There are a lot of advantages to being an employee driver for a great trucking company. However, there are also advantages in becoming your own boss through buying a truck and moving into the ranks of the owner-operators. Not all owner-operators are going to work independently and many contract with larger trucking companies as lease drivers, which definitely has benefits.
This combination of being on contract or, if you will, leasing your rig and your services to a big company offers a lot of flexibility and options. You can still have greater control over your loads and routes, depending of course on the terms of your contract or agreement with the company. You also have less hassle in trying to book loads, manage clients while on the road and make sure that you are staying on top of marketing and advertising. In some ways it may be the best of both worlds but it is not the perfect match for every driver.
Moving from an employed truck driver to being your own rig owner and operator is a serious decision that shouldn’t be entered into lightly. There are many different factors to consider and not the least is the initial expense of the rig, insurance and all the expenses of starting up a business.
Most people want to start out with a new tractor trailer rig but in the real world this is rarely an option. This is especially true if you are a typical middle income earner that already has the expenses of daily living to contend with. A rig will cost as much as a small home in many areas but, unlike a home, it is not as easy to find lenders that will back you. The actual manufacturers will typically lend to most people that meet financing criteria but they may not have the best interest rates on the loan.
Looking out for best carrier in trucking field? You may want to opt to buy an older rig from a larger trucking company fleet. This is a lower cost option and, if you have worked for the company, you have a good idea of their routine maintenance and vehicle care. There is also the option to buy a rig privately and this option tends to have the lowest overall price. It is also the option that leaves you the least recourse should there be a problem with the truck somewhere down the line.
If you can find a lender or have the credit that allows you to buy the truck you still have to insure the rig. The costs of this insurance will vary based on the types of loads you haul and other factors. Fuel, maintenance, licensing and other costs all come into play and are an ongoing expense that has to be calculated into the costs of doing business.
While you may be able to rely on your own skills to limit your overall expenses the time that you spend doing these tasks is time you aren’t out on the road making money. This needs to be factored into the equation to determine if hiring someone else may actually be more cost effective based on your own particular situation.
One of the biggest problems that owner-operators face is competition with other established freight and trucking companies. These can be smaller family owned businesses that already have a relationship with companies in your area as well as the big fleet companies that are ideally positioned for hauling on a multi-state or national level.
The true issue is pricing and being able to actually make a profit. Since the large companies get huge discounts with repairs, maintenance and fuel they are typically going to be able to offer lower prices to their consumers. Most people, especially when economic times are tough, look for the lowest price.
Small owner-operators don’t get those same breaks on the cost of doing business, which means that to offer competitive pricing with the big companies they have to cut into their profit. Cuts are only possible if they allow you to still make enough to pay for the costs of doing business as well as compensating yourself for your time behind the wheel.
Getting work also means spending some of your time, or hiring someone, to go out and market to businesses. You need to develop a target audience of the types of companies that you want to work for and then aggressively market to them. When they already have a go-to trucking firm you will definitely need to prove to the company that you offer something their existing trucking company doesn’t. This could include lower prices, faster delivery or other perks that make your business more attractive than the competition.
Lease drivers don’t have to do all that, but they still need to find a reputable company to work for. Lease arrangements typically provide additional job security but rarely is the work guaranteed. Lease drivers still have all the expenses of a rig owner. You also may not be able to work outside of the lease agreement, so be sure to read the entire agreement before signing.
Moving from a driver to an owner-operator is not always the best option, but in the right situation it can be the first step to owning your own successful business. Most truckers that make the change have years of driving experience under their belt and have worked to build a great reputation and solid business connections before branching out on their own.