Stay leased or get own authority????
 

I have been a leased o/o for the past year, and I am thinking about getting my own authority. I take care of everything (fuel tax, ins, etc.) myself with the company I am with, so it seems like it wouldn't be much extra to go to o/a. I feel like different people are skimming off the top of my paycheck when I do most all the work.
Any suggestions? Is it worth it? I know I would need cargo ins, and some kind of DOT number- anything else? What is the best way to find loads?

When you get your authority you will be issued a dot number. The filing fee for authority costs $300, but there is no charge for the dot number. As you know, you will need cargo and liability insurance. You will also need registered agents in all states in which you do business.

If you don't have any shipping or broker contacts, you can use load boards.

Re: Stay leased or get own authority????
 

It is worth it to me. It offers the opportunity to not only make more money running my own authority, but also the flexibility I need for things at home. If I leased to a carrier, it would be difficult to take the time off that has been necessary the last several years. There are a couple of things you need to be aware when you run your authority. First, you no longer have a safety net. That can be very stressful for some people, especially when they have been accustomed to having a carrier for the bank, find loads and staying compliant. You are not responsible for paying all the bills, filing all paperwork and making sure you are compliant when you are leased to a carrier. I don't mind not having the safety net. In fact, I prefer it. I have almost always been in business for myself. It is more stressful for me to work for someone else than run my own business. I guess I just prefer to be in control of my life and livelihood.

Second, is finding good paying loads. This can be especially challenging in some areas of the country and when we are in a down economy, such as now. When you are leased to a carrier, they usually assist you in finding loads. Running your authority requires you to do your own searching for loads and negotiating rates. Judging from your question about finding loads, I gather this is not something that you have been accustomed to doing yourself. This takes time to learn, especially the negotiating. Some people detest negotiating rates, while others enjoy the challenge. There are some independents and owner operators who will take the first load offered, no matter what the rate. When you are on your own, there is a tendency for some to get scared and want to keep the wheels turning, no matter whether the load is profitable or not. This is a primary reason rates are as low as they are in some areas.

There is also another factor some forget. You will take on additional expenses running your authority as opposed to leasing to a carrier. Some carriers pay for base plates and permits, tolls, fuel taxes, etc., When you get your authority all of those costs become your responsibility. There are also other costs, such as joining a drug consortium for your random drug testing. This is Federally mandated. It can cost as much as $150/year to belong to a consortium. All of these costs add up. I am not going to tell you which way you need to go. Only you can decide which is better for your situation. I would advise you to have a good nest egg set aside before jumping into running your authority. There are factors who will purchase your receivables and some brokers offer a "quick pay" option for early payment, but it takes money away from the rate. It can help finance your business. Many of the largest corporations in the country use receivables financing (factors) to grow and finance their business. It is a good idea to have sufficient funds available or credit that you can pay for a major break down, should it occur. Hopefully, nothing will happen, but a good businessman plans for contingencies. Always plan for worst scenario.

When you lease to a carrier, they handle all the paperwork, compliance and other issues related to running the business. Most will also have someone available to help you find loads. We all have a comfort level. It is a matter of finding at what level you are most comfortable. I don't know to whom you are leased, but there are carriers who pay percentage and offer the freedom running your authority offers without some of the perceived risks. Mercer, Landstar, CRST Malone and Jones all pay percentage and offer the flexibility similar to running your own authority. Some provide more support than others. Out of the ones listed, Landstar probably is the nearest to running your authority. Of course, for the support they offer you will give up some of the profit. Keep in mind that all of those carriers I listed also have brokerage departments that you can do business when you run your own authority. Other major carriers, such as Schneider, Covenant, JB Hunt and others also have logistics or brokerage departments where you can book loads.

I have a couple of friends who previously owned trucks and decided to give it up and lease on to a carrier. One had 16 trucks, at one time. There have been quite a few who have elected to get rid of their authority and have a simpler life. The guy who had 16 trucks decided to give it up due to all the stress. He is actually happier this way than when he ran his authority. He doesn't kill himself. He has a couple of trucks and trailers that are paid for. He is content making about $80,000 clear. He takes off when he wants and runs as he wishes. It works best for him.

