Leasing...here We Go Again! Merry Christmas!

Topic 23932 | Page 2

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Derrick B.'s Comment
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The payments are high and there is little hometime, but its not providing Prime with 2 trucks for every one leased.

Thank you for the breakdown Rainy! I don't know what backward math I did while I bitterly looked at a settlement one day, but I always had it in my head that Prime was fleecing me worse than that.

Untrue. You as much as admitted it yourself when you said you only turned down one load. Load acceptance is generally based on revenue when you are a lease op. Some loads pay better than others, and as you know, turning down loads will put you in bad standing with your dispatcher. That fact along with the never-ending weekly payment forces you at some point to take the load and keep moving.

I route my self every day. I can't count how many times I've taking the Tappan Zee instead of the GWB.

Not only does my dispatcher not give a hoot on how I get from A to B, he's also often impressed by my ability to avoid weather, traffic jams, and other delays through my navigational prowess. As long as it gets there safely and on time, they simply don't care.

Thanks, Turtle for the reasonable response and rebuttal. On the forced dispatch you're exactly right. I never felt like I was in a position of luxury where I could just pick and choose at my whim and my dispatcher certainly didn't see it that way either.

On the routing yourself that's good to know! I am coming at this from the perspective of having never been company myself and being trained by two lease drivers, so I'm only familiar with that side of things. To what extent can you go the way that you'd like though? I had a load one time where I had to go 100 miles over very annoying mountains on the WV/MD border to pick up and then back out that way again very heavy. It was something like 50 extra flat miles to instead head north and go thru Ohio then take 90 across to where I was going. Are you free to make a call like that or would that mess up your fuel routing so no go? Kind of an extreme example just wondering.

Derrick, thanks for the run down! You were pretty convincing against leasing, all while extolling the virtues of it.

Are you still leasing?

I can tell you understand the concepts of performance based pay, you'd have to as a successful lease operator. Are you taking advantage of Prime's accounting to help you see how you are actually coming out? Now that your first year is on the books, what kind of number will you be putting down on your income tax forms as your income? That is really what will determine how you were doing. It's really difficult to use your weekly revenues as a lease driver as a measurement for how much you're actually earning.

I'm not trying to provoke you, I'm just curious. You seem to have a genuine desire to put out accurate information. I realize you're probably making better than some drivers, but what about the ones making around 80 thousand dollars per year? Are you exceeding that kind of income? I'll make that kind of money this year with full benefits including three weeks paid vacation time. There are some company drivers who exceed my numbers.

Hey Old School, thanks for the write-up and the questions without just dismissing my experience. I'm not leasing now no, I am the one in the other post who recently got the local job hauling Poland Spring out of Maine. In the end, the juice wasn't worth the squeeze for me OTR at this point the way I was running.

I am using Abacus CPA, the firm that operates out of Prime. I only have statements from last year and they are only for the tail end since I got my own truck in September, but for September, through the end of the year, I net 30k. Extrapolated out, and accounting for the fact that maybe those 4 months were very good months, I am sure I came close to that 80k. Now is it with full benefits and 3 weeks paid vacation? No sir. And I'm sure you went home more than me on top.

Brett, all the points you make are spot on of course. It really doesn't make more sense that a company would offer a way for certain employees to take a significant amount more profit away from the company for no reason. I'm not trying to be an advocate one way or another like I've said before, I'm just putting out the way that I saw things. And if they're incorrect I'll admit to them like I've done here a few times in this post. I just wanted to give a little insight and show that you can go lease and everything will be ok. You can make money. You won't lose your shirt to the company. Like I said before is it worth it? Probably not, but it isn't an impossible task to make it work for you in some facet.

And Robert, calm down guy. If it isn't worth it to you don't do it. I'm not here to convince you of anything sheesh.

Look forward to the jab back from everyone!

OTR:

Over The Road

OTR driving normally means you'll be hauling freight to various customers throughout your company's hauling region. It often entails being gone from home for two to three weeks at a time.

Dispatcher:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

Dm:

Dispatcher, Fleet Manager, Driver Manager

The primary person a driver communicates with at his/her company. A dispatcher can play many roles, depending on the company's structure. Dispatchers may assign freight, file requests for home time, relay messages between the driver and management, inform customer service of any delays, change appointment times, and report information to the load planners.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.

OOS:

When a violation by either a driver or company is confirmed, an out-of-service order removes either the driver or the vehicle from the roadway until the violation is corrected.

Old School's Comment
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You see Derrick, I don't accept extrapolated numbers. I think you know it unlikely that you were going to make 80 grand. I'd never quit an 80 grand job for a possibly 50 grand job, but that's just me. I know you've got your reasons, but you'd be the first rookie lease operator I've ever come across who managed an 80,000 dollar income. If you're that good, you need to stick with it. I mean, you were squeezing the juice, and you didn't know it.

Rainy D.'s Comment
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About the routing...i go whatever way i want and i cant answer how far because no one has ever complained and i still have always gotten a fuel bonus. to avoid bad weather i ha e chosen to go over Vail instead of WY. i sometimes message dispatch and tell them if its that far but always get 10/4 thanks.

there are so many myths about being a company driver because most lease ops have never been. we use the same macro 27 lease ops do so all i need to do is run the 27 again once im on a different route.

the trainees hear rumors from their lease op trainers then pass that on down to their future students.

my lease op boyfriend was amazed at how much freedom i get...and good loads too. now he tells his students "if you want to go company listen to her dont listen to lease ops who never did it."

