O/O In Trucking Vs In Hotshoting

Topic 24163 | Page 1

Page 1 of 2 Next Page Go To Page:
George P.'s Comment
member avatar

Hello, and happy new year.

I have a question regarding being an O/O in trucking vs hotshoting.

I'll give you a little background so you can better see where I'm coming from.

My brother in law is an O/O car hauler (now on a hotshot rig) and has been trying to convince me to get into it too, supposedly the money is so good, nothing under 5000$ (more even) a months after expenses have been deducted. I was always a bit wary and surprised at his supposed income as even where I live (Norway, I'm a dual citizen) that is good money. But my wife insists it must be true and I was getting tired of my old job. He of course offers to tutor me through it and all, even buy back my truck if I don't like it. So I was an inch away from buying a used (80'000 miles) dodge ram and a one year old 5 car Kaufman trailer (for about 45'000$), buying a ticket to his place and start getting my CDL.

Before that however, I read Brett's book, came to the forum and saw the his and Old school's posts/articles on becoming an O/O. That of course got me thinking. They were parallels between what they were describing about O/Os usual talk: obsession about how much money they gross over a short time frame (week), vagueness about overall costs over the a year or two etc... and my brother in law. In his case things were made harder to assess accurately because of his situation though:

He had first started driving 5 years ago for a friend getting maybe 2000-3000$ a months, then a couple years ago he bought a tractor (with 1000'000 miles) and a used trailer. He put 500'000 more miles on it and made money with all the runs but even he admits he didn't make much profit overall because of the big repair bills he incurred. So recently he bought a brand new Ram 5500 and 5 car hauler and says that on his first month he made 5000$ profit while only driving three weeks. He assumes things will continue this way.

His argument for why I should follow his model rather than being a company driver is that if I become a company driver I won't make so much money the first years (I plan to drive 3 years OTR , then take a break, stay with my with my family and maybe come back to trucking later). Whereas if I have my own rig and work hard I could make nearly double the money each months. He adds that getting your CDL will be easier and shorter and it will be a lot easier to maneuver my 5 car hauler than a full length trailer.

So my question is as follows: Do all the well laid arguments made on this website against becoming an O/O apply equally in the context of a smaller hotshot rig? Or is the situation different because it's some kind of a niche market that mega companies with all the advantages they usually hold over independent owners don't touch. My feeling is always if it's such good money, why isn't everybody doing it? but maybe I'm missing something.

Any input is appreciated.

CDL:

Commercial Driver's License (CDL)

A CDL is required to drive any of the following vehicles:

  • Any combination of vehicles with a gross combined weight rating (GCWR) of 26,001 or more pounds, providing the gross vehicle weight rating (GVWR) of the vehicle being towed is in excess of 10,000 pounds.
  • Any single vehicle with a GVWR of 26,001 or more pounds, or any such vehicle towing another not in excess of 10,000 pounds.
  • Any vehicle, regardless of size, designed to transport 16 or more persons, including the driver.
  • Any vehicle required by federal regulations to be placarded while transporting hazardous materials.

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.

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.

Fm:

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.
Grumpy Old Man's Comment
member avatar

“He assumes things will continue this way.”

That is a very big assumption.

The same arguments apply, the only difference is the repair bills and equipment replacement costs are potentially lower than with a semi. Everything else should apply.

Insurances, taxes, and all the other costs of running a business would apply. And if the truck isn’t moving it is just costing you money.

At $5,000 per month, he is right in the ballpark of a company driver. Why have all the stress and risk to potentially make a couple hundred a week more?

Are these new cars? If so, what happens when there is a sales slump? A strike? What if GM really does go bankrupt, as many think is inevitable? All your eggs are in one basket. At least with driving a semi, if your source of freight goes under or has a slump, you can always move something else.

Old School's Comment
member avatar
My feeling is always if it's such good money, why isn't everybody doing it? but maybe I'm missing something.

I don't think you're missing anything. That is an excellent question... "Why isn't everybody doing it?" For what ever reason (and people can really concoct some) small time operators really like to think they've discovered this golden gem that nobody knows about. From the numbers you gave, I'm doing better than your brother in law as a company driver. I'm not even including the additional financial benefits I get like insurance and matching investment funds or paid vacation time.

George, the problem with getting into trucking is the great learning curve. None of us are naturals at this, and most new truck drivers blame their low pay on their "greedy" employer. The next thing they start thinking is, "I could make a lot more money if I'm the owner." The truth is that they just need to commit to developing themselves as a professional. It takes a little time to develop the "street smarts" that professional drivers employ in their daily practices. Success at this doesn't come overnight. It involves commitment and dedication. I am a long time business owner, and I have never been able to put a business plan together that would convince me that there's any worthwhile benefits to being an owner/operator. That includes the "hot shot" business.

