Questions/discussion About Going Owner/Operator

I will say in response to that, I would be running as a team with my significant other (we aren't technically married but might as well be) and we both are avid automotive enthusiasts and work on all our own vehicles, so we could do some stuff by ourselves I think as far as repairs and maintenance. Not sure if that would be enough to make going O/O a viable option for us, but it is something to consider anyway.

On another OOIDA Page Of Industry Facts they state:

Owner-Operators averaged net income is $39,927

Now that's what they made before taxes.

On the website for the Bureau of Labor Statistics they have a page titled Occupational Employment and Wages, May 2014 53-3032 Heavy and Tractor-Trailer Truck Drivers where it states:

Mean Annual Wage: $41,930

So when you're using verifiable data you'll see that owner operators make about the same as company drivers overall. When you ask an owner operator what they make they'll almost always give you their revenue figure or some relative statement like, "Way more than a company driver" or "Five times what I used to make as a company driver" - that kinda stuff.

Net income is after taxes. You're comparing o/o's net to the gross average of all truckers. Not an accurate comparison.

I've learned enough online and in person from drivers with actual experience as o/o's to know that hard working and smart o/o's can and do make more than company drivers. It's a business and like all types of business most who give it a try fail.

There is a greater range in income for o/o's than company drivers so those numbers don't reflect what is possible if you're among the best (most successful) o/o's.

I personally like being an O/O better than a company driver. I did "net" more money than I could make being a company driver, but my truck was paid for. But there are a ton of reasons that one could be better for you over the other. Are you a self motivated person? Are you an optimist, or a pessimist? Are you mechanically inclined? Do you have a rather significant emergency fund? What type of freight are you going to haul? What part of the country do you plan on running? You mentioned team, have you teamed with this person before? Will you be buying the truck and then paying your partner a set wage or cpm , or will you both go in on buying the truck together and sharing all expenses (that can get scary, especially if you find that you are no longer compatible as team drivers and decide to go your separate ways)?

Like I said, there are a ton of reasons why you should be an O/O and a ton more you shouldn't. They both come with their own problems. The one thing I have always suggested to someone that asked me if they should become an O/O is that I HIGHLY, HIGHLY, recommend you don't even consider becoming an O/O until you have a rather large emergency fund in place, especially if you are buying a used truck. For example, I bought a used fleet truck a few years ago and after paying cash for the truck I had just a tad over $18k for an emergency fund. The truck had around 492k on the odometer. So with the mileage and the emergency fund I thought I was golden and would be doing great. I knew I could expect some repairs, but my mistake was thinking that they would all happen over time...not all at once. I had a warranty on the engine, turbo, injectors, water pump, and transmission. On top of that, I thought I would be adding money weekly to my emergency fund as time went on...HA!...but you have to be up and running in order to be making money, which I wasn't.

Every time I had a breakdown it was something that was not covered by the warranty. I would call a shop (Freightliner, Detroit, mom 'n pop shops, etc.) to see if they could help me after I gave them the code or the symptoms. I quickly found out that the standard canned response was, "I don't know. The only thing we could do after you get it here is to hook it up to the computer." Then I would either have to limp it in or have it towed in to the closest shop. Then the fun begins. After you show up at the shop you get to hear them tell you how backed up they are and how many mechanics are out sick and on vacation and just quit without notice and that it probably won't be until tomorrow afternoon before they can get your truck in to hook it up to the computer. There is a key piece of information that they fail to include in that last statement though, which I will get to here in a second. So, you think, well, I have to have it looked at so...okay...go ahead and sign me up for tomorrow afternoon. So you sit the rest of the day and into the next day and they finally call you and tell you, "We hooked your truck up to the computer and it looks like your "such-and-such" part is bad and needs replaced." Okay, how long will that take? "Well, we don't have that part on hand so we will have to order it. It will take three days to get here, or you can pay for overnight shipping and we can have it by 10:00 AM tomorrow. However, here's the part they failed to mention that I warned you about. "Well, we are really backed up because we are down three mechanics because of vacation, sickness, etc., so, once we get the part, we won't be able to get your truck in the shop until the following day." UGHHH!!! Why didn't you mention that when I checked in?

Well, now you start thinking about it and you have already spent so much time sitting there that you might as well just bite the bullet and get it done. They know this and that's the reason they don't mention that there is a certain amount of time to "Look" at your truck and then another certain amount of time to order parts, because they never have the part you need, and then more time to get your truck back in the shop to fix it. They don't tell you this at check-in because they don't want you leaving and going somewhere else and figure that once you've wasted so much time there that you won't want to go somewhere else and risk starting all over again. Nobody wants to help you anymore because there is no money to be made by fixing your truck over the phone.

Anyway, every time I came out of the shop I was heading right back in for a completely different non-warranty breakdown. Only one time did I have a warranty related problem with the transmission and it was a big dollar repair...nearly three grand. Thank god for that warranty! However, I still lost eight days waiting for diagnosis, parts, more parts because they ordered, or were sent the wrong parts, and two days to tear down transmission, repair, and reassemble. Needless to say, I went through that emergency fund in six months. I was so discouraged by that time that I was at my limit for patience.

Some will say that because of electronic logging that you can't make money anymore. For me, I find that is false. Once I finally got all the bugs worked out of my truck I was running good and made great money - great for me anyway, but again, my truck was paid for.

Even after all that I still would rather own my own. You just have to decide which problems you want to live with. It's all mindset, patience, dedication, and money.

Good luck with whatever you choose.

Thanks for your insights into your own O/O experiences Rayzer, and you make some good points to think about. I do think it is significant that even after all the troubles, you would still prefer to be an O/O rather than a company driver. I know it would be a ton of work and potential liability, but I feel like I would also prefer owning my own truck if possible. I've been a backyard mechanic since I could hold a wrench, so you could say yes I am mechanically inclined. I might even consider putting myself through diesel mechanic's school before going the O/O route. As for your questions about my team mate, we're a couple and we've been together for almost 5 years with no issues, and we both want to do the team trucking thing together. I don't think us getting along will be an issue. We would be saving up as company teamsters first, until we had enough to buy a used truck and still have a significant emergency fund.

Rayzer makes some great points, and I'm sure the folks who are curious about our stance on truck ownership appreciate an actual owner operator jumping into these discussions. Even though I was three decades in business and owned as many as six trucks at once I never seem to say the things they are wanting to hear. I loved Sue's contribution, I would also consider her as very much experienced in the realities of truck ownership.

There is no getting around how tough it can be. Kieran, if you will look at other discussions we've had about this, and there are many, you will discover a common thread in them when advice comes from an actual owner/operator and that is the very thing Rayzer brings up when he says:

Like I said, there are a ton of reasons why you should be an O/O and a ton more you shouldn't. They both come with their own problems. The one thing I have always suggested to someone that asked me if they should become an O/O is that I HIGHLY, HIGHLY, recommend you don't even consider becoming an O/O until you have a rather large emergency fund in place, especially if you are buying a used truck.

He put a good dose of reality in that statement, and it gives him a good deal of credibility in my opinion. But what is interesting to note is that almost all of the owner/operators suggest that you don't even begin to think about this without having a large cash reserve set aside. That one fact alone should give you pause, and make you realize that what Brett and I are always stressing to you guys about how the risks outweigh the rewards (in our opinions, based on the nation wide averages that are easily obtainable) is very much the reality in this business venture. Any time an experienced person tells you "yeah, there's some great money to be made in this, but... you need to have a large cash reserve" - uhh, that means you are fixing to start bleeding in a way that can't be easily stopped.

There is a really legitimate reason there are a lot less owner operators today than there were twenty five or thirty years ago. And that is why these experienced folks say you had better be prepared to lose some money. What else does that large emergency fund count for if you are definitely going to be needing it to be in place? If you have to deplete, or come very close to depleting that emergency fund during your first few years of being an owner operator, then you haven't even begun to "make" more money until you have replaced those funds and started building a larger reserve for that next big disaster that is looming.

Kieran, as a beginner at all of this, here is the voice of reason, and experience that I would listen to if I were you:

It's a whole lot to think about. Yes, they absolutely gross some big bucks. But when the settlement is received and the bills are paid, the bottom line is.. about the same as a company driver-- maybe even less if they had a bad week, month, or year. Yeah the O/Os love to brag about money.

And I think that even Rayzer himself would agree with me when I say you not only need to have that cash reserve set aside, but goodness man, you need to get some experience first, and not just three to six months either. You are green and fresh out of the bud, you do not have a clue about what you are about to embark upon. Get out there on someone else's dime for the first few years, it will be way better to learn the ropes while letting someone with deeper pockets absorb your mistakes as you learn what it takes to survive in this jungle.

We would be saving up as company teamsters first, until we had enough to buy a used truck and still have a significant emergency fund.

