Every leased on owner operator seems to complain about rules and regulations.
It’s as if always the big bad DOT has some regulation that will cost you money. I agree.
There are also rules and regulations implemented for owner operators and drivers that most don’t care to know at all.
The FMCSA Law and Regulation: 376.12
A lot of owner operators are being ripped off through trucking company scams such as being leased on for 10%.
Sure there are a lot of great smaller companies that are honest, but the majority is stealing your hard earned money driver.
If you are leased to a carrier you must have some kind of a lease contract document that was agreed upon by both parties. For example the agreement might be 10% of the line haul from the load that you agree to accept is taken for the company.
Load Pays: $3,600 and at 10% the company gets to keep $360.
That’s all great and honest. However it happens to many times where the company will do the following:
Load Pays: $3,600
Given To Owner Operator: $3,000
Take 10% from $3,000 and charge the owner operator $300.
As you can see the company has just made $900 by you hauling this load. Sad truth is they can take away thousands when the chances are presented. This seems to be the normal practice done by a lot of companies now a days because let’s face it.. 10% doesn’t really make them any money, but the 10% deals draw owner operators into their lease.
When an owner operator has a feeling or even clear self evidence that money is being stolen from him he goes to the company and he hears the best excuses ever.
“We didn’t steal any money. YOU ACCEPTED the load”
“This money from the load has to be paid to the broker for giving it to us”
“We don’t have to show you anything, if you don’t like it you can find a new company”
Million other excuses….
Purpose of this article is to bring the highlight of this rule and regulation for those who are not informed.
If you have a feeling that your company has been stealing money, or you would like to audit what they have been billing for the loads you accepeted, the law and regulation allows you to do so without any court orders. If they fail to allow you to do this, you may contact brokers, and if they fail to let you know, contact FMCSA and find a good business lawyer!
No matter what was accepted verbally can be used in the court of law. Everything must be paid and transactioned per the the contract that you signed when you leased on to the company. Do not forget this law.
So, you tired of being a company driver? Or are you trying to make more money in a new business venture? I have grin like the Joker from Batman right now.
How Much Money Can I Make Being a Company Truck Driver?
If you decide you want to drive a truck as a company driver over the country you must do your research on companies you will drive for. You have to find out how much per mile is the company going to pay you per mile and any extra money for work that you will do such as waiting, or doing extra drops. High cent per mile pay doesn’t mean much if you are not getting plenty of miles a week. A reasonable wage for a company driver operating a Dry Van should be minimum .40 cents per mile plus money for drops and waiting time if it exceeds more than a couple of hours. You should be offered enough freight for you to safely and legally operate driving an average of 3,000 miles a week. This is unless you wish to join an outlaw company that can cost you more than any dollar is worth. At 3,000 miles a week average with an .40 cent per mile minimum plus any extra drops you should be able to make close to $1,500 a week clean. After covering your expenses such as bills you should be able to save at least $2,000 a month. To ensure your savings stay away from products at truck stops and find them for cheaper on the internet at websites such as amazon, or go to stores such as Wal-Mart. Truck stops mark their prices up way too high. Think outside the box such as instead of spending a dollar per water bottle, buy a 24 pack for 3.99. Stick to your plan to reach your goal of how much money you want to make. Key things are do not be lazy. Don’t treat the truck as your home. Set money aside for future goals. To do this make sure you find a company that can offer you a job that will help you reach this goal.
Business Plan For Owner Operator Trucking
Owning a truck is more than just driving. This requires understanding how much does it cost for you to operate and how much are you being left with after your expenses.
First you need to have emergency money put aside. This money is to cover anything that might go wrong in the beginning. Second you need to calculate what your operating costs are and how much money you would like to make.
If you plan on being leased to a company you have to make sure that company has good paying freight. You have to make sure this company will keep you loaded and rolling. Don’t let a company jeopardize you or your financial status. They have to have cash flow coming in. Make sure their line haul percentage and anything they may offer is calculated by you to ensure you’ll be satisfied with your pay.
If you plan on finding your own freight through companies like Landstar or Mercer you’re taking a step forward. If you don’t like dealing with paper work and just want to drive and find your own loads they are perfect companies. A lot of drivers do well with them, but also a lot of drivers fail. Make sure you do your calculations before you sign up and study on how to find best freight that will make you money.
If you plan on becoming a carrier and become 100% independent you need to get your own authority. Make sure you have money set aside. Look for programs where you can get fuel cards and savings such as NATSC. Become a member of a group called OOIDA if you haven’t heard of them. If you don’t have too much capital you can use recommended factoring companies to keep your cash flow going. Now it’s time for you to find your own loads that will make you money depending on your costs. You’ll also have to make sure you pass safety audits set up the DOT regulations.
How much does a trucking company make?
It can millions, but it can also barely stay afloat. This all depends on what type of freight you haul and for what rates. Mostly important it depends on how much does it cost a trucking company to operate.
An average trucking company should be able to profit a minimum of $1,000 a week, rather they have an owner operator or their own trucks.
Some companies make way more because of their lease/purchase programs. These companies mostly make their money of leasing their equipment to uneducated drivers that dream about owning their own trucks. They end up paying all the over head that it requires to own a truck and get what ever is left of the pie from the loads. Companies like this profit from the freight but also from the equipment that they lease to the drivers. Beautiful part about their profit is that they don’t have to pay any repairs or payments out of their own pockets.
Some companies lease owner operators and take a percentage out of the load pay. This percentage can range anywhere from 10% to 35%. If an owner operator makes a gross of $30,000 in a month at a rate of %15 they will keep $4,500. If they have 20 owner operators that’s $90,000 a month. Their office, internet, a staff of few people can cost as much as $30,000. However they are still left with $60,000 a month. Beautiful part is the owner operators pay for everything; fuel, truck payments, trailers, permits, insurances, IFTA, heavy duty high way tax and whatever else!
There are also companies that have their own trucks and hire companies drivers. With companies like this it can vary anywhere, since after they pay the driver they have to pay for all the overhead and maintenance. Good thing is the equipment is being paid off and eventually they can sell it or lease to a driver where they will collect money that they didn’t earn before.
Bottom line is a trucking company can make anywhere from $10,000 a month to $3,000,000 . It all depends on their business plan.
How much does it cost to start a trucking company?
Starting a trucking company can be very cheap. That’s if everything you own is depending on good luck!
If you hire a third party service to get all of your permits and paper work, you can be looking at a price of up to $2,000. This would include the random DOT drug testing, required permits, authority, and a business name rather you choose to be incorporated, LLC, or any type of business you decide to become.
Starting off you will need cargo insurance which you will require a down payment for. At current times depending on what type of insurance you decide to get, you will need a down payment that’s between $3,000 – $4,000. After that you will pay monthly anywhere between $800 – $1,200. This all depends on what your insurance carries and if you have hazmat or not.
This start up fee is also assuming you already have the equipment such a truck and a trailer. If you do not have equipment, the cost will certainly be over $25,000 depending on how old of equipment you will buy.
As you see starting a trucking company is very cheap on the back end but it costs a lot to keep it running. Majority of the expenses generate from your equipment and it’s usage. Equipment itself, drivers, office, IFTA, Heavy Duty High Way Tax, tolls, and fuels. Most important is keeping your equipment maintained to be safe and profitable.
In case you need better cash flow to manage your money and keep your business running it’s recommended to find a factoring company. Sure it will cost, but however you will never have an issue with cash flow. There are a lot of great programs such as NATSC that will give you fuel cards with great discounts!
You can also find great resources at groups such as OOIDA.