How to Become an Owner Operator and Make Money in Trucking

Blogs, Forums, and Other Resources

2011-02-26T13:12:00.006-05:00

See my other posts:

Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

Below is a list of some blogs, forums, and other resources. Reading what others have to say about their experiences is a good way of trying to discern if the life as an owner operator is for you.

Some of these are written by current truck drivers, so you can get another point of view besides mine.

OOIDA

OOIDA News

Overdrive (magazine) Online

Overdrive Online Channel 19

Heavy Duty Trucking (magazine)

Commercial Carrier Journal

Trucking Truth

Flashcards Secrets for CDL

Diesel Boss

Roadside HazMat

The American Driver

Truckers News (by Overdrive Magazine)

Please report any broken links.

TEXTING BAN

2010-01-26T14:38:00.010-05:00

FEDS BAN TEXT MESSAGING

See my other posts:

Blogs, Forums and Other Resources
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

The U. S. Department of Transportation has banned text messaging by drivers of commercial vehicles such as large trucks and buses.

Truck and bus drivers who text while driving commercial vehicles may be subject to civil or criminal penalties of up to $2,750.

This includes just holding a phone while driving.

The Way It Was: A Short History of Trucking

2010-01-12T17:10:00.025-05:00

1970 Ford

The Last 50 Years

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy PolicyOwner

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

When I bought my first truck and became an owner operator in 1972, I had already been driving a truck for 5 years. Most of my experience up to that point was local, so when I took my first load in my own truck and over-the-road at that, it was quite an adventure!

I was so excited that when I got home at about 2:00 in the morning, I relived every mile with my wife, who was also excited and had waited up for me so she could hear all about my trip.

Speaking of my wife, let me say that without her support, I would not have been able to be an owner operator. So many people get a job driving over-the-road (OTR), or buy a truck and become an owner operator, and then have to give it up because they do not have the support of their families.

The support of a spouse (husband or wife, boyfriend/girlfriend), can mean the difference between success or failure. A person will have a very difficult time being on the road if their better half is always complaining about them not being home, not being there for all the "special days" (birthdays, anniversaries, school events), and not being available to fix things, or know what to do when the furnace goes out, the car has a flat, or the roof starts leaking.

My wife and I discussed, in depth, the financial side of buying a truck and going on the road, but we hardly thought about the social and emotional side. Luckily, she was able to make a decision without consulting me, could change a tire or spark plugs, replace a broken window, fix a furnace, and a hundred other things.

She always keeps the yard mowed, and does a lot of little "fixer-uppers", so that when I come home, I can rest and enjoy my family, or do maintenance on the truck, and not have to spend doing odd jobs around the house. Believe me -- that helped me enormously, alleviated a lot of tension, and enabled me to keep doing my job as a truck driver.

Speaking of truck maintenance, my wife also helped me work on the truck whenever I needed her and usually even when I didn't. This made us closer together and I could finish the repairs faster so that I could spend more quality time with her and the kids.

Not only could she do the simple things like checking the air in the tires, replacing light bulbs, and handing me tools, she could change the oil and filters and grease the truck, too. She already knew some simple mechanics when we got married and that made it easier for her to learn.

There came a time when I had to rebuild my engine, and she was right there beside me all the way. Now that may not sound so hard, but we were broke, broke, broke, and we had to do the work ourselves or go out of business. The problem was, we were having a near blizzard and we didn't have a garage.

We had a cabover and we built a tent and worked under that. There was a nearly 25 mile an hour wind which was blowing snow in the cracks of our tent, and it was COLD - minus 15 degrees. She worked with me the whole time until we got the truck back on the road.

Eventually she got to the point where she could do almost everything I could do. I am very picky about who works on any of my equipment, even a lawnmower and I don't trust very many people. Once she learned how to do something, I trusted her work completely. If she wasn't sure of something, she asked me, so I would know that she wasn't doing something wrong and letting me think it had been done right.

I know that this isn't for everyone, but it works for us.

When a member of the family is hardly ever home, and leaves the other one to take care of everything, it can (and often does) tear a family apart.

When I started driving, we did not have cell phones or other means of communication, so I would have to call on a pay phone, and that was very expensive, so I would usually call only once a week. In the meantime, all kinds of things were happening at home which my wife had to deal with by herself: car breakdowns, sick and injured children, appliances that quit working, everyday things such as school activities, bills, and running a house without any help. As she was unable to reach me, she had to make decisions on her own and handle these crises on her own.

I was fortunate that she is able to handle all of this by herself, and never blames me for not being there. She understands that the nature of being an OTR truck driver demanded that kind of lifestyle.

One thing that helped us was the fact that I could take my family with me. My wife was able to see what it was like to be on the road: the hassles of traffic, the problems of not getting enough rest, the difficulty of finding a backhaul, the boredom of waiting to get loaded/unloaded, and so on. By her being able to understand, it made it easier for her to cope. She could already drive a standard (we even had a car once which had to be double clutched), so it was easy to teach her to drive and that helped her understanding even more.

We were also able to occasionally take the kids with us (even as babies), so we were able to be a family together, even when on the road. This also helped the kids to understand what Daddy did. We did not do this very often, as it was hard for all of to sleep in a 24 inch wide bunk.

On a couple of occasions when the kids got older, we would take a load near an amusement park or other point of interest, stop for a day after we delivered our load and have a "working vacation".

It is much more difficult to do any of that today, mostly due to insurance regulations regarding passengers, even when you both own your own truck. It is, however, easier to stay in touch with cell phones and email, and this can help.

I already wrote about finding freight (see "Load Boards") way back then, now I will write a little about "truck stops".

When people first started driving trucks in the 19 teens, there were no truck stops. Most deliveries were local. The roads were in very bad shape or there weren't any at all, so there were no OTR deliveries.

Eventually roads and equipment improved and shippers started shipping farther and farther away. When a driver got hungry, he would stop at a small Mom and Pop diner. Service stations usually did not sell diesel. In the 1940's, some small diners who had a large area around them put in diesel fuel pumps. These were the first "truck stops".

Not much changed between then and the mid 1960's. As the interstate highway system grew, so did places that catered to trucks. Oil companies started building truck stop chains, such as Truckstops of America (TA) (now Travel Centers of America), eventually taking business away from the diners. My biggest complaint today is that so many so-called truck stops have taken out their restaurants and let a franchise fast food place like McDonalds or Wendy's take over.

Now most truck stops also cater to RV and four-wheelers (hence the name change from Truckstops of America to Travel Centers of America). There are still a few true truck stops today, mainly Iowa 80, the largest truck stop in the world, and some small Mom and Pops (these are usually the best).

Where once about the only thing you get at a truck stop was food and fuel, now you can buy almost anything from safety pins to truck parts and repairs. In addition to fuel, most have added certified scales, so you can weigh your loads.

Amenities have also been added such as showers, truck washes, game rooms, movie theaters, gyms, doctors, and barbers, and I know of one that even has a do-it-yourself pet wash.

I remember the first time I saw a shower in a truck stop. It was in Pennsylvania in the late 70's at a truck stop (diner, fuel) that I stopped at often. The public (four wheelers) would enter the diner directly, but as trucks parked behind the diner, drivers would enter through a large room behind the kitchen used for storage. As I entered this large room one day, I saw a shower curtain suspended from pipes hanging from the ceiling and forming a square. On the floor, cinder blocks one row high formed a square under the shower curtain. There was no cubicle, or any privacy other than the shower curtain. This was the first truck stop shower I had ever seen. I was so excited about it, that I managed to get a load up that way a couple of weeks later and took my wife so I could show it to her!

Trucks were also much different than those of today. Most of them had small engines (about 350 horsepower). Of course the standard trailer was only 35 feet long, gradually increasing to 45' (70's), 48' (80's) and today's 53' trailers, and width from 8' to 8.5', so the need for larger hp was not so great in the early days. Still, I remember hauling full loads up a mountain on a two lane road and only being able to go about 20 miles per hour. One could almost walk faster than the truck could pull those heavy loads up those winding hills.