Good solid company drivers can do very well without laying out tons of capital or taking on the many risks involved in this enterprise. If you're interested in this career, get started as a company driver and get about three years experience under you. If the entrepreneurial bug is still biting you, then you might be able to keep from losing your shirt at that point. You won't be making a lot more money, but maybe you'll be able to keep from making less. You'll also have the vantage point of seeing what's happened with your brother in law by that point in time. That will be the most telling evidence, and I'm willing to bet it will confirm everything I'm telling you.

Errol V.'s Comment
member avatar

George, if you've read at least Brett's book, Becoming A Truck Driver: The Raw Truth About Truck Driving, you can understand the life and career of a company driver. There are other articles on this site describing the life of O/O, and these issues are nearly the same for a hotshotter with an F350 Diesel pickup.

Your questions, my opinions:

Do all the well laid arguments made on this website against becoming an O/O apply equally in the context of a smaller hotshot rig?

Yes, both the rewards, expenses, and risks are similar but on a smaller scale.

some kind of a niche market that mega companies ... don't touch

It's a matter of scale. Shipping three air conditioner units on a big flatbed would just cost more than the shipping tarrif.

if it's such good money, why isn't everybody doing it?

Anesthesiologists pull down a nice living. Let's all pass gas! #1, there's more to life than making moolah. And #2, competition would soon bring the profit ratio down to the now current 2-3% return on investment the Bigs have to deal with, if it already isn't at that point. #3, I'll use the word "bluster" to describe claims of good money without showing the evidence and the accounts to prove it.

OWI:

Operating While Intoxicated

Bobcat_Bob's Comment
member avatar
he made 5000$ profit while only driving three weeks

I find that incredibly difficult to believe, even if it is correct it would be extremely unlike to happen every single month.

$5,000 a month is roughly $60,000 a year, 2018 was my first full year as a company driver I made exactly $75,000 now granted I run linehaul so the pay is a little higher than some OTR positions, but I have good insurance, 401k and no expenses should I breakdown. Infact I did breakdown in a 2019 tractor, I called our company breakdown number they sent a tow truck out, I was towed back to my terminal where I jumped in a different tractor and finished my run. The tractor that I broke down in spent a week and a half at the dealer l, could he afford to not have his truck for a week and half? That doesnt take into account any tow bill or repair bills not covered under warranty.

Realistically you could make $5,000 a month being a half way decent company driver probably in a year or two, with 0 risks.

Terminal:

A facility where trucking companies operate out of, or their "home base" if you will. A lot of major companies have multiple terminals around the country which usually consist of the main office building, a drop lot for trailers, and sometimes a repair shop and wash facilities.

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.

Linehaul:

Linehaul drivers will normally run loads from terminal to terminal for LTL (Less than Truckload) companies.

LTL (Less Than Truckload) carriers will have Linehaul drivers and P&D drivers. The P&D drivers will deliver loads locally from the terminal and pick up loads returning them to the terminal. Linehaul drivers will then run truckloads from terminal to terminal.
Steve L.'s Comment
member avatar

George, you obviously are an intelligent thinker. Trust your gut on this.

As a company driver, getting paid by the mile, I could tell you of the weeks I’ve done 3,000+ paid miles. But that doesn’t mean I do 150,000 miles a year. Likewise, an O/O can say they made $5,000 net in three weeks. But does it make sense that translates into $600,000 a year? I’d be surprised if that same O/O nets 20% ($120,000) of that.

Also, you said you only planned on driving 3yrs before taking a break. I think it’s unrealistic to expect that plan to be successful. You might be able to do it and I’d be happy to hear of your success. But the first year is a lot of learning. You don’t know what challenges you’ll have to overcome. Heck, some days just turning 600 miles without hitting anything is an accomplishment.

You sound very smart. Keep that open mind, but never lose that BS detector in yourself.

Steve L.'s Comment
member avatar

Sorry for my decimal mistake here.

Likewise, an O/O can say they made $5,000 net in three weeks. But does it make sense that translates into $600,000 a year? I’d be surprised if that same O/O nets 20% ($120,000) of that.

Suffice it to say you can make $60k/year as a company without the headaches of O/O.

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.

Bird-one's Comment
member avatar

Another thing to consider is insurance. If I understand it right you will have a hard time finding coverage hauling cars if you have no previous experience doing it. Any coverage you do find will be sky high. I could be wrong though. Something to double check.

