Thinking About Starting My Own Trucking Company

Topic 26229 | Page 1

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Adam P.'s Comment
member avatar

Hi there!

I have been going back and forth for a few years pondering if it was worth me investing my own time and money as an owner operator. Now I know that the competition is tough out there with all the common carriers (Swift, JB Hunt, Schneider etc...) but I cant help feel as though I could be profitable. I have been driving for 20 years with an impeccable driving record of 0 accidents, 0 tickets. My professional license is as clean as the day I first got my drivers license. That said I do know that there is a huge decline in this industry for skilled drivers. Any advice from O/O’s would be appreciated. I’m not looking to do cross country loads but semi local/ regional work. I’ve hauled everything from flat bed loads to gasoline so I’m versatile and equipped to handle most loads. The start up and initial costs to remain profitable are my concerns obviously. After doing the math I estimate it would cost me around 140,000.00/yr to run and operate. I’ve accounted for maintenance, tires, tolls, insurance and registration fees. Again, looking for any feedback that may be out there.

Many thanks

Adam

Regional:

Regional Route

Usually refers to a driver hauling freight within one particular region of the country. You might be in the "Southeast Regional Division" or "Midwest Regional". Regional route drivers often get home on the weekends which is one of the main appeals for this type of route.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

G-Town's Comment
member avatar

Adam, I seriously doubt you want to hear the truth about what you are thinking about...

My advice; think twice. Understand first why the biggest and the best trucking company’s make a 3% profit. In the simplest of terms, if you are a top performing company driver earning 75k annually, with zero business experience; it’s unlikely you’ll be able to pay yourself that and remain solvent. Notice how that was worded; you are no longer an employee, but an employer with only yourself on the payroll.

This topic has been debated to infinity and back. In the end; it’s likely you’ll do what you want and only heed advice from those telling you what you want to hear. No offense, but that’s usually what happens.

Suffice it to say, if your initial bought process were true, most of the experienced drivers in this forum would be Owner Ops,...we’re not. Click on the menu bar in the upper left and look at the blog section. Numerous articles written offering truthful assessments of the path you are considering.

I’m hoping Robert, “The Dragon” will chime-in; he has experience and will shoot straight with you.

Good Luck, Safe Travels.

TWIC:

Transportation Worker Identification Credential

Truck drivers who regularly pick up from or deliver to the shipping ports will often be required to carry a TWIC card.

Your TWIC is a tamper-resistant biometric card which acts as both your identification in secure areas, as well as an indicator of you having passed the necessary security clearance. TWIC cards are valid for five years. The issuance of TWIC cards is overseen by the Transportation Security Administration and the Department of Homeland Security.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Sid V.'s Comment
member avatar

Hi Adam,

Im an o/o operating under my own authority.

I don't know how you haven't heard from everyone in the trucking industry for the past year, but the market has been soft and has been since 2018.

This is not the time to come out here. You can save money right now and plan when the market rebounds, but I doubt it will be anytime soon.

Call insurance companies for quotes on insurance. Insurance rules this industry. I recommend ooida if you have that many years of experience.

Your three major expenses are fuel, insurance, and repairs.

Position yourself to come out when the climate is good for business. And it's definitely not now.

OOIDA:

Owner-Operator Independent Drivers Association

Who They Are

OOIDA is an international trade association representing the interests of independent owner-operators and professional drivers on all issues that affect truckers. The over 150,000 members of OOIDA are men and women in all 50 states and Canada who collectively own and/or operate more than 240,000 individual heavy-duty trucks and small truck fleets.

Their Mission

The mission of OOIDA is to serve owner-operators, small fleets and professional truckers; to work for a business climate where truckers are treated equally and fairly; to promote highway safety and responsibility among all highway users; and to promote a better business climate and efficiency for all truck operators.

Big Scott (CFI's biggest 's Comment
member avatar

Some of the things you give up by becoming an O/O are health insurance. Many O/Os just can't afford it. 401K with company match, and paid time off.

