Some Straight Talk From An Owner Operator

Bud sorry it didn't work out for you, failure rate is pretty high. You're story is probably more the norm than mine. Just a side note my warranty goes to 500000 and I have breakdown insurance to cover my time lost. I don't foresee any problems getting to the end since I only have a little over a couple 100000 miles to go on it.

The problem wasn't the warranty, it was the lease terms. Sounds great going in, bites on the way out. Dispute right now is tire wear -- or at least that's what they're claiming ate up the $3000 I had in escrow. Tough to get any details from them. They just sent a one-page bill saying I owed them $210. Had to ask for settlements I'd never seen before, and still waiting on detailed invoices to find out where the money really went. And this was supposed to be settled 75 days ago per the lease terms. They've had a lot of quitters.

Then there's the stuff I was warned about here. For example, OK, I get paid 72% of the load. They show how much the load paid and then do the math on the settlement. Sounds pretty straightforward, right? And it is until you run into an O/O who shows you what the same load pays on the invoice to the shipper. Gee, never saw one of those before. How come it's so much higher?

There were other things, little nickel and dime type stuff that irritates at the time, but then when you add it all up it makes you angry. So much for leasing.

Owning a truck and having your own authority might be better than that situation. A buddy of mine is hot shotting now with a pickup and a 40-foot trailer. He's always been strictly honest about the money (we used to compare notes when in the same boat.) He's making money, but he admits that the additional work to keep track of IFTA taxes, insurance, fuel, maintenance, etc. is a real headache at times. And he's still only getting about 88% of the load, because most of the time he gets loads from a broker instead of off a board, and he's paying someone factoring fees so he doesn't have to carry the float on invoices. And he runs his *ss off all the time to make it.

So, while I know I could make a go of it if that was my life-long dream, the reward isn't worth the risk, as Brett and Old School and others have said. I have better ways to waste money. Heck, I could stop in one of the truck stop casinos and have better odds. But I'm not much of a gambler. My wife depends on the money, not just me.

I'm sure with 30 years in business Old School could tell you about one catastrophe after another after another where he almost lost his business a number of times and had to take quick action to recover and keep moving forward. And I don't have any idea. He's never said a word to me about anything of the sort. I just know that's how it works when you're in business.

This is absolutely true. In fact sometimes it seemed the catastrophes came on a weekly basis! Not always, but there were so many weeks where I would just want to throw my hands up in surrender. I had a type of business where good money could be made, and at times it was easy, other times it could be brutal. I was talented at my trade and I had a really good customer base - those two things kept me afloat at times when everything else seemed to be in collapse.

I always tried to focus on the big picture or a long term approach, but you also had to have sufficient cash flow and reserves to make it through the times of drought. I got out when it became too difficult and risky to be worth it to me anymore. After taking time off for a couple of years I decided to go into trucking with the plan of being an owner operator. I knew how to lay out a realistic business plan, not just one that will satisfy a lenders requirements, but one that made practical sense for the person who ultimately had their neck on the line - that would be me!

My practice of making sure that I had a long term strategy in place that would see me through the difficulties and obstacles is where the plan fell apart for me in trucking, No matter how I re-worked the plan, I couldn't make it pan out in the long run. You see, in trucking the part about having sufficient cash flow seems pretty easy to me, you can always take a few days to run a load and bring in two or three thousand dollars - that is the easy stuff. Where it all fell apart for me was the long term goals, and this is why you will see so many of our owner operators out here on the road driving some really old and ratty equipment. They had no way to bank enough reserves for future needs of recapitalization. In other words, they could easily keep enough cash flow going to survive the present week or month, but they could never get far enough ahead to replace their aging equipment. Sometimes a really nice cash flow can be deceiving. This is why so many owner operators think they are getting rich, and yet five to ten years down the road they are back in the seat as a company driver. The need for capital to purchase new equipment, or in some cases even just the cash needed to replace an engine or transmission couldn't be cobbled together.

The lease programs make an attempt to mollify this concern by building in escrow accounts so that the operator is forced to be saving some of his hard earned cash. But as Bud experienced, they also have the final say over how that money gets distributed, and they typically determine that it is their money after all. I just never could pencil out a clear path to seeing a way that made it worth the risks for me. I know that it can be done, but I also know that it is accomplished by a precious few, and according to my calculations those precious few are going to be extremely lucky if they fared better than a good solid company driver who left all the worry and headaches up to their employers. Any time a person makes the sacrifices and hard fought efforts at a business venture he wants to be rewarded sufficiently for those efforts. Bud thought he was banking money for himself - he wanted those rewards! Unfortunately someone else held the password to his escrow accounts, and they were convinced that Bud had been putting that money away for them!

Continued...

It is just a tough business, and Brian is dead on when he said...

It's not something for the fainthearted or someone who needs a stable paycheck every week.

I have a ton of respect for Brian, and I think he is doing a great job and a real service to new drivers who are lucky enough to get on his truck. They will not only learn how to handle that rig, but they will realize just how dedicated and hard working Brian is. Those characteristics are hallmarks of successful people. If his students come away from their time with him learning more about those things than they do about driving a rig, they will be very successful drivers.

In the end I quickly discovered that being a good solid company driver is more like being self-employed than any other job I can think of. If you like the challenges of being creative with your work so that you can maximize your earnings then welcome to trucking. You don't have to be self employed and carry the loads of liability that come with that territory to enjoy the benefits of making sacrifices and realizing the effects of your good decisions. My dispatcher makes these comments to me all the time about how he has seldom had a driver like me. I'm not trying to boast, I'm just illustrating my point with my experiences. I've even recently had one of the other drivers on our fleet come up to me with this question, "Hey Dale, could you teach me your ways?" When I questioned him because I really didn't know what he was talking about, he told me that he had been complaining to our dispatcher about how little money he was making and the dispatcher told him, "Look, I've tried to help you, but you just aren't getting what I'm trying to say. You need to go talk to Dale, and see if he can help you out - he's making more money than anybody on this account."

I can take time off without it costing me, or I can bust my tail and make some good money at this. It is just my opinion, but it has been forged through my own real life experiences. The business end of this trucking business is better left to the folks with some really deep pockets, and a willingness to take some serious risks just to make a small percentage on their investment. It is a worthwhile endeavor, but it is also best to understand that it is an economy of scale. It takes a huge investment without much aversion to risk and loss if you want to make it last for the long haul. I'm just not willing to take the risk or sacrifice the investment, when I can take those same funds and do better with them than the three percent that I might be able to pull off if I'm really lucky as an owner operator.

Brett, forgive me for starting this conversation. I enjoy discussing business, and I realize that it usually gets us nowhere in here, but I found the conversation I had with this particular O/O to be so fascinating that I wanted to post something about it. For a guy to tell me that he basically considered it as an expensive hobby after pursuing it for twenty three years - well, that just confirmed for me all the things that I thought I had already figured out about it. The costs are too excessive if you are planning on doing this to make a lot of money. Now this guy could have done things differently, and that was part of Brian's point - I understood that. But after twenty three years of pursuing the dream, and all he has to show for it is a 1993 Peterbilt with a living room attached to it. I am convinced I can do better than that with the approach I am taking now.

Good to know