You want to become an owner-operator, huh? Well, there’s some very good info in this article so I recommend you read it through and leave me a comment at the bottom – I want to know what you think.
First things first. Have you lost your mind? Well, maybe not. Maybe you’re just pondering it because you don’t understand the trucking industry, or you’re looking for a new challenge. Maybe owning your own business sounds perfect to you. Maybe the romantic idea of cruisin the American highways in your own big, beautiful, shiny rig just sounds so damn cool you can’t take it anymore! Well then do it! But wait…wait…wait…..come back here a second. Get out your wallet. Give me all your money. No I’m not robbing you! You’re a giver! You’ve decided that having money isn’t important to you anymore so you’re going to buy a truck so that you can throw it all away! Well, I need it! So if you’re gonna lose it all anyhow you outta just give it to someone who needs it – like me!
You say you don’t understand what on Earth I’m talking about? Well then you better keep reading. There must be a lot you don’t understand.
I get questions quite a bit from people about becoming owner-operators, especially (ironically enough) since the economy has slowed and fuel prices have dropped. I figured since this guy sounds rather intelligent, opportunistic, and ambitious, I thought I’d share this with you guys.
Email I received:
Brett,
After reading through your website I see that your primary focus is on new drivers. However, due to your experience and exposure (e.g. website) and your obvious communication skills, I’m betting you can give me some insight – and perhaps some contacts – that will allow me to take “the next step” into the owner/operator world.
I’ve been trucking over-the-road (this time) since 1998, have nearly 2 million miles behind me as a company driver (3 companies), and I want to get into my own truck. As you rightfully point out on your website, most of a trucker’s world is an isolated one, and that includes even from other drivers. I got real tired of the filth on the CB very early-on and I spend maximum time in my truck taking college classes, reading and blogging politics. Thus, I actually know little about the entirety of the trucking industry.
Right now the loads are far and few between, but I’m figuring that with the low fuel prices, as well as the relatively low truck prices, this might be a good time to buy a truck. What do you think?
Secondly, how do I find a quality broker? Should I at first stick with a large company to dispatch me? I am currently with (note from Brett Aquila: company name witheld – not applicable). What do you think about buying a truck through a trucking company? What pitfalls should I look out for?
Bruce “Barracuda”
Brett Aquila’s response:
Note to readers – you did see that he explicitly asked “what do you think?”…right? I mean, hey, if you’re askin my opinion, then I’m tellin it like it is! So here goes…..
Hey Bruce!
My friend, I’ve gotta be honest with you – as I always am with everyone on the site – I know one thing very well about becoming an owner operator – the chances of ever making a nickel doing it are one in a million. I’ve never tried it, and I never will. Here’s why:
Trucking is a commodity business – the only thing that matters to anyone is price. So the trucking company that can offer the lowest price gets the load. Everyone else loses. Correct? Not necessarily. Sometimes everyone loses. Nothing in business is ever simple. Read on…..
I once took a small business course that was offered by the Small Business Administration and the speaker was a retired gentleman that spent 26 years in upper management at General Electric (not General Motors! LOL!). He said something that he was dead serious about and wanted it to stay with us throughout our business careers, and it has always stayed with me. He said “If you’re going to go into a commodity-type business, remember that there is only one winner – the one who offers the lowest price. Even that person barely wins because their profit margins are always razor-thin and on the edge of breaking even or losing money. So if you’re going to do it, you better be the low-cost provider, because the second lowest cost provider and everyone else behind him goes out of business.”
Listen, Bruce – you’re taking college courses and reading all the time. You sound like me – I taught myself computer programming during my years on the road. Besides truck driving school, I have also graduated from Motorcycle Mechanics Institute as a Harley mechanic, I’m a certified welder, and I’ve owned a tree service ( I was the crazy climber!). I love to learn and challenge myself. That’s why I’ve had so many careers! It sounds to me like you want to push forward in life – challenge yourself, make your life better. There are very, very few people out there like that anymore. Life has been too easy for an entire generation of us now. I’m 37 years old – and the only suffering I have done is self-inflicted. Sports, physical training, bad decisions, and working injuries. To this point there has been no World War in my lifetime. There has been no economic depressions. I’ve never gone hungry. And believe me, I was not raised by rich parents. A bookkeeper and a factory worker. Blue-collar all the way baby! Just your ordinary, perfectly wonderful small town upbringing. A dream life for sure. So for my generation and those that have followed, toughness, ambition, and hard work is something we were either born with or taught by our parents. It wasn’t burned into us by the hardships of world wars, economic depressions, and moral dilemmas – like the way Vietnam divided the country and spawned the hippie generation who tired of constant war and pain and suffering.