I have a friend who has been driving for over 40 years and has driven everything. He has owned trucks and almost bought a heavy tow company once. He is planning to retire in a couple of years and won't buy a truck. Now he has saved and invested all this time and set himself up for a comfortable retirement. That's much harder to do as an owner operator.

Now if you wanted people to tell you how great it is to own your own truck, you came to the wrong place. We don't pull punches here.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Adam P.'s Comment
member avatar

I genuinely appreciate all the feedback. I am interested in all sides of the conversation, not just the one that feeds my want. I don’t necessarily want to start my own trucking business. I was a company man for a long time. Just weighing options. Again ,thank you so much for the feedback! Be safe out there.

Adam, I seriously doubt you want to hear the truth about what you are thinking about...

My advice; think twice. Understand first why the biggest and the best trucking company’s make a 3% profit. In the simplest of terms, if you are a top performing company driver earning 75k annually, with zero business experience; it’s unlikely you’ll be able to pay yourself that and remain solvent. Notice how that was worded; you are no longer an employee, but an employer with only yourself on the payroll.

This topic has been debated to infinity and back. In the end; it’s likely you’ll do what you want and only heed advice from those telling you what you want to hear. No offense, but that’s usually what happens.

Suffice it to say, if your initial bought process were true, most of the experienced drivers in this forum would be Owner Ops,...we’re not. Click on the menu bar in the upper left and look at the blog section. Numerous articles written offering truthful assessments of the path you are considering.

I’m hoping Robert, “The Dragon” will chime-in; he has experience and will shoot straight with you.

Good Luck, Safe Travels.

TWIC:

Transportation Worker Identification Credential

Truck drivers who regularly pick up from or deliver to the shipping ports will often be required to carry a TWIC card.

Your TWIC is a tamper-resistant biometric card which acts as both your identification in secure areas, as well as an indicator of you having passed the necessary security clearance. TWIC cards are valid for five years. The issuance of TWIC cards is overseen by the Transportation Security Administration and the Department of Homeland Security.

HOS:

Hours Of Service

HOS refers to the logbook hours of service regulations.
Adam P.'s Comment
member avatar

Not at all my friend. Looking for the reality of it all. While the thought of creating and running something that is my own is highly appealing, reality says I have a family, responsibilities at home and to that family to do what’s best for them.

Keep the punches coming!!

Some of the things you give up by becoming an O/O are health insurance. Many O/Os just can't afford it. 401K with company match, and paid time off.

I have a friend who has been driving for over 40 years and has driven everything. He has owned trucks and almost bought a heavy tow company once. He is planning to retire in a couple of years and won't buy a truck. Now he has saved and invested all this time and set himself up for a comfortable retirement. That's much harder to do as an owner operator.

Now if you wanted people to tell you how great it is to own your own truck, you came to the wrong place. We don't pull punches here.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Adam P.'s Comment
member avatar

Thanks so much. I have been trying my hat on the management side of things with small, non cdl fleets working with a localized market. I have been kind of “out of the loop”.

Hi Adam,

Im an o/o operating under my own authority.

I don't know how you haven't heard from everyone in the trucking industry for the past year, but the market has been soft and has been since 2018.

This is not the time to come out here. You can save money right now and plan when the market rebounds, but I doubt it will be anytime soon.

Call insurance companies for quotes on insurance. Insurance rules this industry. I recommend ooida if you have that many years of experience.

Your three major expenses are fuel, insurance, and repairs.

Position yourself to come out when the climate is good for business. And it's definitely not now.

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.

OOIDA:

Owner-Operator Independent Drivers Association

Who They Are

OOIDA is an international trade association representing the interests of independent owner-operators and professional drivers on all issues that affect truckers. The over 150,000 members of OOIDA are men and women in all 50 states and Canada who collectively own and/or operate more than 240,000 individual heavy-duty trucks and small truck fleets.

