Why are the rates higher for an independent, than for on o/o leased to a company ? Is it really worthwhile then, to be an o/o leased to a company, when you consider the marginal difference in the earnings you'd bring home vis-a-vis a company driver for the same company ? Is it possible to be an independent instead, and haul for the very same company ? Would it then pay more ?

Sorry for another post....should have asked this question in the previous post itself : what are the main points of difference between an independent and an o/o leased to a company ?

Leasing on to a company will give you more predictability. You can and will run almost everyday all year if you want. You will find more dedicated runs available that way also. Your own authority will bring more money but less predictable, unless you have good work already set up. That is hard to do when first starting out. Don't get me wrong, there are plenty of loads on the boards, you can work everyday. But you may end up taking a load somewhere you don't want to be because you have to keep the truck rolling.
You can run the boards but you won't have as much of a choice on dedicated area's to run, and you might not get home as much. You can stay close to home and run, but you will find it tough to make more money that way. When leased on to a company, most carriers will let you run under their authority with their insurance,(liability, cargo) therefore decreasing your costs per mile.
You need to figure out the difference in cost per mile to get an accurate figure on the difference of the two ways. :D

An independent is a carrier. He has his own authority. He pays for all expenses including insurance. He also is responsible for making sure all paperwork is in order and that he is in compliance with all rules and regulations concerning his business.

The owner operator leases to a carrier. His main responsibility is pick up a load and deliver it. He also needs to track his expenses and make a profit. His carrier assumes all costs for cargo and liability insurance as well as making sure that the owner operators and drivers under his authority are compliant. The owner operator is dependent on the carrier for his loads. The independent must find his own.

The independent keeps all the money. The owner operator only receives a percentage of the line haul rate. The owner operator typically receives about 75% of the rate. The carrier keeps the rest to cover operational costs, insurance and make a profit.

Re: Independant vs. Leasing onto a Carrier as an O/O
 

Such a blanket statement about amounts....needs to be broke down into refer, flatbed, n dry van.
Not to many places I can get $1.18 in dry van from a company....most offer the standard 90c+25c feul surcharge
Hmmm his .05c more hardly in dry van.....more like 10c t0 20c since no lease carrier wants to pay anything for dry van

Well I'm just commenting on what I heard from Kevin Rutherford on XM Radio. That's why I asked the question. I'm glad independants are making a lot more than $1.23/mile . I may want to be an O/O some day and that's one of the reasons why I asked. I mainly want to do trips that I can do in a day. I haul fuel right now and I may want to get into my own truck. Up here we can haul Super-B's which max out I think @ 63,500 KG's.

Having the insurance and base plates adds up especially if you are under two years on your license. All that came to over $8,000 out of my pocket. That comes to about $150 dollars a week. Of course even 10 cents more a mile x 3000 miles a week is $300 and I'm hoping to make a lot more than 10 cents more a mile compared to what they make pulling reefer/dry van.

It winds up to be the same in the end. The independent is going to spend $2500 for base plates, the leased doesn't pay a dime. The independent has to spent $9000 a year for insurance, the leased doesn't, they spend about $3500. The independent doesn't get detention pay, the leased does. The independent doesn't get paid for deadhead miles, the leased does. The independent has to pay for a trailer and maintaining the trailer, the leased doesn't, they use the carrier's. The independent has to pay full price at the pump for fuel, the leased saves at least 12 to 6 cents a gallon. The independent has to pay for tolls and doesn't get reimbursed, the leased gets reimbursed or has Pre-Pass Plus. The independent has to pay full price for tires when needed, the leased doesn't, gets discount with National Tire Account. The independent has to pay out of pocket for a lumper, doesn't get reimbursed, the leased pays with a Comchek but does get reimbursed. The independent has to chase after the brokers to get paid, hopefully they don't close up shop in the middle of the night and run off with your $$$, the leased gets paid weekly. The independent has to look for a load, the leased doesn't, usually has a pre-plan before being unloaded or a few hours after they are empty. The independent has to wait to be live load/unload, most of the time the leased is drop and hook. I'm sure there are other comparisons, that I will add later.

How do I know all this you ask?

I've been on both sides of the coin, I am not saying one is better than the other, I am just making a point that it all equals out in the end IMO.

It all comes down to how much, and what kind of B/S you want to tolerate.

Since we do not live in a perfect world your situation may not compare to my examples or apply to you. I am not saying these are the gold standards of being a O/Op, just my opinion of what I have experienced.

Now when I say leased, I am referring to my situation of a paid off truck leased to a carrier, not a lease purchase plan, so my gross and net might be different than someone else's.

Now we are going to get a bunch of posters that are going to pick this post apart, piece my piece, but do I care?

No, Why should I?

What ever path I chose works for me, may not work for you, but that's why we are individuals.

Drive safe.

what does?

That's probably the average numbers, but everybody deal's with his particular situation.
You could do better than that, or worse, believe, what you want to believe, but at the end of the year, you'll look at your odometer, and bank account....
Moment of truth! :wink: