From Company Truck Driver To Owner Operator Questions

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'm a new driver few month and consider moving to become owner operator. I will gladly appreciate some comments advice help, thank you.

Sure

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.

Why do you think you will have better cash flow as an O/O? Everything you make as a business owner is taxed 35% Every expense that goes in to that truck comes out of your wallet. Plenty of companies allow pets, people, and route preferences.

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.

It will be your truck with 600K miles on it and endless repairs.

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

Payment free, but let's consider Broker's Cut, taxes, maintenance, tolls, insurance, tags, plates, fuel, administration fees. etc etc etc. Speaking of retirement, you better hoped you put money in to social security during your O/O experience or your not going to have a retirement.

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

How you going to buy your first tank of fuel?

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

You heard wrong. O/O's are forced to drive more many times because of infinite variables they didn't research before choosing to be O/O's

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

Sounds about right

I figured out that there is very little risk

You figured wrong. Look up statistics of O/O's bankruptcy rates. Nothing you've said so far indicates you have any business background, financial stability, or transportation experience. You think you are going to be that lottery winner that beats the odds?

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.

The rest of these questions will be answered by your time on the road, so we'll just leave it at that. Get your experience, save your money, do extensive research before getting involved in any business venture.

Thank you all again for the input. I'm start to rethink about it.

Ride2BFree proposes:

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 ?

Absolutely! Maybe 2,000,000 miles. But to be honest, it takes some tight financial work to keep money in the bank for engine parts, maintenance, and especially tires. And the major companies like to retire their trucks at around 500,000 miles. And, just like your personal vehicle that you have the title to, after a while you begin making "quarterly car payments" when you need to replace brakes or window motors or water pumps, not to speak of the tires.

You suggest 4 days out of 4 weeks is 10%. Well, 4 weeks is 28 days, so it's 4 out of 28, actually. That's 14%. At any rate, consider this: a company driver off for four days does not get paid for those four days. That's it. If an O-O stops driving for 4 days, that's 4 days he's not making money to pay his lease payment or insurance. He needs to make that up on the other days.

Ride2B, seriously, be our guest and go lease or purchase a truck. It's your money and your life. You just may be happy with the whole deal.

Let me ask you this: How long have you been trucking? It's one thing to imagine that wonderful world where properly maintained trucks will roll for a million miles and still make money for you. It's another to have the experience of driving in the business, dealing with warehouses, wait time and time off, then with several years of learning how trucking works, go ahead and invest your money, your sweat and life. You just might find the bottom line as an O-O is very close to the bottom line of a company driver.

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 wonder if there are any successful O/O and/or Lease Operators in this forum. Seems the veteran responses are anti O/O slash Lease Ops. If there are any successful O/Os or Lease Ops on here....do you consider yourself successful? If so what suggestions do you have for those who desire to do the same?

~scott

I wonder if there are any successful O/O and/or Lease Operators in this forum. Seems the veteran responses are anti O/O slash Lease Ops. If there are any successful O/Os or Lease Ops on here....do you consider yourself successful? If so what suggestions do you have for those who desire to do the same?

~scott

Feel free to hit me up, 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. My suggestion is to drive at least 1 Year minimum to see if this is what you really wan't and learn the basics of trucking. Also 90% if what Truckers tell you is "BS" there is always more to the story, they just ain't telling because then the Story wouldn't be as juicy. I personally avoid debating such subjects on this Forum but people sometimes hit me up with questions via Email.

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.

Thanks you all again for the info and support.

I understand that there are many type of O/O. Some work with brokers and they need to take care of all their permits and they really run an independent business with doing their own marketing and such.

And another group is the one leasing from the company like swift and then the company take care of everything for them and support them and they even get the datacomm card so actually the company advance them the gas money and subtract it from their settlement amount.

I did a little money comparison to see what works better.

Comparison company driver vs. O/O

Comp. Drvr. O/O

Income per mile: 0.36 $. 1.12$

2700 miles per Week average. 972$. 3024$

First 2 years cdl School reimbursement 37.50$

Fuel. 6.5 mpg. 2.50$ per gallon. 1038$

Weekly payment for lease Including all permits ins Qualcomm. 911$

Sub total. 1009.50. 1075.

Other benefits and expenses.

Company driver: get a basic free life ins. 1 week a year paid vacation Lower cost health ins plan. There is no company contributions to Drivers 401k.

O/O benefits: can choose a nicer truck color. Say no to jobs that he must take to keep up the pmts. paid for other repairs the truck might have Pay for tires brakes oil and more.

Well it didn't came up straight but I'm sure you can figure it out.

The only time that the O/O coming ahead is if he becomes a mentor Then for 4 weeks he is getting a team driver for free. Because he get paid for miles the student is doing and company pay the student driver by the hour. I drove about 10,000 miles with my mentor in 5 weeks.

Your the exact reason why I keep my conversations away from some of you, if individuals wanna ask questions in private I'm willing to discuss them to the best I can. I'm just sick and tired of being trolled by people but willing to help people still. I just wish to not deal with all the negativity. I personally didn't do anything to you. If a person is asking for some input and I'm willing to give some input to him that is all, is it wrong of me to engage in a conversation with him in private to avoid being ridiculed.

You my friend are the definition of an Online Bully!