a lot more money as an owner operator could you share with us how your break even point is so much cheaper than mine was? Because every way I look at this scenario, that is the only way you can accomplish that feat.

I'll let the powers that be and a few other veterans on here to have run their own businesses in the past answer this at great length but you really really need to think about what you're doing leasing a truck from a company

I'll let the powers that be and a few other veterans on here to have run their own businesses in the past answer this at great length but you really really need to think about what you're doing leasing a truck from a company

I understand they charge more then if I'll try to get a loan by myself.

But I got no money to put down my credit is bad (I might have to go for the bankruptcy route. )

And there is the option of giving back the truck and becoming company driver again so I see a minimal risk.

Please tell me what I don't see. Is there other options for getting a truck?

But I got no money to put down my credit is bad (I might have to go for the bankruptcy route. )

Ride2BFree, I've been through a lot of experiences in my life, including the "bad credit" thing.

Why not stick with being a company driver for a couple of years, make yourself a goal of getting your credit re-established.

Prudence should dictate to you that if you are just about to need to declare bankruptcy, it is not the ideal time to try something like leasing a truck just so you can have your dog or your friend ride with you. If your current company doesn't let you have a rider or a pet, you can easily switch to another trucking company that will let you do those things.

Being steady at something for a few years could certainly help you get past your credit problems, then you can try and damage it again by leasing a truck.

But I got no money to put down my credit is bad (I might have to go for the bankruptcy route. )

Ride2BFree, I've been through a lot of experiences in my life, including the "bad credit" thing.

Why not stick with being a company driver for a couple of years, make yourself a goal of getting your credit re-established.

Prudence should dictate to you that if you are just about to need to declare bankruptcy, it is not the ideal time to try something like leasing a truck just so you can have your dog or your friend ride with you. If your current company doesn't let you have a rider or a pet, you can easily switch to another trucking company that will let you do those things.

Being steady at something for a few years could certainly help you get past your credit problems, then you can try and damage it again by leasing a truck.

Yes, in one way it makes sense. But when you a company driver they own the truck at the end.

Because my age I feel like the sooner I'll be able to own my truck I'll be able to save much more.

Now about damaging my credit again they say the truck lease does not go on my credit so I don't understand how can it damage it?

Appreciate your comment, it's not they I doubt you I just try to understand and learn things from other drivers experience.

But the advantages are I can get a dog and a friend with me when I choose. I can choose my own route.

You can already do all of that stuff without starting your own trucking business.

1) Most companies have a rider policy where you can bring people with you.

2) We have a growing List of Trucking Companies That Allow Pets so check out that link

3) You can choose your own route in a company truck to some degree. As long as you don't go a bunch of miles out of route you can make some changes to the company's routing. It comes down to the fact that profit margins are very slim and you have to use as little fuel as possible. So as a lease driver or owner operator you're going to have to monitor your fuel usage closely and therefore follow the same routes company drivers are following anyhow. You won't have the time or the money to take huge out-of-route joyrides.

I heard that owner op are getting more miles than company drivers

As a company driver I pretty much always maxed out my logbook hours. I had a goal of about 3,000-3,200 miles per week. Now I was using paper logs so I could drive quite a bit more than that if I wanted to. But the problem was that anything more than that really isn't sustainable. You can only drive so many miles a week before you're completely wiped out. If you get to that level of exhaustion consistently the effects build up and wear you down.

So whether you're a company driver or an O/O or lease driver you can only consistently drive about what the logbook rules allow. And as a company driver I was almost always able to get all the miles I could stand. You might hit a slowdown in freight from time to time for a short time, but overall you should be able to max out on the miles you turn as a company driver.

I figured out that there is very little risk

So it seems that the company is giving you the opportunity to own or lease a truck from them with very little risk or commitment but huge profit opportunities above what you would make as a company driver? And yet you'll be driving pretty much the same truck on the same highways burning the same fuel under the same State and Federal laws whether you are a company driver or a lease driver. Interesting. So that means if you're a lease driver then the company would be making less money from each load you hauled and you would be making more than a company driver would be, right?

Why would the company do that? Why would someone stand up in a meeting and say, " Hey, I know we're already paying Ride2BFree decent money as a company driver but why don't we convince him to lease that truck from us so we can pay him even more!!!"

Does that sound like something a corporation would do? If there's so much money to be made owning the truck and hauling freight then why don't they want to continue to own their own trucks and haul freight with them? Why would they want you to start your own company - just so they can pay you more? Why don't they just pay you more and keep you as a company driver?

Corporations build their strategies around the goal of making more money. Simple as that. So if a corporation wants you to lease a truck from them it must be because they feel that's the better profit opportunity for the corporation, not necessarily for you. If a corporation is doing something and you can't figure out how they make more money by doing it then keep investigating it until you figure it out. Because they only do something if they have to by law or if it makes them more money somehow. Unless they're an actual charity they're not doing it because they want you to have more money so they can have less.

Let me start by saying, I have not even close to the amount of years Brett or probably anyone else that's responded to your post has in trucking but if I were to looking into a lease, I would not be looking to lease from a company when a manufacture would lease me a tractor and cover the cost of labor and parts. Look up Jeffery L on youtube... watch a few of his videos and above all else know when you might be in over your head. The reason I say that is the same others have turned you away from lease operator route.

I understand all your points Brett, But then how come there are so many O/O out there?

My assumption is that O/O are working more and harder in order to keep make the payment the company is getting people that are more committed to the job. The company does not need to pay for fuel when comp driver let the truck run at night for the A/C. O/O Are looking better after the truck. Yes the company makes more profit on O/O because it's a financial profit on the lease of the truck. So I assumed because the money for the company is on the financial deal they can give the driver a little more on the hauling so it's kind of a win win for both.

I spoke to a driver that he is an O/O with swift he says he was leasing the truck for 5 years and with the money he put aside for maintenance that he never used he just paid for it in cash and now he is own outright is own truck.

In addition company trucks if we will assume that comp driver goes home for 4 days every 4 week so more then 10% of the time the truck is standing.

When company is giving their calculations about the difference between comp driver and O/O it show that for the short run its much better off to be a company driver.

What attract me is the ability to own my truck with in a few years.

So if I understand all of you guys correctly what you are saying is wait till you can buy your truck direct from a dealer not through the company (rip off) leasing deal.

So if someone can buy a truck without the company finance, is it better for him to be O/O then comp driver?

Thanks again to all

Please do one thing. Price an engine rebuild and tell me that your escrow account will cover it. Depending on the motor, a rebuild on these truck motors can set you back anywhere from $18,000 -$35,000. Also take into account that it could happen at any time you have that vehicle and chances are, the truck you're leasing won't be brand new and won't be under warranty. You have to look at the fact that by the time you're done with the lease, the well used truck you just purchased isn't worth all that much on resale and will probably be around the 800,000 mile mark when a lot of major purchases will be coming due in regards to parts.

Please do one thing. Price an engine rebuild and tell me that your escrow account will cover it. Depending on the motor, a rebuild on these truck motors can set you back anywhere from $18,000 -$35,000. Also take into account that it could happen at any time you have that vehicle and chances are, the truck you're leasing won't be brand new and won't be under warranty. You have to look at the fact that by the time you're done with the lease, the well used truck you just purchased isn't worth all that much on resale and will probably be around the 800,000 mile mark when a lot of major purchases will be coming due in regards to parts.

I will only lease a brand new truck and figured out 12,000 miles per month so after 3 years it's only 432,000 miles.

I was thinking that if a truck is well kept and maintain properly it can run for a 1,000,000 miles. Am I wrong ?