Truckers America

Saturday, June 25, 2011

What it takes to be an Owner Operator

Working as an Owner Operator/Settlement Carrier/Independent

Owner-operators buy their own equipment and hire out their services to customers. As an owner-operator, you are your own boss and you can pick your own jobs. The owner-operator is a manager, salesman, accountant and driver all rolled into one. Although many people enjoy the freedom of this job, successful self-employment requires self-discipline, determination and drive.

Advantages
The great lure of self-employment is the idea that you won't be out there making money for someone else. Every penny you earn is yours, and you can decide how to spend it. Many people think they will never again have a boss, and they can finally say and do whatever they want. To a certain extent, that's true. You can schedule your loads however you like. You can develop your client base around the type of work you like to do. For example, if you really like hauling gravel, then you can specialize in gravel and carry nothing else. If you find a customer you just can't tolerate, you can simply choose not to work with them anymore.

Disadvantages
The reality of self-employment is that it's actually several times more work than working for someone else, because you take on all the management jobs in addition to your driving role. Instead of being told where to go, as an owner-operator, you have to find your own work. You will have to let freight companies know you're out there, build relationships, and find ways to stay busy when times get slow.

Owning your own equipment can be very expensive: there is the initial cost of buying or leasing the equipment, plus the expense of maintaining your tractor and trailer. You also have to pay for liability and health insurance and set aside money for taxes.

Rather than having no boss, the owner-operator's boss is the customer. If you are continuously late or unreliable, you probably won't have work for very long. Although you can pick and choose your loads, there are plenty of times when there is very little freight and you may need to take whatever you can get, which could be a schedule or a type of freight you don't like. Often, new work comes from the type of work you already have, so the few jobs you take on out of desperation can become the mainstay of your business, because you need work and that's what's there.

Although you can stop working for customers you don't like, at some point you will run out of customers.

Did you know:
•Some owner operators use computer-based systems to find loads to carry that match their desired schedule.
•Some large national freight carriers only work with independent owner-operators and maintain no fleet of their own.
Personality Traits
Successful owner-operators are usually good at working with people. If you have strong organizational skills, are good at planning, and are able to manage money well, then you may have the right personality type to work as an owner-operator.

Getting Equipment
In order to start working as an owner-operator, you'll need to acquire a rig. Many owners start off with just a tractor and eventually build up to a fleet that may include several tractors, trailers and flatbeds.

Buying a tractor is a bigger investment than a car, and almost as expensive as a house, depending on where you live. If you plan to become an owner-operator at some point in the future, now is a good time to start planning.

Start saving money out of each paycheck so you'll have a down-payment on your vehicle. Most people need to finance at least a part of the investment, which means potential lenders will be examining your credit history. The better your credit rating, the better your chances of getting a low-interest loan. As you plan for the future, keep your debt load manageable, pay your bills on time and keep creditors from filing judgments against you.

Many owner-operators choose to lease their semi-truck and other equipment instead of buying it directly. Leasing a tractor is like leasing a car or an apartment - you only pay for the property during the time you need to use it. Leasing might allow you to upgrade your equipment more often and get better equipment with less money up-front. There are tax and operating advantages to both leasing and buying - that's the kind of decision an accountant or another experienced owner-operator can help you make.

Owner-Operator Companies
When choosing a company to work for as an owner-operator, be sure you understand the work arrangement before you sign on. There are a handful of companies out there who make it extremely hard for their owner-operators to succeed. For example, an employer might require you to lease a truck from their fleet, and they might give you an older truck in terrible condition. Then you will be responsible for maintaining it, and while it is being repaired, you will not be driving or earning money. The Owner-Operator Independent Drivers Association does not recommend leasing equipment from your employer. When you lease through a third-party equipment provider, you can work for different freight companies to balance your workload.

The term "forced dispatch" means that, even as an owner operator, if you get a call from a dispatcher requesting you to pick up a load, you have to pick it up. Even if it's your son's birthday party and you promised to spend the weekend at home, turning down a forced dispatch load would mean your stock would drop to nearly nothing at the freight company, and you may spend the next few weeks waiting for a decent load. Although drivers do better when they are flexible and eager to work, you should steer clear of forced-dispatch employers.

This section focused on long-haul owner-operators, but there are independent drivers in every type of trucking, including regional, local and delivery. Which we can and will discuss in further blogs.

Key Points:
•Working as an owner-operator gives you the freedom of self-employment.
•Owner-operators set their own schedules.
•Having good credit will help you get a good deal on equipment loans.
•Leasing from a third-party equipment provider will offer more options for work.

Author Unknown

Sunday, May 15, 2011

CSA 2010 and Its Affect on Drivers and Companies

Recently an interview took place with the safety director of a large owner operator carrier in one of the CSA 2010 test states.

The carrier has had one intervention under the new CSA 2010 rules. The intervention was an on-site investigation and lasted approximately 3 days. The intervention was triggered by violations regarding speeding and cargo securement.

The safety director indicated his biggest concern with CSA 2010 had to do with unsafe driving, especially as it relates to speeding. The big problem is some drivers that had been considered safe drivers are now ending up with poor safety scores. The reason is that under CSA 2010 the same number of points will be deducted for a WARNING for speeding as they would have been if a CITATION had been issued. So some drivers that had been lucky enough to just a get a warning are now being hit with point deductions, which in the end led to an intervention. My comment here is that safety training is the key to prevent this from occurring. Drivers can’t rely on being lucky or getting by with a warning. They simply can not speed or do anything that will result in a roadside inspection and continuous safe driving messages are the only way to change a driver’s behavior.

The other area of concern for the safety director is the confusion created by some states having slightly different regulations than other states. Making it very difficult for their owner operators to understand what rules are applied where. Once again, confusion seems to be prevalent in the CSA 2010 test states.

The safety director said they have been using the company newsletter to inform their owner operators of CSA 2010 and the fact that they (the owner operators) are in charge of their own safety rating.

Finally, the safety director said his overall impression of CSA 2010 is that it has some really solid safety potential but with some built in problems.

Author Unknown

Sunday, May 8, 2011

Driver Shortage or Shortage of Good Drivers

All to often I hear in the industry that we have a driver shortage. We have been watching drivers retire and leave the industry for years and we are not replacing them fast enough with capable experienced drivers. I have seen companies that never used student drivers now begin to rethink that concept and thought process. I have also watched while other companies have raised their criteria while some have relaxed their criteria.

CSA 2010 adds a whole new dimension to the equation. And lets not forget what the insurance companies do for the industry either. Recent data can be found that discusses how vehicular accidents caused by larger commercial trucks is down. I have seen in this recruiting business, that there really isnt a shortage of drivers. Just a shortage of the drivers that the insurance companies and CSA 2010 allows us to draw from.

I would like to hear from anyone who would like to weigh in on this topic and discuss the pro's or cons. Hope to hear from you and to create some intellectual and stimulating discussions

Sunday, May 1, 2011