For people like us, hardships that test and forge our character and push us to our limits must be self-generated. Rock climbing, scuba diving, skydiving, running, and weight lifting in the physical realm. Spiritual reading, starting a business, or going to college in the cerebral realm. There are many ways to generate hardship for those of us who are so inclined.
You want hardship? Become an owner-operator. Obligate yours for years in the trucking business and lose all of your flexibility in life when you buy that truck. Struggle and suffer through the anxiety of making a huge investment in something that will likely never make you any money over time. Try to be a one-man-band offering the lowest price by beating out the competition from the large companies who are getting volume discounts on fuel, tires, parts, and mechanical work. Large companies who have services to provide that you can’t – like dropped trailers, flexible scheduling when loads suddenly increase or decrease from a shipper, and team runs coast to coast in 48 hours. Large companies who have gigantic pools of financing behind them from bond issuance, private equity, public equity (stock offerings), and collateral-based financing from the equipment and real estate they own that allow them to operate at a loss for years if need be.
And maybe down the line if trucking doesn’t work for you anymore then you could open up your own little department store right between a Wal-Mart and a Dollar Store.
Everybody has skills and abilities that make them unique. Traits that set them apart. Strong points that help them overcome their weak points. Find your strong points and carve out a niche in life that gives you an advantage over most of the competition. Do something that you’ll love to do, but make sure that not many people will be willing to work as hard at it or become as good at it as you will. Then attack! As one website I frequent states (www.compete.com) – “Track Your Rivals. Then Eat Their Lunch”. LOL! I love that.
I love to compete. I love to push myself to my limits. I love to learn. I love to run my own business. I’m just that type. And from what I know of the trucking industry, becoming an owner-operator is a game that most people lose in a big, big way. Sure, some win. But what is winning? Breaking even? Making a few grand a year after expenses? I don’t know – I never tried it. I never will. There are lot of “next steps” you can take in the trucking industry. You can become a trainer. You can work your way up in the offices of a larger company. You can become a freight broker. You can become an advisor. You can learn computer programming and write software for the industry. You can make money blogging for TruckingTruth (I’m serious about that! We need people. If you’re interested, here’s the scoop – Make money blogging for TruckingTruth – let me know). But becoming an owner operator has been a mission of financial suicide for the vast majority that have gone that route. Look at it from the shipper’s standpoint – what advantages will you offer that they should use you instead of the companies they’ve been using for years?
“What about these companies like Landstar that are only owner-operators? Will leasing on to them give me an advantage?” you ask. Well, it will surely be better than staying independent and trying to find your own freight and discounts on products and services. But if owning a truck is so profitable, then why do so many companies allow owner-operators in their fleets? Anytime someone offers me an opportunity to get into business with them doing what they are doing – like becoming an owner-operator and leasing on with them, or raising Alpacas, or starting my own home-based business – I always ask myself the same question – if being in that business is so profitable, then why don’t you just scale it larger yourself? Why do you want me to do what you’re already making so much money doing? It doesn’t make any sense! I’ll give you an example.
Krispy Kreme used to be a bigshot. Their donuts are delicious for sure. I mean, my God! Amazing! I used to own their stock and did quite well with it for a while. Krispy Kreme was a company that offered franchise opportunities – anyone could start one. But you had to use the company’s recipies and buy your equipment from them also. Well, Krispy Kreme has since collapsed. Why? Because it turns out that owning a donut shop is not really very profitable. What was profitable was selling the licensing rights, food, and equipment to the franchisees! The vast majority of the money that the company itself made was not from selling donuts (maaaaaaaaan those glazed donuts were insane!!!), it was from selling franchises. Well, owning a franchise became more and more expensive because the company had to continue to grow their profits to satisfy Wall Street. On top of that, the market became saturated once a huge number of franchises were opened and they began selling donuts to every gas station, convenient store, grocery store, and restaurant that wanted them. Eventually, the business model collapsed.