Sorry Kieran, I missed that you already stated your plan... good for you, I'm glad to know that. It is the only prudent way to approach this venture.

I do have to say that when you are an O/O, you have a lot more freedom with how you are dispatched, where you run, when you run, and time off during holidays, and more. I do think that running as a team with a spouse/significant other where all the money is going into one bank account has more potential for success than someone running solo. As a solo driver you only have the one income, obviously, but as a team...wow! This is especially good if you have the patience to do this right and take the time, like you said, to be team company drivers first to save up the money. Just keep in mind that running as a team you are going to be knocking down some serious miles per year, probably over 200k. That means you probably won't, or maybe I should say, shouldn't get too old of a truck because even though you might be a mechanic or mechanically inclined, you don't want to be spending time that could be behind the wheel in some truck stop parking lot working on a truck.

I also have two different scenarios that you should consider. First, I have a friend that is a company team driver for Old Dominion and although he is teaming with a guy they found for him to team with and not his spouse, he still is knocking down a huge chunk of change. I don't know about last year, but two years ago his gross pay on his W-2 was just over 89K. His team partner was less because he had less experience, but I don't know how much. They have several husband-wife teams that do very well as company drivers with great benefits and several that he has talked to are on dedicated runs and home weekly. Benefits is also something you might want to consider, including 401k's (free money because of the company match). If you choose O/O, since you are considered self employed, you will not receive nor be eligible for company benefits and you will have to purchase that on your own.

Second, I have another buddy that really had a bad stroke of luck about 3 years ago. He moved his family from Portland, OR area to Denver, CO area where the company he was leased to was based so he could be home more. He bought a house and then not long after he lost the engine in his truck and was still upside down on the loan. He had tapped all his resources moving and buying the house so he lost the truck to repo. Almost immediately his now ex-wife announced that she was done with the marriage and within a couple weeks moved back to the Portland area leaving him to deal with the house. He also moved back to the Portland area to be around his kids and family and had to do a short sale on his house. It was a mess and the poor guy ended up having to file bankruptcy to get relief from everything that had snowballed.

So, after all that he tried working a local job for a while and it was horrible for him. He was completely broke and didn't know what he was going to do. He ended up going to Prime, Inc. out of Springfield, MO and leased a truck from them. I thought he was crazy because all the bad stuff I had heard over the years, but in a short time he has turned everything around and has a large chunk of change in the bank. After he explained how everything worked over there, I'm not so sure I wouldn't be interested in doing the same. There is no risk when leasing a truck from them. You get a new truck O/O spec'd with an APU and when you consider what you would pay for a new truck if you were to go buy it and finance it. The big difference is that if you decide that you don't want to, or can't for some reason, you can walk away from the lease without a negative mark on your credit. They also have teams there. I don't know you or your partner's situation, but if you need training they also provide that and will pay you to go through their training.

I know you have a lot of people that slam Prime and any other lease from a company, but again, every person has to do what is right for them and not everyone's situation is the same, so don't listen to the hearsay and negative comments. Always get the information first hand from the company you might be interested in. I can tell you for a fact that there are also Prime drivers that slam the company and the money they charge for stuff, but if you really got to digging into their situation you would probably find that they are running their business the way they should be. If you are ever interested in getting more info on Prime, I could put you in touch with my buddy and he could give you the rundown on it. If you were to talk to him you would find out that he is a number cruncher and is usually right about stuff. I have never ever caught him in a lie or anything close to it. He's just an ex-Marine that is a pretty straight shooter...no pun intended.

I know I am rambling a lot, but I just hated it when I was searching for information about becoming an O/O and couldn't get anyone to give me good information. So, I hope this is helping at least a little. I know I haven't even touched the tip of the iceberg, but hopefully it will get you thinking of more questions. Oh, one more thing you might consider if you are already trucking it up as a company driver. Run your company truck like it were your own. Keep track of the fuel mileage every single time you get fuel and see how you are doing and keep track of all your miles. Then every week figure out how much you would have made if you had been an O/O and how much you would have paid out. That may help show you how you would do as an O/O.

Dedicated Run:

A driver or carrier who transports cargo between regular, prescribed routes. Normally it means a driver will be dedicated to working for one particular customer like Walmart or Home Depot and they will only haul freight for that customer. You'll often hear drivers say something like, "I'm on the Walmart dedicated account."

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

APU:

Auxiliary Power Unit

On tractor trailers, and APU is a small diesel engine that powers a heat and air conditioning unit while charging the truck's main batteries at the same time. This allows the driver to remain comfortable in the cab and have access to electric power without running the main truck engine.

Having an APU helps save money in fuel costs and saves wear and tear on the main engine, though they tend to be expensive to install and maintain. Therefore only a very small percentage of the trucks on the road today come equipped with an APU.

And I think that even Rayzer himself would agree with me when I say you not only need to have that cash reserve set aside, but goodness man, you need to get some experience first, and not just three to six months either. You are green and fresh out of the bud, you do not have a clue about what you are about to embark upon. Get out there on someone else's dime for the first few years, it will be way better to learn the ropes while letting someone with deeper pockets absorb your mistakes as you learn what it takes to survive in this jungle.

Absolutely, Old School! I definitely agree with you, well said!

I won't lie about it; becoming an O/O is exciting! The fact that you are a business owner is something a lot of people dream of, no matter what profession you choose. But at the same time it is terrifying just to think of all the things that can and WILL go wrong. You don't know where and you don't know when, but they will go wrong. And God help you if you have a second bunk in your truck because there are going to be times that you swear Murphy has moved into one of them...good luck evicting him, he can be tenacious.

As Old School said, learn the ropes first, you will be very glad you did in the end. You shouldn't be in a hurry to jump into the world of business ownership if you are still trying to learn to float your gears. In fact, I'm not sure anyone should jump into it until you can navigate east of the Mississippi River (or west, if that's where you live) without pulling out your atlas every time you get a load. There is so much to learn about driving a truck and even after 19 1/2 years I can honestly say that there are still very few weeks that I don't learn something, or at the very least re-learn something that I forgot. As much as there is to know about driving a truck, there is so much more to learn about not only being a truck driver, but being a good, or even a great truck driver. But when you throw in all the extra stuff that you have to learn to be a safe, productive, and profitable business owner, whew, it could become too overwhelming and end up driving a person out of trucking altogether.

Just remember, not only will you be doing the normal duties of a company driver, but you also take on the added responsibility of making sure your preventive maintenance is done in a timely manner, you will handle your own breakdowns (depending on the company they might help some), you will have to find a good tax person to handle your taxes (quarterly and annually) and I do stress a good tax person. There are also other taxes you will have to pay like your HUT (2290) of $550 every year, fuel taxes (depending on your company), and road taxes (depending on your company). You might (depending on which state you live in) have to pay workman's comp or some form of it. You will have to either get your truck insurance through the company you lease to or go out on your own and buy it. It seems like everyone has their hand out when you jump into ownership, but if you lease on to a good company they really help with a lot of the stuff you deal with. They will help with reminders about taxes that are coming due, finance breakdowns, you will get deep discounts on tires, batteries, parts, fuel, etc.

Don't get me wrong, I don't want to sound like I am discouraging you from doing something you might be considering, I just think you, and anyone else looking for answers, should have as much information as you can get to make the best decision possible for yourself. One final piece of advice and I will shut up. If you do decide to take the plunge, make sure to surround yourself with successful O/O's, ones that have been out there and proven themselves. They are not hard to miss. Their trucks are usually in immaculate condition. And they are usually the quiet ones that know to stay away from the loud mouths bellied up to the bar at the Iron Skillet or Country Pride. They are also not the ones on the radio bragging about how much money they make. Stay far away from those that look like their truck should be condemned by the state yet bolster how much money they are making and somehow can't seem to find the shower room. Nothing good can come from that type...trust me.

All great advice and insight in the world of an O/O. Thank you. And of course we wouldn't jump into such a thing without experience. As I mentioned our initial plan was to drive for a company until we save enough to buy a used truck and still have a good emergency fund built up. I really do appreciate all the information and advice, this site is awesome! :)

Do some research in regards to owning a business and the company you're interested in leasing on to. Talk to drivers who are there and ask how long they have been with the company, you will get a feel real quick if this is what's in your best interest. If you like what they have offer and like what you're hearing then go find a truck that you can afford and feel is a good fit for what you will be doing. I'm a company driver,my day job. I'm also part owner operator , although our son is the primary driver of the truck I will drive it on the weekends if need be although his Grandpa does most the weekends. We are local,hauling grain and feed ingredients 6 to mostly 7 days a week with a 12.000 dollar truck and a leased hopper that is gonna end with a yearly gross of almost 200k with a very respectable gross per mile. I'm surprised it's doing as well as it is but I can tell one thing for sure it's how you manage the six figure income that will set you apart from the others because there's a helluva lot each week that jus runs right through you hands very quickly! Best of luck to ya!