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

Thanks for the opportunity Brett,

Robert

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.

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.

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.