If owning a truck was so profitable, companies wouldn’t want other people owning their own trucks. If raising Alpacas was so profitable, people raising them wouldn’t want other people raising them. They would just raise more themselves! There are a million business opportunities out there, and all of them offer fierce competition and endless challenges. But owning a truck is nearly a financial suicide mission. If you love trucking, then keep on lettin those companies pay you $55k/year to drive their big, beautiful, shiny trucks – and let them suffer through all the headaches of running a commodity business. Licensing, fuel, permits, breakdowns, insurance – blah!!!! You just kick back, enjoy the ride, and make a killer living viewing the sites across North America in your company’s dream machine. And if you get tired of trucking – quit. A company driver can always just quit and return later at anytime – I did it a thousand times over the years. Drive for 6 months, quit that job, party for two months, run out of money, go back to truckin. LOL! There are advantages to those of us who have never been married and have no children!
But if you buy a truck – maaaaaaaaan are you in it up to your eyebrows now! But if I can’t change your mind, then my best guess would be to talk to one of the larger owner-operator companies like Landstar. Actually, first talk to their drivers. Get the real scoop on life as an owner-operator. And don’t be shy about telling these guys to be straight up with you. You’re not there to hear any fairy tales, you’re there to get the truth about owning a rig. Talk to a bunch of drivers, not just one or two. See what they say.
Then, when you’ve heard a million opinions on becoming an owner operator, you’ve discussed all the strategies, and you’re certain you’ve gathered all the information that is most critical to becoming an owner-operator, don’t just walk away from the whole thing – RUN! Run for your financial life! For the love of God, man, get outta there while you can!
Hey Bruce, I sure hope I’ve made myself clear. Sometimes I’m not real good at expressing my opinions.
I sure hope this helped. Let me know if you have any other questions. That’s what I’m here for!
Best of luck to you in all your endeavors,
Brett Aquila
www.truckingtruth.com
Well, there you have it folks. So if you’re going to get into the owner-operator business, then get out your wallet. And please email me at brett@truckingtruth.com so that I can instruct you how to send me all your money – while you still have some! Do not skip this important step in your career! I need your money!
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Awesome example you just took my decision of being an owner operstor I’ll stay driving with fedex frieght THANKS I’ll stay as a company driver
Brett, Don’t hold back man! ;^) I appreciate the easy to understand insight of being and O/O. I’m running!
call me crazy. but, if you have the contracts before you get the truck you might be ok. if you could get a good contract. perhaps federal and do what you have to do to keep the contract then get the truck. and, perhaps buy the truck from action. i am still open to being an owner operator. infact i have a couple of people i want to call next week about how to get a contract with their organization. if you have the business plan. people that already have a cdl and ready to work getting the truck really isnt that big of a deal as of yet. so far i have the people. and i am getting my business plan together. my current job my be contracted out to another company one day. but, i am still looking into my idea of owner operator becouse the company i work for is trying to privatize their drivers too. i’ll email you when i’m pooping cash…..lol
Ok ida – I’ll do one better. I’ll call ya crazy, and naive, and tell you that you’re incredibly likely to get your a** handed to you on a platter. Actually, I would insult you, humiliate you, and make a life-long enemy out of you if I knew that in return you would take my advice and stay away from the owner-operator idea all together. I’d rather lose you as a friend than see you get wiped out spiritually and financially.
You said:
“…get a good contract, perhaps federal, and do what you have to do to keep the contract then get the truck”….
OMG! So you’re saying just simply stroll on into the govt’s offices, no truck, no experience, no drivers – nothin – and say, “Hey Mr. Govt, please give me a lucrative long-term contract and I’ll buy a truck, hire a driver, and haul your freight. But I’ll need time to set everything up so please just let me keep the contract for a while until I can be ready and then I’ll get back to you soon.”