Their Mission

The mission of OOIDA is to serve owner-operators, small fleets and professional truckers; to work for a business climate where truckers are treated equally and fairly; to promote highway safety and responsibility among all highway users; and to promote a better business climate and efficiency for all truck operators.

Rick S.'s Comment
member avatar

As a 30 year+ small business owner - I can tell you that I've run the numbers multiple times. And the risk:reward ratio just doesn't make sense. The same applied to leasing.

This is not to say that I know a number of people that ARE O/O's (local, interstate under their own MC#'s & leased onto), that are "satisfied" with their earnings.

The notion of owning your own rig, doing it up as you please, picking your loads and working when you want to - is both "somewhat romantic", and in many cases - a fantasy that turns into hard reality. And much depends on your CAPITALIZATION - and whether you decide to lease on (where the company you're leased to, takes on all A/R & regulatory requirements -which can be time/resource consuming, especially when your brokers/shippers think Net 30 is a SUGGESTION).

Expectations and reality seldom line up.

One question would be - how much $$ are you making now (and include bene's and tax benefits of being a W2 wage earner)? How much MORE $$ do you expect you will be NETTING (that is, after tax payments, your own health insurance, and everything else you are now getting as a "paid employee" now).

If you have your heart REALLY SET on it - GO LEASE for a couple of years, to get a "reality check" on what it looks like to be 100% responsible for the expenses involved.

It's not getting ANY EASIER out there. Like Sid says - capacity is UP, especially at the big companies, who can afford to price the small guys out of the market. Rates are DOWN - again, bit companies can even afford to run certain loads at a LOSS and make up for them on other contracts.

Years ago - most rates were well over $2, now they're hovering around $1.50. The main saving grace is lower fuel costs. But if all of a sudden they spike up to $4-5?

In fact - Congress is looking at making the insurance requirement FIVE MILLION (up from one), and if this passes, many O/O's will simply NOT BE ABLE TO AFFORD to run as independents and will be FORCED TO LEASE ON (because the company you're leased onto, typically covers the "trucking liability insurance" end of the equation).

If you are "independently wealthy", and can afford to try it and just WALK AWAY if it doesn't work out - GO FOR IT. Otherwise, be prepared to lose your azz, without losing your home (worst case scenario), or just take on way more responsibility for what might end up being an increase in net that just doesn't justify the additional aggravation.

Rick

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.

Interstate:

Commercial trade, business, movement of goods or money, or transportation from one state to another, regulated by the Federal Department Of Transportation (DOT).

Rick S.'s Comment
member avatar

Some of the things you give up by becoming an O/O are health insurance. Many O/Os just can't afford it. 401K with company match, and paid time off.

I have a friend who has been driving for over 40 years and has driven everything. He has owned trucks and almost bought a heavy tow company once. He is planning to retire in a couple of years and won't buy a truck. Now he has saved and invested all this time and set himself up for a comfortable retirement. That's much harder to do as an owner operator.

Now if you wanted people to tell you how great it is to own your own truck, you came to the wrong place. We don't pull punches here.

And here's another thing Scott didn't mention (not picking on you here brother).

Scott has a sugar problem, just lost his medical card - CANNOT DRIVE until he gets his medical issues straightened out.

Scott is a company driver - so he's home now, and can get another job until he gets well enough to get re-certified (get well soon dude). If Scott owned his truck (or even leased), it's like Goodfellas - "tough feces, give me my f'in money" - when it comes to truck payments, insurance and everything else.

I'm usually real impulsive when it comes to stuff - even though I research every angle to DEATH. I seriously looked at doing this in '12 - business plan approved by my accountant & attorney (spreadsheets, pie charts, the whole magilla), $200K in cash capitalization - and I STILL TOOK A PASS.

The $140 a year "to run" - is probably the MINIMUM CASH ON HAND I would be (barely) comfortable with - JUST TO COME IN (and deduct the cost of the rig from that).

Rick

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

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