Ok, this is gonna sound stupid, but is there a "Dummies Guide to Becoming an Owner Operator" book anywhere?

What I'm interested in is the general things that an owner operator, leased to a carrier, needs to know in advance. Things like, what types of taxes, fees, insurance, etc that'll be out of pocket.

I know each carrier may be a bit different as far as what they cover, such as Qualcomm's, base-plates, etc.

I'm just wanting to get a good idea. I've searched around and never really saw everything listed in one area.

If/when I ever get my own truck, it'll be an outright purchase, no carrier-purchase leases.

 

Next question: what gear ratio & engine size would be considered "ideal" for general otr, hauling a mix of freight, in a variety of areas?

For example, right now I primarily run the northeast. The company truck I'm in has a 425hp Detroit and gets piss-poor mileage. My previous truck had a 465hp ISX (pre-EGR) and averaged 6.5mpg hauling the same freight in the same area.

 

I am glad to see that you plan on buying your truck rather than leasing one from a carrier. Each carrier is a little different and fees can vary from one carrier to another.

Some carriers provide base plates and permits. Some will get your permits and base plates but take out a fixed amount out of your weekly settlements. I would expect a total charge of around $1,600-2,200. You can purchase your own base plates with most carriers, but some require that you get your plates through them. A lot of owner operators get them through the carrier since they don't have to lay out all the money up front. The down side to having a carrier plate is that when you leave the plate stays with the carrier. If you get your own base plate you can carry it to your next carrier. Most carriers will require that you purchase bobtail or unladen liability insurance. You can often purchase it through your carrier, but it is available from outside insurance companies. I would expect to spend $30-60/month for this type of insurance. Some carriers are now charging back a certain amount of cargo insurance for each load. I know of one that charges $5/per load. Many offer transflo to send paperwork. This fee is generally around $1.75-2.50 per packet. Some still use Trip Pak. The fee varies but there is normally a weekly charge. Charges should run around $4-10/week.

As an independent contractor you will be required to have either workers compensation insurance or an occupational accident policy. OOIDA offers an occupational insurance policy for about $150/month. You might spend less with a major carrier. If you leave you won't be able to keep your insurance if you get it through your carrier. Workers comp costs can vary from state to state. I have found that the occupational policy is less expensive in my state.

Some carriers charge a fee for advances. I have heard of fees that range from $1.75-20.00. I expect most to charge around $2. Most carriers use a fuel card. There is usually a fee attached to each transaction. I think most are around $2-2.50 per transaction if you use their fuel card. The advantage in using their card is that many offer a fuel discount when you use their card and fuel stops. Even with the transaction fee it is usually a good deal.

Nearly all carriers require you to post a performance bond. This is usually taken out of your weekly settlements. Bonds can range from about $500-2,000. I have heard of a couple who want a larger bond. I think you will find that most require one in the $500-1,000 range. They will usually take about $75-100/week until the bond is funded. You get the full amount back when you leave as long as you don't owe them any money.

Some carriers require qualcomm and others do not. It has been so many years since I have had one that I don't recall the costs. Some dispatch using a cell phone. If you go with a carrier such as Landstar who have their own load board, you may want to get a laptop and air card. It will be necessary to have access to the internet in order to find your loads. Some may have a discount program set up with a IP provider. I spend about $65/month for my air card.

Some carriers pay your IFTA. Others charge any taxes back to the owner operator. I would expect to spend about $25/quarter. It has been rare that I have had to spend more than that for my fuel taxes. Some may charge you taxes by the load which could result in your paying more in fuel taxes. Some of those may credit you back at the end of the quarter or year. Fuel taxes will vary according to where you buy fuel and where you run. If you know your true cost of fuel you should be able to minimize your fuel tax liability.

Some carriers offer collision insurance but I have always preferred getting my own insurance. Rates range from about 2 1/2-5% of the stated value of your equipment. Your best bet is to talk with any carrier with which you are planning on leasing to and ask about all of their fees. I would also ask for a copy of their lease. The charges should be listed as part of the agreement.

That is all that I can think of off the top of my head. Do you have a carrier in mind?

 

I have found that an engine with horsepower between 425-470 and gears around 354 works well for me. Some people tell me that they do better on fuel with more horsepower. I have a truck with 445 hp and 354 rears and 10 speed that consistently averages over 6 mpg. In fact, my average fuel mileage is around 6.29 with a CAT. I have had this truck in every one of the lower 48 states and that is about what I have averaged. It does drop a little running the western states with all the wind and mountains. Running the east coast should be a little easier on your fuel as long as you keep your foot out of it.

 

I'm still a good ways off from choosing a carrier. Right now I'm in the planning stages and am setting money aside to purchase the truck. If possible, I want to have enough to buy a truck outright, plus have $5-10k left in the bank after the purchase. I'm guessing on 1-2 years down the road at the earliest before I make a purchase.

 

Well, good luck to you in your planned "adventure"! Couple things;-Learn how to count, and get every penny out of it. Don't forget, not every penny you'll get, is yours, some of it belongs to the truck, and you are just taking a loan from it. And last, but not least;-Choose your carrier carefully, and use the proper math, to figer out results, cause in a lot of those scenarios, you'll do much better, as a company driver!

 

my liability is free
collision, comp, bobtail and workers comp is 93 bucks a week which is cheaper than when I had OOIDA insurance
Dispatch is by blackberry, unlimited use including internet is 10 bucks a month
fuel card with 300 a week cash advance is no charge
fuel taxes filed by company and held out of settlement
3000.00 escrow required taken out at 50 bucks a week AND company pays 9 percent interest on all money held, we can put more in if we want and at the end of the year take out anything over 3 thousand, this works great because you cant get 9 percent at a bank
fuel surcharge is paid an ALL miles (this is where a lot of them get you, only paying on loaded miles)
prepass is 10 bucks a month, Norpass is no charge, EZ pass supplied and tolls are billed to customer.
choice of your own tag, or company tag, if you choose company tag you can pay all up front or take weekly deductions, as has been said, running your own tag is the best way to go

anything else you want to know. just ask

 

My guess is that's more of a gearing issue than an engine issue. I'm just guessing, though.

 

This is a decent training guidebook for anyone wanting to know some of the right ways to run your business. Not a real in depth manual, but a look of good guidance. I got one of these manuals years ago when they first came out. Very well rounded and probably the best manual to start with. And they are only around $15 a copy.

PIB | Overdrive


Hope that helps.

 

I'll second the above post. Here is a more specific link. Overdrive