Traffic would be backed up for a long ways behind you. Drivers of cars knew that if a truck pulled as far to the right as possible and turned on their left turn signal, you were telling them it was clear for them to pass. You gave this signal because the driver of the car could not see around you and had to rely on you and pass on faith, otherwise they could be struck behind you for 20 minutes going up a mountain.

Cars and trucks alike would flash their headlights to signal that they were going to pass.

Some light signals are carried over today, such as flashing your headlights after a truck has passed to let him know it is safe (he has enough room) to pull back into your lane, and to flash your tail or maker lights to say, "Thank you" after someone has given you the "all clear" signal. Unfortunately, this consideration for the other driver is dying out even with truck drivers.

Trucks started out with hoods, but in the 70's, cabovers (COE - cab over engine) became the standard. These were very square shaped and flat on the front. They most certainly were not aerodynamic but they shortened the tractor wheelbase. This was necessitated by length laws. A shorter truck meant you could pull a longer trailer. After the laws were changed allowing longer combinations, the "long nose", or "large car" started becoming popular again. Today these trucks are becoming more rounded and streamlined to help with fuel economy. One of the first aerodynamic trucks was built by Kenworth. As it hood was rounded and sloped downward, it was nicknamed the "Anteater".

Speaking of fuel economy, within months after I bought my first truck, the first "great oil embargo" hit. It was almost impossible to buy gas or fuel. When one did find fuel, he was usually restricted to 50 gallons in a truck that got about 4 miles to the gallon. Hundreds of trucks were stranded all over the U.S. and unable to deliver their loads or to get back home.

To make matters worse, unlike today, you could not look on the internet to find the next fuel stop or to check to see if a truck stop had fuel. All you could do was to drive and hope that when (or if) you got to a truck stop you could get some fuel.

It was about this time that roads and equipment improved enough that shippers realized they could ship more payload without paying more in freight rates. With a "perfect storm" of higher fuel prices, the need to cut costs, deregulation, and increased weight limits, the next decade saw changes that affected the trucking industry -- and especially the owner operator -- forever.

Shippers and others keep lobbying to allow longer and heavier trucks. If you get paid by the mile, and the shipper can move 100,000 pounds for the same cost to them as 80,000 pounds, they gain, but the poor owner operator loses. It is his equipment that is suffering the wear and tear and using more fuel, but hey! they are just dumb owner operators, so let them bear the burden of cost as long as the shipper can increase their profit.

As mentioned earlier, trailers became larger and then double and triple trailers were allowed on certain roads, while at the same time deregulation allowed rates to be cut. Now owner operators could haul about 10,000 pounds more of freight for less pay than ever before. It has been down hill ever since then.

Sorry, I kind of got off track. I was talking about trucks, not trucking; so back to the subject.

Many cabovers did not have a sleeper and those that did just had a small bed, usually about 24" wide; no shelves, cabinets or any other storage space. Many drivers had a board that they laid between the cab seats and that became their bed.

Cabovers had the engine under the cab, so that the engine actually came up into the cab between the seats. This was of course covered and insulated, but there was no room between the seats. This space was called a dog house. When my wife would go with me, that is where she would usually sleep, so that I could enjoy the full comfort of the bunk.

Few trucks of this time had air conditioning, and heaters were not very effective. I used to carry a small portable propane heater to heat the cab and sometimes it would get so cold inside (while driving), I would have to scrape ice off of the inside of the windshield so I could see.

As I said before, early truck stops catered to truck drivers. Everyone used to say if you wanted good food, stop where the truckers stopped, because they knew all of the good places to eat. This wasn't necessarily true - truck drivers stopped where there was food, fuel and room to park, just as we do today. Most of these places had true home cooked meals, just like Mom, but we all know all Moms are not good cooks -- ha, ha. Most of them had good food though.

In the 60's truck stops started adding "driver's only sections". The general public wasn't allowed to eat in these sections. Supposedly if you were in the driver section, you were served quicker than if you were in the general restaurant, and most of the time, that was true.

Almost every table in the driver section had a telephone installed in the booth, so that drivers could call their dispatchers or home while eating (remember, there weren't any cell phones yet).