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Derrick B.'s Comment
member avatar

You're right indeed Old School I do have my reasons. Certain things are worth more than any amount of money in the bank, like relationships, family, and health. And I don't necessarily want 80k to be the number I'm planting my flag on. Maybe it's more and maybe it's less. If it ended up being 50k which it certainly isn't, then that's fine too. 80k as a company driver is crazy though, congrats on a great year! That's an average of 3100 miles a week for 52 weeks at 50 cents a mile. Machine numbers. You're flatbed though, no? So maybe tarp pay and stop pay and things add up to a good chunk as well bringing those numbers down.

Good to know Rainy. I guess disregard any of my so-called "perks" of leasing then. I'll bow out as the representative whipping boy on the topic since I don't have much ground to stand on it seems.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Robert B. (The Dragon) ye's Comment
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Derrick, 80k a year in this industry as a company driver isn't very difficult. Especially in flatbed which opens up so many other opportunities. Our average drivers make 80k, i'm personally on pace to do just shy of 90 and our heavy haul guys average around 125k, all company drivers.

Brian's Comment
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Strictly out of neutral curiosity. It is said no company would do such a thing if it didn't benefit them. So it what ways does having O/O and l/O's benefit them?

G-Town's Comment
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Strictly out of neutral curiosity. It is said no company would do such a thing if it didn't benefit them. So it what ways does having O/O and l/O's benefit them?

Reduced liability, almost no maintenance cost are charged back, reduced downtime costs, reduced deadheading costs, no payroll tax, lower equipment costs, no HR burden,...to name just a few benefits.

All equate to a higher per mile profit for the carrier.

Deadhead:

To drive with an empty trailer. After delivering your load you will deadhead to a shipper to pick up your next load.

Grumpy Old Man's Comment
member avatar

double-quotes-start.png

Strictly out of neutral curiosity. It is said no company would do such a thing if it didn't benefit them. So it what ways does having O/O and l/O's benefit them?

double-quotes-end.png

Reduced liability, almost no maintenance cost are charged back, reduced downtime costs, reduced deadheading costs, no payroll tax, lower equipment costs, no HR burden,...to name just a few benefits.

All equate to a higher per mile profit for the carrier.

Dead on. The costs of having employees is exactly why I closed my business. I was at the point that the only way to grow was to hire more technicians and sales people and start advertising. Otherwise I was at a brick wall making a decent salary but never really getting ahead.

I decided it didn’t want to keep doing it by myself for a variety of reasons including the money, and at this point in my career I didn’t want to take on the risk of adding employees and all that that entails.

Having employees basically doubles the payroll after everything is figured in.

So Brett’s one single point

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is exactly why I knew as soon as I saw that companies would lease you a truck that it was a bad idea. I didn’t even need to see figures.

I’m sure Prime and all the other companies that lease trucks are great companies that value their employees. But let’s face it, there is only one reason to run a business with all the risk and headache that it entails, and that is to make money. As much of it as possible.

There is no way any trucking company is giving up profits out of the goodness of their hearts, regardless of how great a company they are. It benefits them, or they wouldn’t do it. Period.

Deadhead:

To drive with an empty trailer. After delivering your load you will deadhead to a shipper to pick up your next load.

Doubles:

Refers to pulling two trailers at the same time, otherwise known as "pups" or "pup trailers" because they're only about 28 feet long. However there are some states that allow doubles that are each 48 feet in length.

DAC:

Drive-A-Check Report

A truck drivers DAC report will contain detailed information about their job history of the last 10 years as a CDL driver (as required by the DOT).

It may also contain your criminal history, drug test results, DOT infractions and accident history. The program is strictly voluntary from a company standpoint, but most of the medium-to-large carriers will participate.

Most trucking companies use DAC reports as part of their hiring and background check process. It is extremely important that drivers verify that the information contained in it is correct, and have it fixed if it's not.

Turtle's Comment
member avatar

A routing example for ya:

I often pick up at a shipper in Wallingford, CT and deliver to Central FL. I've probably made that run a dozen times by now.

Company routing directs you down 91 to 95, then allllllll the way down to FL. That is the route from hell. I won't do it. That 95 corridor through Bridgeport, GWB, NYC, Jersey, Philly, Baltimore, DC, Richmond etc is brutal.

Instead I go north from the shipper up to 691, which brings me over to 84, 684, jump over the Tappan Zee on 287, run that down to 78 and then on to Harrisburg. From there it's 81 down to 77 down to 26 in Columbia, SC which brings me back to 95. The only traffic I hit on that route is Charlotte.

It's approximately 75 miles longer to go my route vs the company's. But it's a nice calm relaxing stress-free route, one that avoids all that 95 traffic, not to mention the potential for accidents. The company has never said a word to me for doing this.

Shipper:

The customer who is shipping the freight. This is where the driver will pick up a load and then deliver it to the receiver or consignee.

Old School's Comment
member avatar
So it what ways does having O/O and l/O's benefit them?

Brian, in business it's the unexpected surprises that can hurt you the most. Some of the most detrimental variables in any business are their fluctuating costs. Any time you can cut down your unexpected surprise expenses you can better know how much to charge for your services so that you're making a profit.

Most businesses have "fixed costs" like "rent." For example, we can know it's going to cost us 3,800 dollars per month to rent this office building. They also have "variable costs" such as "vehicle maintenance." Maybe one year we spent 2,900 dollars on truck #409, but another year it had a lot more problems, and we spent 18,085 dollars on it. Can you see how it helps to have Owner/Operators and lease operators with that small example?

Anytime you can reduce your variables, you will increase your likelihood of being profitable by reducing your exposure to risk. You pass those variables off to your workers by having them work as independent contractors and you avoid being required to handle the expense of processing payroll and those pesky taxes associated with a payroll. You still pay them, but you've reduced a lot of expenses and liabilities by doing it through contracts as opposed to payroll.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
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