And you’re going to try this because you think the tens of thousands of well-established, well-equipped, well-connected, and well financed trucking companies with employees who have a combined experience of thousands of years in the industry haven’t thought of your incredibly ingenious plan and could never compete with you?
My friend, I feel for you. I’ve said all I can say. I’ve warned you thoroughly. I’ve tried like crazy to scare you off from this idea. If that’s your plan, and you actually believe for a moment that somehow that will work, or that in some fairy tale of a business world things actually work that way, then there is no other way than the hard way that you are willing to be educated. So travel the path you feel suits you and heed no warnings. But you travel at your own risk, of course, and against my strongest advice.
If you do decide to go through with this financially suicidal plan, do everyone a favor and document how it goes. I give you my word that you will be given your own blog afterward to educate people on exactly what you went through so that they can make better decisions for themselves. Of course, I’ve seen first hand these disastrous plans fail time and time again and my experience didn’t deter you, but at least we can say we did everything we could to help keep others from making the same mistake.
I wish you the very best of luck – I sincerely do. But to wish someone luck as they jump, with bank account in hand, out of an airplane without a parachute because they figure the rest of human civilization that came before them weren’t able to fly because they simply hadn’t thought of flapping their arms – well, it doesn’t make me feel any better. But I wish you the very best of luck anyhow.
Document everything. Please.
I can’t agree with you . Trucking has been good for us.Put my girl through collage with no loan’s for her or I to pay back.
So you’re an owner operator and you’ve made so much money doing it that you were able to pay cash to put your girl through college? I’d love to hear more details. I hear a million “I’m doing great” stories, but never any specifics, for instance what is your secret to making it in a business where 97% of the people fail? How do you, as an owner operator, compete against the large carriers? If I can make a fortune doing it, I’d damn sure like to. And if owning a truck is so profitable, how many do you plan to own someday? 50? 500? 5000? The more the merrier when the money is just flowing in I say.
Brett, I have been in the trucking industry for over 20 years. I have held several different jobs; tank, flat, reefer, local and otr. I have been selling heavy trucks for the past two years but have always had the itch to become an owner/operator. In my buisness selling I do see a lot of heartache and I do know a man can lose his shirt in a short 6 months running his own truck. I do see some success stories also. I think what does not make sense is there are tens of thousands of o/o’s in this world. Mercer alone has around 2000. The majority must be making a living at what they enjoy with some pride in running their own buisness, or are they all on welfare. I owned a convenience store for five years which gave me some idea how it is to work for yourself and deal with large sums of cash that I could not kep for myself. Trucking is much different in the fact of $400.00 dollar an hour wreckers and $100.00 an hour shop rates, it does not take long to spend a lot of money you do not have. I do wnat to get back into driving but it will most likely be as acompany driver, but how do I get this monkey off my back? Erik
Hi Erik.
Getting the monkey off your back – that’s easy! Weigh the pro’s and con’s of owning your own truck. The number one perception that people get is that they will now have control. They can haul what they want, when they want, and if they want. Ok, say you’re leased onto a company – which you’re likely going to be or you’ll have nobody to get freight from and no volume discounts to cover expenses. So this company has piles of freight to haul, and maybe 40% of it is “desirable” based on a number of factors, the rest is not. Are you only going to accept the loads you deem “desirable”? Will everybody else do the same? If so, who is gonna haul the rest of it? You see, ALL the freight has to get hauled. If you start refusing loads, the company you’re leased to is going to start taking away miles and letting you sit. You don’t cooperate with them, they don’t cooperate with you. Who do you think has more to lose?
The idea of having control is an illusion – you have to cooperate and go with the flow. You take the good loads with the bad – just like company drivers do. You can’t park your truck and take a few weeks off, neither. Oh, you COULD, but of course your truck would be repo’d by the time you got back because you’re totally broke and can’t make payments. So control is an illusion. You become a slave to that truck. And good luck running solo and getting the miles you need to make your payments. Most owner-op companies are moving toward having their own CDL schools so that they can make money from training the students and then put those students in the owner-operator’s trucks and pay them very little for several months. Why? Because that’s the only way most owner-ops can stay afloat – a very, very low-paid team driver along with them.