I've heard LandStar is a great way to run L/O. I hear they get great paying loads, but I hear there is a bit of a seniority involved in getting the best loads.

I don't know, just some of what I have heard. It still looks good to even a beginning O/O, and I'm sure guys with much more beginning experience will get the loads.

From what I see, they do a nice job of spelling out the contract, and itemizing everything, from trailer allowance, tractor, and your normal deductions. You can draw a 30% down payment, and get paid the rest after load is complete.

I'd like to find out more. I'm starting to think in that direction myself.

Doesn't Landstar require Hazmat for their van drivers? I thought I seen that on their website.

Landstar has good and bad paying loads. I have known some owner operators who have done well and been with them for a number of years. I have also met some who have lost their shirts. Whether an owner operator does well with Landstar is pretty much dependent on the owner operator. I think they do a good job of helping a new owner operator calculate his actual operating costs. They used to give new owner operators a work sheet that you could use to calculate your operating costs. The key in doing well with them is to find those agents who have the better paying loads. Not all loads are posted. Getting the better paying loads doesn't necessarily have anything to do with your seniority with the carrier. If you pick up and deliver on time and without claims, then you will find yourself being offered better paying loads. Landstar agents are like independent brokers. You can do some negotiating with them. You don't have to take any load you don't want.

I don't know that I would lease to them again should I decide to head in that direction. They are pretty anal about logs and a few other things. In some respects, they treat owner operators like company drivers. In others, they want you to operate as independent businessmen. An advantage Landstar has is that they have a very large shipper base. A disadvantage is that some of their agents are double brokering and competing for the same loads, which lowers the rate.

It can take a while to get approved with them. They have little tolerance for those who don't do things exactly as they want. There are other carriers that might also work for you. They do charge for everything that they do for you. They don't pay on 100% of they line haul. They pay on 98%. That was always a sore spot for me when I leased to them. Still, you can make money with them if you apply yourself. There is a learning curve of about 5-6 months.

I believe they require hazmat for all drivers, regardless of the type of trailer you pull. They will occasionally have hazmat you can haul on an open deck trailer.

Hazmat endorsement;
I was trying to figure that out. They do require it on company drivers, and I was trying to see if they required it of O/O.
I have always kept my endorsement, but rarely ever need it. It's one of those things though, if you have it, you stand to keep yourself open to more loads. Whether or not you make more money because of it...I doubt it.

http://www.truckdrivingjobs.biz/truc...r_benefits.htm

Landstar doesn't have company drivers. They are 100% owner operators. They do have some fleet owners who lease trucks to them. Whoever drives the truck must have the hazmat endorsement or they won't approve them.

I see them hauling a lot of tanks for the oil fields. Now that would be some good bread I think.

I think if I were to go O/O with them...I'd want to specialize with a 3-axle step deck, and look for those Oil Field loads. N. Dakota would work good for me.

Anyway, what you mentioned about them being very strict on who they hire, and want only drivers that fall into their business model, is what I heard about them before. But that would scare me too much. I'd just hope to find good brokers I can enjoy working with.

My bad...I read the company profile wrong on this site.
http://www.classadrivers.com/truckin...es.php?Cid=136

Funny you should mention a 3 axle step deck. I ran into one of their BCO's a few weeks ago when I was pulling an over-sized load. He says that he is doing very well with them with the 3 axle. I don't recall him mentioning his average rate. Before I would go out and start buying trailers, I would check with some of their agents to see what would work best. You could get a 3 axle with a lift. Those are a little more versatile, but you will pick up some added weight. Some of their more specialized people seem to do pretty well for themselves. One thing to remember with Landstar is that some of their agents have freight in other parts of the country other than where they are located.

Thanks for the replies. I was just asking because I run for a fellow that has 10 or so trucks and he also runs with us but I see it as 2 or 3 people taking there cut before I receive mine. I basically run everything now, I pay for the baseplates, taxes, and everything else. The guy I run for gets his loads for JB Hunt and Werner. It just bothers me that other people are making money off of me. But yeah, the only thing the guy I run for does for me is pay for cargo insurance and find my loads, I do everything else. Thats why I was asking if I should just take that next step and get my O/A? The only thing I'm worried about is finding good loads. I was hoping to find something dedicated. Anyways thanks for all your time, I really appreciate it.

I would look at what you are getting and how much money you are making. If you are happy with what you make then you could stay where you are now. It can take time to find the better paying loads. Most of the time you can find loads, but the better ones can take more time. Where a lot of independents get into trouble is the paperwork. Most detest that part of the business and procrastinate. It can later get them into trouble. Your IFTA must be filed in a timely manner or you can be fined and ultimately lost your IFTA certificate. If you do your paperwork along it isn't too bad.

When you run your own authority you need to know what areas to stay out of due to the cheap or limited freight availability. If you pull a van, there are some brokers that have dedicated freight from time to time. Sometimes they only require power. Do you currently pull your own trailer? If not, that is something you will want to buy when you run your authority.

I didnt want to buy a trailer but if it makes it easier then I will do it. How would I go about finding loads? Would I call the companies themselves or should I trust a broker? I dont think it should be this complicated. I used to run for fed-ex national here in Pa. and when I let my customers know I was leaving to become an owner operator they told me to let them know if I need work. I just thought they were saying that to be nice but now that I'm thinking about getting my o/a I dont know. Either way I live in central Pa. there should be plenty of work I can find on my own. Maybe I'm wrong. Thanks for all the help.

Pennsylvania is a good area for freight. I have a friend who lives in central Pennsylvania who does very well leased to a carrier and he is home most weekends. He runs from Illinois to New Jersey and upstate New York. It will be difficult for you to run your authority and not own a trailer. You may find some power only loads, but they aren't going to be as profitable as something with a trailer. If you have shippers who will give you loads, that would be great, but you will probably need to deal with some brokers. Dealing with brokers isn't very complicated. You need to be able to negotiate. Everything is negotiable. If you don't want or enjoy negotiating, you may be better off leasing to a carrier. Most people use load boards or brokers to get loads, unless they have some of their own shippers.

I'm leased to LS I used to be an indie.

Leasing give to LS is an exacting process, they hire only 2% of applicants on average. You will be required to have hazmat but won't be required to haul it , you would also be required to have tanker endorsement if you haul tanks.

The thing I like most is that I can take a month off (I'm lazy) and within a week of coming back to work I have money in the bank. I choose when, where, what I haul as there is no dispatchers. You can despite what some say make money off the board but it can be tough as there is a lot of cheap loads, I normally don't have much trouble getting good paying loads unless I end up in an area that is considered a black hole.

If you want to pull open deck do yourself a favor and buy a specialized trailer like a stretch trailer, I see loads that consistantly pay in the 7 to 8 dollar range for overlength, you can make decent money with a standard flat but the bigger money is in specialized. A word of warning when it comes to specialized, if you don't have experience you will have to work your way into it.

Now for the bad; Corporate is loaded with nazis, you will do it their way or you will be gone, they can be a real pain when it comes to safety but the upside is scales generally don't look at you as they know how tough LS is when it comes to safety.

LS also offers discounts for fuel, tires, parts, etc. To give an example, due to the recent wholesale decrease in diesel I am currently paying as much as .35 cents per gal. less than pump price, couple that with the FSC and my personal minimum rate I do pretty well....when I work :D

Crap! ...I heard it was more like 10%

Well...guess I'll have to tell them I'm a member of CAD...that has to put me in the top 2%. :?

...anyway Chief...get to work. :P

What is the full name of the company your lease too?
thanks

That 10% is bits and pieces of Mercer, Daily, Ace Doran and nefarious bedbuggers that are cobbled together and made into BCO's :lol: The 2% I speak of is lazy bastards like me that could never get into trouble as we rarely work and when we do it's usually for low miles and high pay :D

2% or 10%, LS has standards that I like :wink: