Brief But Interesting Conversation Between Two Company Drivers And A Lease Op

While waiting at the loves, I ended up somewhat cornered between myself, another company driver and a lease op. I'm not very talkative and usually steer away from other drivers because they like to do things like talk.

They were talking, and I finally asked the lease op what he typically netted. He honestly replied after all was said and done, 60 to 65k pre tax. Obviously his hope was that as soon as he owned the truck, that would go up.

He asked both of us what we net, two different companies but similar. We both replied low 6 figures, 100 to 105k pre tax.

I asked him what he expected to make after he owned the truck, he was fairly realistic as stated, not really any more than you two guys.

Just some food for thought, at least he was honest and knew enough to know the difference between revenue (gross) and profit (net).

It can be done, but with a failure rate of 97 percent, the odds of winning the lottery are slightly better. Unless there was overriding reasons to do it for scheduling or personal reasons, do the risks justify the rewards.

Davy, I had a discussion this past week with one of our lease operators at Knight. He and I talk regularly. A while back he was very surprised I was able to tell him what I thought his accountant would tell him he made. He had been boasting to some of our other company drivers on the dedicated account we serve. He was very proud that he had "made" $180,000. When I said I would guess he made $60,000, his eyes popped out of his head in amazement. Apparently he paid good money to an accountant to give him the same number I popped out of my head in about three seconds.

In our latest conversation, he was sounding rather excited that his last payment was due in July of this year. He kept exclaiming, "That truck will be paid off!" I asked him about the balloon payment that I understood was part of his lease. He said, "Well, yeah I will have to pay them $12,000 in addition to that final payment." My curiosity burst into another question. "How do you plan on coming up with that part of the deal?" He responded, "I'll have to borrow it from somewhere." Questions are flooding my mind and flowing out of my mouth. "Do you have any sort of collateral?" He says, "I have the truck."

Actually he doesn't have the truck. He has no clear title. Some people's ideas about something being "paid off" are very different from mine. I have always tried to help this poor fellow, but I cannot seem to educate him on financial stuff. He knows just enough to keep himself in the poor house, and he does that very well.

I spoke with my old TM from there not long ago, she provided me with the average gross for the last few months for the L/Os. Running the costs, no matter what type of financing I ran, even buying a truck outright and then amatorizing the costs, the most I could see was a possibility of a few hundred bucks more under ideal situations on a great week. Just not worth the risk.

I know you and I both owned businesses and I felt the margins were tough enough in that, they're razor thin in this and the contingency is far greater.

Definitely gave me some gratitude for where I'm at, I've gotten very comfortable with being an employee.

I honestly believe our backgrounds as contractors gave us a big advantage in understanding how to succeed at trucking. I've said for years that trucking is very much like being self-employed. It takes the same kind of drive and motivation to really enjoy success. It's a mindset that's missing in a lot of people who attempt it. That's why there are so many crybabies online telling us how cruel and unfair the trucking industry is.

Success at trucking requires a lot of drive and initiative. Those are things missing from most average employees. This is an extraordinary career that requires extraordinary people. You cannot come into this expecting great results when you only put in average effort. It really is a field that rewards it's top performers. That's just the reality of a commodities business. Movers and shakers are needed desperately, and rewarded accordingly.

Old School says it as it is:

Success at trucking requires a lot of drive and initiative. Those are things missing from most average employees. This is an extraordinary career that requires extraordinary people. You cannot come into this expecting great results when you only put in average effort. It really is a field that rewards it's top performers. That's just the reality of a commodities business. Movers and shakers are needed desperately, and rewarded accordingly.

I'm going to quote (and attribute) this to my students in the first day of class! Thank you!

The physician says you are physically ok to drive a truck. The state gives you a license that says you know how to drive a truck safely. The rest - the extraordinary part - comes from your mind and heart. That part is up to you.

Lease opportunities are an act of love towards the carrier. The carrier make regular revenues while the Lease Op. absorbs the bulk of the overhead of running the truck and 100% of the liability for the equipment.