What if you decide you’re burned out and want to take a few months off from the road. A company driver can do it – no problem. I’d quit a company, relax for a couple months, and then either go back on with the same company or find a new one. Jobs are easy to come by for experienced drivers with a good record. You gonna do that with your own truck? Just make those huge payments without any revenues coming in? Nope.
The truth is, as an owner-op you have far less control of your life. You can’t just haul the freight you’d like to – it all has to get hauled. You can’t just work when you want to, the payments are HUGE and they can’t be put on hold – that truck MUST keep rolling. So I ask you, what’s the advantage to it? Pride? Bragging rights? Cuz it sure isn’t the money you’ll be making, the free time you’ll have, or the control you’ll have over the freight you haul. The downside is absolutely huge, the upside is nill.
You’re a business man – so I’m assuming you understand what a commodity is? Something that people will only pay the lowest price for – gasoline, oil, vegetables, airline tickets, etc. Trucking is a commodity business – the lowest price wins. It’s very, very rare that a company can offer services that other companies can not – and even when they do, it’s a very short time before the others copy them. I once spoke with a retired top executive from General Electric who was giving a business seminar. He said ( I paraphrase ) “You don’t want to be in a commodity-type business because only the low-cost provider wins, and everyone else loses. And even the winner usually only wins because they’re breaking even and the rest are not.”
How many trucking companies are actually profitable on a consistent basis? Almost none. Even the best lose a lot of money in slow years. How many airlines are profitable on a consistent basis? Almost none. Most of them only survive through regular bankruptcies every 5 or 10 years. Well, there’s millions of trucks on the road and hundreds of thousands of planes in the air. Is that because everyone is making a ton of money? Absolutely not.
Hey, believe me – I’m not one that likes to take someone’s dream and toss it in the flames. But I’d rather do that then see people jump into the fire themselves with their bank account in-hand and watch them fry.
Thanks Brett…What about Mercer for example. Thay have approximately 2000 o/o’s. Thay can’t all be independantly wealthy in need of a hobby or all completely on the brink of bankruptcy. That is only one company of many. I would think that several that can manage their money are if nothing else pulling a living out of it. Erik
Hey Eric.
Good question. That point is likely the reason a lot of people feel they can do it – “Well a lot of people are doing it – it must be working”. Financing can keep you afloat in a unprofitable business for quite some time – or supplement your income if it’s falling short, to allow you to pay your bills. Look at the numbers for the percentage of owner operators out there over the past 30 years – there’s been a steady decline. That’s the free market telling you that it’s working less and less as time goes on – and under the current rules and regulations will continue to do so.
As far as the owner operators that are currently out there – the question is, how long have they been doing it? The turnover in trucking is incredibly high and the number of people who become owner operators each year is very high. How long are they surviving, that’s the question. It’s easy to find new people that don’t understand what owning your own business is all about, especially in trucking. They don’t understand what a commodity-type business is, and the ramifications of attempting to start one. They basically use wishful thinking and their perceived sense of pride in owning a truck as their main reasons for going for it.
In a book I read about starting a business, it stated “Don’t buy yourself a job” – in other words, don’t start a business and find yourself taking a huge amount of risk, putting in an incredible number of hours, and taking on tons and tons of headaches when in the end, you could have simply gotten a job doing the same thing and eliminated the extra hours, the extra headaches, and all the risk of starting your own business – while still making just as much, if not more, money.
Owning a truck fits that idea perfectly. As I’ve mentioned before, take a look at the financial releases of the publicly traded trucking companies over a 5 year period – most of them barely break even, if they do that good. Look at the number of trucking companies that file bankruptcy every year – including large, well-established, experienced carriers.
I have two simple questions – first, what is it that you will offer or be able to do that the thousands and thousands of bankrupt companies and owner-operators each year could not do, or could not offer? And secondly, what do you believe will be the high reward that must accompany any high risk you take to justify the venture?
In the comments above you’ll notice Greg said, “I can’t agree with you . Trucking has been good for us.Put my girl through collage with no loan’s for her or I to pay back.” – so I asked for a few specifics to let us know what his secret is and why he did so well when almost everyone else fails? And just how good was he doing? Well, I’m incredibly shocked to see there were no specifics offered – as always – just an empty claim of success. I’ve heard so many of those I lost count years ago – but never any numbers, any proof, or any advice of any sort to back it up. It’s always the same – just a quick “I’m doing great!” – as they run the other way before you can ask them any specifics.