George P.'s Comment
member avatar

Grumpy Old man,

I think most of the cars are privately owned (POV) or belong to some dealership. New cars are a very small minority. I don't how "volatile" that segment of the market is, but definitely something to consider.

Old school,

That's also the direction my thinking has been going: at least be a company driver for some years before anything else. Almost seems like common sense. One thing to consider in my case though as I never lived in the US is how easy it will be to secure a job with a company; I never had a car accident or had any kind of police problem but there will be no way for me to prove that to them as all that data is in Europe. Months might be wasted in a fruitless job search, whereas with the Hot Shot option, I can get straight to work.

Errol,

I have read Brett's book, that's how I ended up here. Very useful read indeed. In the book he comes out strongly against becoming an O\O but makes one small exception in case you have a family member to coach you through, which applies to this situation. Reading his comments on the forum since, he seems to have hardened his stance though.

Bobcat,

And that was for November, he says he made 7000$ in December. His father in law, who's also doing the same business (they're tightly knit group of Asian immigrants) says he turned in 70'000$ this year. To me it seems like they're forgetting to include some expenses in their accounting, or they were very lucky lately with no major breakdowns. But as an outsider how can I tell for sure.

Steve,

I guess that's what it all boils down to: why take all the risk and extra stress of being an O/O when you can earn similar money working for a company. The problem here is that they claim to make somewhat more than the average company driver. I know that Old school and Bobcat make similar or more money but both are outliers; average salaries for beginner or even veteran drivers are significantly below theirs. And while I certainly intend to do my best and use all the advice laid out in this website to be a good driver, at a planning stage, I prefer to be conservative and use averages to project potential earnings. The crux is I suspect there must be at least some "O/O math" involved in their figures, but I can't prove it. Part of the reason I started this thread was to get some solid counter arguments to present my wife who is falling for the ''why work for a company and get 30'000$ your first year when you could earn double that if only you bet on yourself" line...

Brian,

From what I understand you can get coverage (many of these guys had to start somehow) but it probably will be very high the first year.

Old School's Comment
member avatar

One thing to consider... most of the states require one year of driving in the U.S. with a regular driver's license before you can even apply for a Commercial Driver's License.

Page 1 of 2 Next Page Go To Page:

New Reply:

New! Check out our help videos for a better understanding of our forum features

Bold
Italic
Underline
Quote
Photo
Link
Smiley
Links On TruckingTruth


example: TruckingTruth Homepage



example: https://www.truckingtruth.com
Submit
Cancel
Upload New Photo
Please enter a caption of one sentence or less:

Click on any of the buttons below to insert a link to that section of TruckingTruth:

Getting Started In Trucking High Road Training Program Company-Sponsored Training Programs Apply For Company-Sponsored Training Truck Driver's Career Guide Choosing A School Choosing A Company Truck Driving Schools Truck Driving Jobs Apply For Truck Driving Jobs DOT Physical Drug Testing Items To Pack Pre-Hire Letters CDL Practice Tests Trucking Company Reviews Brett's Book Leasing A Truck Pre-Trip Inspection Learn The Logbook Rules Sleep Apnea
Done
Done

0 characters so far - 5,500 maximum allowed.
Submit Preview

Preview:

Submit
Cancel

Join Us!

We have an awesome set of tools that will help you understand the trucking industry and prepare for a great start to your trucking career. Not only that, but everything we offer here at TruckingTruth is 100% free - no strings attached! Sign up now and get instant access to our member's section:
High Road Training Program Logo
  • The High Road Training Program
  • The High Road Article Series
  • The Friendliest Trucker's Forum Ever!
  • Email Updates When New Articles Are Posted

Apply For Paid CDL Training Through TruckingTruth

Did you know you can fill out one quick form here on TruckingTruth and apply to several companies at once for paid CDL training? Seriously! The application only takes one minute. You will speak with recruiters today. There is no obligation whatsoever. Learn more and apply here:

Apply For Paid CDL Training

About Us

TruckingTruth was founded by Brett Aquila (that's me!), a 15 year truck driving veteran, in January 2007. After 15 years on the road I wanted to help people understand the trucking industry and everything that came with the career and lifestyle of an over the road trucker. We'll help you make the right choices and prepare for a great start to your trucking career.

Read More

Becoming A Truck Driver

Becoming A Truck Driver is a dream we've all pondered at some point in our lives. We've all wondered if the adventure and challenges of life on the open road would suit us better than the ordinary day to day lives we've always known. At TruckingTruth we'll help you decide if trucking is right for you and help you get your career off to a great start.

Learn More