Questions About Prime Leasing

I am currently a TNT student at Prime, so by all means a newbie to the industry; however, I am currently rolling with a lease operator at Prime. I get to see how much he is getting paid on loads, and he seems to make some pretty good money. With that said, we are rolling as a team and getting twice the loads he gets solo. I do not see how he could make appreciably more money than a solo company driver if he wasn't rolling with students all year.

More money? Sure. But to me it does not seem to be enough to make the additional risk incurred worth it. So I, at least initially, will be going company once I finish my TNT training. Most of his buddies that are lease seem to run students as well.

Hope this helps.

Running with students is the only worthwhile way to make money as a lease. I will admit, the money is pretty good as a trainer doing TNT but you add even more risk to the equation. Just not my cup of tea.

And as a respectable Russian, you drink your fair share of tea.

Yes Daniel, I'm a stalker ....

I am currently a TNT student at Prime, so by all means a newbie to the industry; however, I am currently rolling with a lease operator at Prime. I get to see how much he is getting paid on loads, and he seems to make some pretty good money. With that said, we are rolling as a team and getting twice the loads he gets solo. I do not see how he could make appreciably more money than a solo company driver if he wasn't rolling with students all year.

More money? Sure. But to me it does not seem to be enough to make the additional risk incurred worth it. So I, at least initially, will be going company once I finish my TNT training. Most of his buddies that are lease seem to run students as well.

Hope this helps.

Running with students is the only worthwhile way to make money as a lease. I will admit, the money is pretty good as a trainer doing TNT but you add even more risk to the equation. Just not my cup of tea.

And as a respectable Russian, you drink your fair share of tea.

Yes Daniel, I'm a stalker ....

Fair share? I've specifically made two individual stops today so I can boil water for tea! I'm an addict. But It's not the worse thing you can be addicted to, and I hardly drink green tea loaded with caffeine.

I like green tea! I lived in China long enough to pick up the habit.

As to Prime Leases... just pop over to www.truckersforum.net/forum/forums and bug Injun about Girly.

You and Pinkle aren't the only ones with a named truck :D Injun has her Girly and leases with Prime.

My fixed costs include truck payment, insurance, tags and accounting. If you look at the checks I posted you can also see I hold back .06 cents per mile for an emergency fund. Once again whoever mentioned the part about blowing two tires....Prime takes money out of my settlements weekly for a tire fund. So if I was to blow a tire, I at least have some sort of money there to help. And name whatever week of whatever month and I'll post my settlement. And to say I don't qualify to be an instructor is bogus. I've already been training students. There is no secret to success. Leasing a truck adds more responsibility because your telling that company when u sign that paper that you promise to run and not worry about being home 3 days every 3 weeks. Different strokes for different folks, what works for me might not work for you. But for anyone to say that you cannot make more money from leasing is unrealistic. Especially only saying after all expenses that it would only be $30 / week. Some people aren't cut out to lease, it's kinda like the Marines slogan....the few, the proud. Upon completion of the lease, Prime also pays you a check depending on the condition of the truck from anywhere to 15-20k. CASH MONEY! If it was such a uphill battle being a lease operator, why do you see and hear about drivers at prime doing 2 or 3 leases? I know 4 guys that came into Prime at the same time I did, all 4 of us signed a lease within a couple weeks of each other. Only one person has left Prime and his reason was because he wanted to be home more. If you need to go home once or twice a month then of course leasing isn't for you. But if your like me and only take 3-4 weeks off a year then you'll understand how easy it is to be successful. I have had my truck since the first week of April. I got it with only 1100 miles. Right now I have over 70k. I run hard and focus all my attention each day on being the most profitable I can. If you have a business mentality, it's impossible not to be successful.

We were O/O's for 15 years, and TSB has over 45 years trucking. Do you want to know the WORST thing to hear as a Lease or O/O ?? We blew our engine....replacement CAT engine $27,000.00...total down time for the truck 9 weeks.....thats $27K out of the savings we didn't have...and 2 MONTHS plus with no income.....It sure makes that shiny "almost mine" truck kinda look dingy...So, if you can get thru that....your income for the next YEAR will be paying back whatever or whoever you got the money from JUST TO KEEP ROLLING.....yup...makes alot of sense....NOT. The best day of my trucking life was when I signed away the title to our last truck.....

But of course Robert wouldn't know anything about what I talk about.....cuz he just leased his truck....makes me wonder...if he's makin' all this big money leasing...why can't he hang on to it long enough to BUY his very own big truck ??? After all...this lady driver did..... And DANIEL....dude, This lady driver, Matriarch Flatbedder Thinks you are the Cats Meow.....don't change a thing about yourself, or how you run your truck...I'll admit it...I'm a tough old broad, who has done some really insane things....but trying to sleep with a rookie steerin' and gearin' MY truck down the road ?? Oh Heck No !!!!!

Starcar, once again I have only been driving for a year, I wanted to learn more about the industry (seeing where loads went and how they paid) before I decided to make that big of a commitment like buying my own truck. But to be completely honest, I do plan on buying a truck. Prime offers to do a lease called an "ace" lease. So after the completion of the lease the truck is yours. But i got a brand new truck that is still under warranty and will be the entire time I have it. So i dont need to worry about having a 27k bill from a blown engine. It's an entire different ballgame tax wise when u become a owner operator compared to just a lease operator. But I'm tired of trying to convince yall of how one could be successful leasing a truck. You can't fix stupid.

I just finished my driving shift and am a little groggy but I want to clarify a thing or two. I just finished my first week of the 40k prime wants. I've watched my trainer settlements and see he's making a good profit with leasing. This is his 4th year with prime and ,40th in the industry. I've talked to another TNT trainer at our last 01 that just started his 6th lease with prime. I've talked to a couple other solo lease guys both on their first. They're all turning a profit. But money IS NOT my major desire to look into leasing. It's the freedom to make your own way out here. In orientation they made it clear as a company driver the company chooses your routes, when you fuel, how much fuel and control your home time. I don't like the idea of have so little control of my job. My plan is to go as a company driver for awhile just so I can develop a good rapport with my fleet manager and start getting some miles under my belt. If in a few months I like the way things are going and yes the money is decent,I may stay company. But I'm leaning towards the lease option and even training so I can have a little more freedom down the road AND make some good money. I totally understand the risk of blown tires and down time and accept those. But if everyone shared the ideal of never leasing because of that, there wouldn't be any lease operators. Someone has got to be doing it and doing it well for prime to have a leasing coMpany. Those are the guys (and gals) I want to learn from. If I'm gonna do it, I want to learn from the successful ones. That's why I started this thread. I truly appreciate everyone's input. Time for sleep.

money IS NOT my major desire to look into leasing. It's the freedom to make your own way out here. In orientation they made it clear as a company driver the company chooses your routes, when you fuel, how much fuel and control your home time. I don't like the idea of have so little control of my job

Ok, first of all money should always be the primary reason to start a business, otherwise it's a hobby. And if you can't make appreciably more over the long run than an employee then it isn't worth doing.

Now think about something....what is Prime's (and every other business') primary agenda? Making money. Why do you think they're t controlling your routes, fuel stops, and home time? That's right....because that's what it takes to turn a profit out there. Notice:

If you need to go home once or twice a month then of course leasing isn't for you. But if your like me and only take 3-4 weeks off a year then you'll understand how easy it is to be successful.

So that blows any home time theory out of the water. You can expect to run and run and run your butt off. Remember the #1 difference between being a company driver and a lease/OO......you won't lose money as a company driver but there's no limit to how much you can lose as a business owner. Every time a company driver takes a vacation they lose nothing. Every time those wheels stop turning on a lease your insurance, truck payment, licensing fees, and all other fixed costs are falling out of your pocket right onto the ground.

So you're micromanaged because without that the company wouldn't make money.

I have had my truck since the first week of April. I got it with only 1100 miles. Right now I have over 70k. I run hard and focus all my attention each day on being the most profitable I can. If you have a business mentality, it's impossible not to be successful.

Ok, here's another thing that hasn't been mentioned yet. What companies do when you're new to leasing is load the money on you. They know that the overwhelming majority of us have always had very little money and have never had anything as prominent as a major business and a beautiful shiny new big rig. They fill your accounts with bonus money and extra pay in the beginning. Now look where you are. You're Big Daddy!!!!! You can go show your family and friends your shiny new rig, tell em about the riggers of life as a company owner, and really soak it all in. And there you have it - you're hooked.

Then slowly but surely it somehow starts to dwindle. It's kind of like the "boiling a frog" thing where you put the frog in water that's a comfortable temp. He thinks he's living the good life. Meanwhile, unbeknownst to him, you begin raising the temperature so slowly the frog doesn't notice. He waits it out.....waits it out......and suddenly it's too late - he's dead.

This is what companies do with their lease programs. They fill your pockets with money, put you in a brand new truck, give you every mile you can stand to run, and treat you like a king. In an instant you're hooked. You love being a business owner with your own shiny rig and bank accounts full of money! Ah company drivers - "Those fools!" you tell yourself and anyone that will listen. Are they too scared to do what I've done? Are they too dumb to handle their time and money effectively enough to do what I'm doing? Whatever the reason it doesn't matter because I'm the big Mac Daddy now and everyone knows it....mostly because I've been bragging about myself non-stop since I signed the paperwork.

But then you have a week with a few less miles. Then another. Slowly over time you notice the miles weren't quite as fantastic as they were. Then you have a breakdown. Then another. Oh yeah and all that bonus money they paid you up front and the extra they paid for loads in the beginning? That dried up. But hey....no biggie. That's life in the business world, right? You have to tough it out and make it work. So you try to run harder. You stay out longer. You cut back on spending.

But somehow you're still not quite able to get up to where you were. The miles are pretty good but it seems like something always happens at the wrong time - a load gets delayed, a tire blows out, you were in a slow area for a day or so. Nothing that's your fault necessarily, but something has to change because you're just not where you were.

And you never will be. Why? For starters you mentioned:

I don't understand the 3% profit margin

Well you're about to! Because let me tell you - there's nothing special about you or your situation that will allow you to do better than that over time. There's a phenomena called "reversion to the mean"......which means no matter what the highs and lows are, over time you'll keep coming back to the average. In the case of new lease drivers, the extreme highs come from all of those bonus checks. The extreme lows come from breakdowns, home time, and slow freight. In the middle - that d*mn 3%. No matter what you do you can't seem to beat that over the long run. And by long run I mean several years.

In my next comment I'll ask you guys a couple of business questions.....

Ok, so if I'm pondering starting a new business there are a few things I would insist upon before attempting it.

1) Do I love doing what I'm considering doing? Because when you own a business it becomes your life. It has to. Your top competitors live their business every second of their lives. They go years without vacations. They go years without buying anything new. They fight and fight and fight and number one on their agenda is wiping you off the map. So prepare to come out fighting hard and maintain that til the bitter end.

Robert you said you've put 70,000 miles on your truck in less than four months. That's about 225,000 miles per year. Now I drove for 15 years and I ran hard. What pace do you feel you can maintain over the long run - say two to three years? Do you think two years from now, running solo, you can keep up that pace and put nearly 500,000 more miles on that truck??? I certainly hope your answer is, "H*ll no!" because whether you know it or not, that's the answer. You can't do it. You'll burn out. On top of that, right now your accounts are artificially flooded with bonus money from the start of your lease. Say you cut out all of that bonus money and turned 3,200 miles per week or about 130,000 miles per year after home time. How do your paychecks look now? Then add a breakdown or two or three. How about now?

No matter how much you love what you're doing you have to base your calculations off of a sustainable pace. I'd call 150,000 miles per year the maximum sustainable pace and 130,000 is more reasonable for a solo driver.