It simply makes no sense to try being an owner-operator – not logically, not financially. Understanding exactly what a commodity-type business is and the ramifications of starting one is key to understanding why you should not attempt to start a trucking business.
Hey Brett: How about becoming an owner operator for a company? Their truck, their logo, you drive.
Well, that’s what most owner-operators do – they “lease on” with a company and that company gives them their freight, discounts on tires and fuel, and all that. But the same applies it’s a terrible way to try to make a living. Company driving gives you good money, good benefits, beautiful equipment, no financial risk, and no worries other than being a safe, reliable driver.
Brett I can fully understand the whole commodity thing and why one would not want to gamble on something like that. I feel the reason that owner operator numbers are falling is simply, people are finding other lines of work that bring them more money with less work and less risk. Now with that said, the leading reason owner operator fail is due to a failure in proper planning. This becomes evident the first time one of them has a major break down. Any owner operator MUST have at least $10,000 in emergency funds to draw on in the event something bad happens not to mention as least three months of expenses to get them through periods of low or no income. Secondly, new O/O who bring in a meager .90 cents a mile have no business buying a bran new truck at over 130 grand… Again, a failure in proper planning! Here’s the other side of that coin… A new driver cutting costs to the bone and purchasing a truck for $15,000 dollars and then having multiple maintenance issues will also go broke because his profits are going straight into the truck. It reminds me of the saying “you have to spend money to make money”. The trick is to balance that expense against your income.
Being an owner operator can bring the driver somewhere between 75 to 100 grand GROSS a year if they follow their business plan to a tee and do not try to take as much as they can out of their business. Uninformed business owners often think that any profits the business does not use is theirs to take. This is so very wrong! Doing this is similar to an employee living pay check to pay check because he or she refuse to save any money for a rainy day. Then, the first little bump in the road equals bankruptcy… My roots are firmly planted in the poor side of the work force. For many years I have gone from job to job struggling to make 18 to 25 grand a year. As a company driver I would average 32 grand a year for less work than I was doing at 18 a year. Minimum wage would bring in just over 15 grand a year flipping hamburgers with a whole hell of a lot more work and much less respect. I am proud to file my income tax at the end of the year and write in the box 75 grand. Business owners out there reading this are certainly going to look at my post and say “75 grand, why would you do so much for so little”?… The answer to that is simple. When you have to start with little or NOTHING you have to settle for little or occasionally nothing… Business owners who are making the big bucks (250 grand or more a year) did not get there in their first year and certainly had a lot more capitol than I had to start my little “one man band”… Now that I have that off my chest… At some point I will certainly use what I have gained to gather more… The trucking industry is not the most wonderful business to be in but it is an EXCELLENT stepping stone to cut a young entrepreneurs teeth on. The profit margin is very tight but this is not to say it is impossible to make a living at it. I would have to ask the question “why would someone stick with this kind of treatment till retirement?”… 75 grand a year is a healthy living for me. It affords me the ability to pay my bills on time and buy the things in life that I like such as a new motorcycle and multiple thousands of dollars on my radio controlled air plane hobby… All in cash might I add….
In closing I would like to state that a savvy business owner will closely manage their debt to income ratio when comparing it to the companies ability to expand. No one is going to get rich in the trucking industry however, with the right planning and more work than one can imagine they can make a very comfortable living free of anxiety about where their next plate of food is coming from or if they are going to be able to make that truck payment this week……
Thanks for the opportunity Brett,
Robert
I’m completely different. I drive a straight truck, not even large enough to require a CDL, but the company I work for just recently lost the contract. The company who picked up the contract has come in and from what we hear decided to keep the majority of us on as employees. From my understanding, this company is passionate about their drivers being O/O and for obvious reasons. This takes the burden off of their back with expenses of fuel, insurance, and everything else. Plus in my business there is also the added danger and cost of in home damage. The problem I’m having is that this new company supposedly wants all of us to buy trucks and move into being owner operators. The deal doesn’t sound bad, and the work would be steady and garaunteed, but you still have the risk of damage, break downs, and all other expected expenses. Anyway, Brett I do respect your opinion and point of view, and no offense but I would really prefer to hear Good and Bad stories from people who have actually owned and operated a truck. It kinda sounds like you’ve owned other businesses and driven trucks and otherwise have just over analyzed the owner operator business. Plus it seems like you’re really passionate about changing other peoples opinions on the matter, which really makes me wonder if you are truely looking at the issue from a non-bias perspective or if you are just trying to debate an issue on a pre-existing notion that you had. Sorry if this was offensive, but I’m scared to death I’m going to loose my job. I’ve absolutely already lost my job as I know it and becoming an O/O is my only option without going into a complete career change. I need real info, real facts, and real stories. A one sided thought of how it could be doesn’t work for me when my finances are at stake.
Hi Mike. First let me say that I do not take any offense whatsoever. I can tell you that I do not benefit, nor do I suffer, if you choose to be an owner-operator or a company driver. I have no stake in pushing anyone towards or away from being an owner-operator. These are just simply my opinions after 15 years in trucking. I have indeed owned other businesses (as I do right now) and because of what I’ve seen in trucking I have never owned a truck, nor would I ever.
I totally understand your concerns – you feel like you have no other options than to become an owner operator or not have a job at all – so naturally you’re hoping I’m wrong and that you can indeed do well owning your own truck. Well, I’m not going to tell you that without a CDL you’ll have no problem finding work driving for someone else – that’s simply not true at all. But I think the question you have to ask yourself is this – “If owning a truck is profitable, why doesn’t the company want to own the trucks themselves? Why do they want me to buy my own truck instead?” That question is the same for any business – why would someone encourage you to get into business for yourself if it’s so profitable for them? Why would they encourage competition and cut their own throats?
To go along with that – the company you’re working for lost the contract to a company that’s going to use owner-operators to haul the freight. Doesn’t that make you suspicious? Doesn’t that make you wonder why your company couldn’t compete on price for that contract but someone who is going to force you to buy your own trucks can do it cheaper? The answer is probably simple – the new company priced the freight so low that they know they can’t make a profit hauling it with their own trucks. But if they can keep a steady stream of owner operators coming through the doors, then they can probably pull it off. Even if you guys haul their freight for a month or two and quit because you’re not making any money – they can just bring in new owner-operators and keep rolling. They don’t need to pay you enough money that you can make a profit – they just need to keep new owner-operators coming through the door. And what happens to this new company if they can’t keep enough guys coming through? Not much. They may lose the contract, but it’s not their money that’s being spent to pay the insurance, fuel, truck payments, and upkeep on the trucks – it’s yours. They’re just a freight broker at that point – they get the freight, pass it on to you, and a take a cut for themselves. If the whole thing eventually collapses, at least they made money while they were at it – no skin off their backs. Then they just move on somewhere else and do it again. It’s a viable and common business model in trucking – it’s happening all over the country right now.
Don’t let your fear of not having a job push you into believing things that simply aren’t true or don’t add up. If something doesn’t seem right – it probably isn’t. If I could buy a truck and make great money hauling freight – I’d buy a million of em and fill em with drivers. But I damn sure wouldn’t encourage anyone else to do it – I’m makin a killin – why would I encourage more competition?
I hope you’ll continue to research this issue before jumping into it. There’s a lot going on with your company and that situation that should be throwing red flags in your mind like crazy. Don’t ignore those red flags. You can ignore your instincts and your common sense, but reality will catch up sooner or later and you can’t ignore being broke when the bills come due.
I appreciate your honesty and I understand your concerns. I’m glad you spoke up – it will give a lot of people the opportunity to learn from the points we’re both trying to make.
Take care.
Brett Aquila
Just signed 1 year lease with Ryder today. My insurance will be on authority by end of week. Be on the road around May 31st 2010 as O/O. I’ll keep you posted as to how things go if you remind me with an email from time to time. I will have broadband in truck.
Yeah, I’d love to know how things go – I’ll shoot ya a message from time to time.