2) Can I easily differentiate myself from the competition? Because anyone who understands the business world knows that fat profits come from fat differentiation. Put simply, the competition can't keep up with you - you're too good at what you do. Look at Ebay, Google, Apple, Amazon - in the beginning nobody could touch them because of their superior technical skills. Not only have they maintained that superiority but they've grown their brand and scale in a big way. How can anyone compete with that? It's nearly impossible. Every one of them has clearly differentiated themselves. Nobody can do what they're doing as well as they're doing it and they have the fat profits to show for it.

Now look at a lease driver. How can you differentiate yourself from the competition. That's pretty easy, right?

• I'll save more money
• I'll get better fuel mileage
• I'll take better care of my truck
• I'll run harder
• I'll take better care of the customers

Unfortunately none of that will differentiate you in any way. Everyone is capable of doing that just as well as you can. Not everyone will do it that well, but they could if they put in the effort. Not only that, but you're hauling the same freight from the same customers on the same roads using the same fuel driving the same truck under the same laws using the same freight brokers. Now how are you going to differentiate yourself?

The answer is, you can't. That's why trucking is a commodity service where only the price matters. Because any knucklehead with a truck can haul my freight from point A to point B on a given schedule. So who cares who hauls it? Doesn't matter. Just get it there for the cheapest price possible. And that's why there are little or no profits to be had in the trucking industry - no differentiation.

Compare that with restaurants. Very few people can cook on a world class level. Very few people know the trillions of tiny details that go into running a restaurant efficiently. You can easily differentiate yourself with a restaurant. Your food, your service, your atmosphere, and your decor will all be completely unique to your restaurant and they will matter very much to your customers. That's how you'll set yourself apart. People will indeed be willing to pay more money for a better product and better service, unlike the trucking industry where the service is the same regardless of the company that hauls the freight.

When you're great at what you do you want to prove that by differentiating yourself, not by copying others. That's where the big profits are. So the ones who can't run a restaurant well will try immitating you and fail. The ones who can run a restaurant well will do something completely different than you're doing. So you'll have a unique niche that either can't or won't be duplicated.

How will you do that in trucking?

3) Can I turn much bigger profits over the long haul as an owner than as an employee in that industry? Because starting a business is inherintly risky. It takes more time, more money, and more knowledge to own a business than it does to work for one. So you have to be rewarded for that effort and risk. In trucking the average profit margin is 3%. When you look at the astronomical costs involved with running a trucking business you'd have to be crazy to think that's worth an extra 3% over being a company driver. That's a horrific risk/reward ratio.

One final point. If leasing or owning a truck is so profitable, why do companies offer financial incentives and marketing pitches to convince you to do it? Why don't they keep the trucks and hire company drivers exclusively? If you owned and operated a lucrative hot dog stand would you pay people big money to open their own stands and compete with you or would you keep your mouth shut and open more stands yourself?

I always tend to er on the side of caution, and so i have no intention of starting a lease for a few reasons. I've been reading this thread for a while and although on both sides their are opinions lacking in information believed by the holders to be facts, the one that matters the most is the fact that the companies push the leases so hard. These companies have entire departments of people, consulting companies, and years of experience telling them that what's most profitable for them is to lease out the trucks to drivers.

Since there's no practical economical difference in how you drive when you are a lease/owner other than the risk involved with the truck it only stands to reason that the value of owning the trucks simply isn't worth it. Bret is right on when he says, if it was really such grand earnings in the long run, they wouldn't waste the money on the people paid exclusively to convince you to lease.

Consider that last sentence carefully. It's more profitable for these companies to waste time doing their best to make drivers lease the trucks than it is for them to just own the trucks and employ the drivers.

That being said, i don't think it's impossible for someone to be on the beneficial side. Looking at one factor, which is driver safety, will explain why. The drivers that manage millions of miles accident free are the polar opposites of drivers who's truck rolls off a cliff, but both of these factor into the profit margins of the company as a whole. If they were both leasers the cliff diver would certainly be losing out, but the gold star driver would be ahead of the curve and could be profiting much better than the averaged amount that the 3% that the company would have earned between the two.

Regardless, i have no intention of getting into anything like that until i feel like it's suitable after years, and even then i would probably only do it if i could buy a truck upfront if only to reduce the monthly burden and risk involved after committing.