Once my wife and I got a baby sitter and she went with me to help. At that time I was pulling a flatbed, and she would help me tarp, un-tarp and put on and take off the side kit. She could do all of this by herself, but it was always easier when two people were doing it.

Anyway, we stopped to eat and went in the driver's section and sat down. The waitress came over and told us that we weren't allowed to be in that section, as it was for driver's only. My wife had to show her chauffeur's license (pre-CDL days), before we were allowed to stay. That shows you how few women drove back in those days.

In the 60's and early 70's CB radios became popular with the general public, mainly due to movies and TV shows about trucks and trucking. I don't know why all of sudden this became a popular subject (maybe people were getting tired of all the westerns being made at the time).

There were numerous movies, such as "White Line Fever", "Convoy", "Black Dog", "Breaker, Breaker", "High Ballin", and of course the most famous, "Smokey and the Bandit". On TV the popular shows were "B.J. and the Bear" and "Movin' On". Most of these had very little to do with the reality of actually driving a truck, but they did make for some good entertainment. Probably the most realistic movie was "F.I.S.T." about Jimmy Hoffa starting the Teamsters.

There was a movie called "They Drive by Night" from 1940. The storyline was lame, but it is interesting to watch just to see the old trucks and the way truck drivers dressed. Of course, there were no owner operators back then - they were all company drivers, and most wore uniforms and "trucker hats", more of a chauffeurs hat than a ball cap.

Truck drivers used to be called "Knights of the Road". If a car had a breakdown, they could almost always depend on a truck driver stopping to render aid. I'm not saying that there weren't any bad truck drivers, but for the most part, they were trusted and for a good reason. They were helpful, polite, and dependable.

I'm not sure why that has changed, but I think deregulation had a lot to do with it. Way back when, truck drivers usually started driving in their teens or early twenties. It was usually a family tradition, and it was something to be proud of. After deregulation, so many people started driving, without the history of being a good Samaritan.

Schedules became tighter, and so many drivers were just out to make a buck, without any consideration for others, even their fellow drivers. It became more dangerous to stop and help someone. Hijacking were frequent and one never knew if they stopped to help someone in distress if they were going to be robbed themselves or have their truck stolen.

Sad to say that today truck drivers are often vilified, sometimes with good reason -- they no longer have any courtesy on the road. Their lack of professional driving habits makes people hate "big trucks which are trying to kill me."

Before debit cards, fuel cards and other electronic innovations, a driver had to carry all of the money he would need while on a trip. Companies gave "advances", a portion of the pay to use to buy fuel, food and other things. If a person would be going from coast-to-coast, it wouldn't be unusual for him to be carrying $3,000 or $4,000 cash. Sometimes this led to robberies, and even murders, but it was rare.

Log books have been around forever, but if a person was creative, they could get work as much as they wanted. I knew guys who would drive so many miles, they would run three sets of logs at a time. The carriers knew that no one could possibly move as much freight as these drivers did legally, but as long as the logs they turned in looked good, the carriers just looked the other way. The more goods that were delivered, the more money everyone made.

Today, that is becoming impossible. Logs are checked against receipts for fuel and tolls. ELDs (Electronic Logging Device) and satellite tracking is making it harder to cheat on logs. New hours-of-service rules which will curtailed how much a person can drive didn't help the owner operator. But are rates going up to compensate for this??? NO WAY!!

Truck driving used to enjoyable. Although some things, such as better and more comfortable equipment, is beneficial, the extra costs, and the added regulations, and low pay, more traffic, and lousy drivers (both trucks and four wheelers) hardly makes it worthwhile.

I will be adding to this post later, so check back, or better yet, subscribe.

Pros and Cons of Being an Owner Operator

2009-06-23T01:03:00.026-04:00

The Good, the Bad, and the Ugly

View my Other Posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

Pros:

You are not tied down to a 9-5 job.

You can make a lot of your own decisions.

You can make a decent living.

You get to "be your own boss".

You get to see a lot of this beautiful ol' USA (and maybe Canada and Mexico).

Cons:

You are not working a 9-5 job. You may put in 20 hours days. You will go without sleep, food, and showers. You will do a lot of sitting and waiting. Waiting to get a load, waiting to get loaded, and waiting to get unloaded.

You will be gone from home - a lot.

You must make a lot of your own decisions: Do I buy tires, or have the engine rebuilt? Do I take this cheap a** load so I can get home, or do I sit out here in the boonies for 3 days waiting on a decent paying load? If I wait on a decent paying load, how much am I going to lose by not working for 3 days?

You can make a decent living, if you work your butt off, but it is getting harder and harder to do. Every day freight rates are cut and you are forced to haul for less money. Rates are no higher than they were 20 years ago, and in many instances, they are lower. Most of the money you make will go back into the truck.

You get to "be your own boss", with all the decisions, troubles, and headaches that come with being a business owner.

I would like for any current truck drivers who may be reading this to add to this list by making a comment.

10) Truck Driving Schools

2009-05-15T02:50:00.003-04:00

Truck Driving Schools

View my Other Posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes

A reader posted a comment about truck driving schools on "Pros and Cons of Being an Owner Operator", so I decided to write a little something about them.

I hadn't written anything before because I really don't know a lot about them.

When I started driving a truck, all you had to do was go to the DMV and tell them you wanted a chauffeurs license. If you already had a regular (car) license, that was all there was to it - no written test, no road test, no nothing - just pay your money and you were now a "professional driver"!

Most people learned to drive a truck by going with a friend or relative who drove a truck. It was a lot like your parents or someone teaching you to drive a car.

Then along came CDL's and everything changed. Now you have to have a physical before you can even apply. You have to take a written test. You have to pay for and take extra written tests if you want to be licensed to pull tankers, or doubles/triples. If you want to haul hazardous materials, you have to jump through a dozen hoops - and pay even more. And of course, there is the "skills" (road/driving) test.

When CDL's were first introduced, the "truck driving school" became real popular. I am sure there are good ones as well as bad ones, but they all cost you a pretty penny.

Do you have to go to a truck driving school to get a CDL? No. If by some method you learned to drive a truck and can pass the written tests and skills test, then you don't need to pay someone to get your license.

Then why go to a truck driving school? Well, how are you going to learn how to drive a truck. Maybe in the military. You can get a learner's permit and go with a CDL holder and learn to drive sort of like the old fashioned way. As for the written tests, all you need to do is get the study book from your DMV, study it well and you should be able to pass your written test without a problem.

The problem is mainly insurance. If your friend is willing to teach you to drive, you probably won't be covered by their insurance, so they may not want you driving in case an accident should happen. If your friend has his truck leased to a company, then it becomes even more difficult. Most companies won't even allow passengers, and if they do, they almost certainly won't allow that passenger to be learning to drive.

From what I have heard and read, in addition to providing you with a truck to practice with, and helping you study, they also teach you things like how to fill out a log book.

Remember when you learned to drive a car and got your first driver's license? Have your driving skills improved since then? (I hope so!) Well, it will be the same when you go to a truck driving school. You may get your CDL, but there is still a lot to learn.

The main advantage of going to a truck driving school is having a truck to practice with and take your skills test with.

Even if you already know how to drive, it may be difficult to obtain a truck for your skills test. As I wrote in another post, in some states you can rent a truck (so I've been told), to use to take your skills test, but that may not possible in all states.

Also, if you are not listed on the truck insurance policy, then you may not even be allowed to use a borrowed truck. I tried to let a friend take his test with my truck and even though I drove him to the test site, he wasn't allowed to use my truck because he wasn't on my insurance.

So beware, if you are thinking of going to a truck driving school. Find out exactly what they will teach you, and how much time you will get in the truck, actually driving. Make sure that when you finish you will actually have a CDL. Try to find someone who has gone to the one you are thinking of going to and see what they think about it.

Like most things, truck driving schools can be beneficial, if you choose the right one.

9) What You Actually Need to Get Started

2009-05-05T01:21:00.046-04:00

1973 White Road Commander

Becoming An Owner Operator

9) What You Actually Need to Get Started

View my Other Posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
10) Truck Driving Schools

OK. You have done all of your research, and decided you really do want to become an owner operator.

Hopefully, you have:

Read this entire blog
Talked with other owner operators, especially at the company you want to lease on to.
Run a "What If" with the Interactive Cost Per Mile Calculator and found you really could make a profit. Not just a profit, but enough income to pay all of your expenses and to have enough to live on, too. (Don't forget, you also need to save enough to cover repairs or a major breakdown and enough to live on while you are getting the work done.)
Made a business plan.
Gotten your family to support you. You would be surprised how many people quit driving a truck because their family doesn't like for them to be away from home.
Decided what kind of entity you want to have.
Decided what you will be hauling so you can spec your equipment properly?
Have you found a truck? Do you need a trailer too? If you are leasing to a company, many of them have requirements as to how old of truck they will lease. Be sure to check it out before you buy.
Made sure your equipment will pass a DOT, state and company inspection.
Talked with a loan officer at the bank, credit union, or loan company that will financing your equipment to see what information they require, and to see if you can even get financing for your equipment?
Figured out how you are going to get your Commercial Driver's License (CDL). Will you be going to a truck driving school? If not, do you know how you are going to take a road test?
Found an accountant or tax professional and got a list of what you need to keep track of before you start buying equipment.
Check out Owner-Operator Independent Drivers Association (OOIDA) for vast amounts of information. As before, I recommend that if you do become an owner operator, that you join OOIDA (non owner operators can join, too).

I would advise you to get your CDL first. If you can't pass your tests, it would be a shame if you had already bought a truck and/or trailer. Then you would be stuck with having to try to sell them.

You do not have to go to a school to get a CDL.

You do have to take both a written test and a (skills) road test. If you can pass both, then you will be issued a license.

You may be able to rent a truck (tractor only) in which to take your road test.

Also, we tried to loan our truck to a friend to take his test in, and examiner giving the test wouldn't let him use our truck because he wasn't listed on our insurance. Don't forget, you have to take your road test in the "type of vehicle" you will be operating. In other words, you have to have a "Class A" type vehicle to get a Class A license.

In my state you must 'supply your own vehicle" and pay the road test examiner $75.00.

Also (any state) before you can even apply for a permit, you must have a long form DOT physical. Cost depends on the doctor.

Don't forget, if you are applying for your own authority, you have to have a drug and alcohol program in place. You will be required to have pre-employment drug testing before you begin to operate your truck. If you are leasing your truck to a company, they will probably handle the drug and alcohol testing.

After you decide what type of entity you will become (sole proprietor, partnership, LLC, corporation, etc.) you may have to get an Employer's Identification Number (EIN), also called a Federal Employer's Identification Number (FEIN). It's FREE! and will be issued immediately if you apply online. If you will be a sole proprietor, your EIN will be your social security number, unless you will be hiring employees (including family members), then you will need an EIN. All others will have to file a IRS Form SS4, or file online at Employer ID Number (EIN). See: 6) How to Do Bookkeeping and Other Necessary Paperwork Permits and Taxes for more information about sole proprietorships, partnerships, spousal partnerships, employees,and more.

After you get your federal EIN, you will have to apply for a business license with your home state. (If you are going to be a sole proprietor, you will apply using your social security number, unless you will have employees - then you need an EIN.) You may also have to apply for a business license with your county (parish), and/or city. If you are going to be a LLC (limited liability company or LLP (limited liability partnership) then you will also need to have liability insurance.

Are you going to be leasing to a company or getting your own authority? If you are applying for your own authority, you have to have a USDOT number.

Will you be operating intrastate or interstate? (intrastate is within one state only, interstate is operating in more than one state).

Will you be hauling hazardous materials (hazmat)? Then you need a hazmat endorsement (any state). You will also need to have a background check and be fingerprinted and get a Hazmat Endorsement Threat Assessment. Go to Transportation Security Administration for details. Cost is $86.50. It is valid for 5 years, unless you transfer (to another state), upgrade (add endorsements), or renew a license, then you need to go through (and pay) all of this again. You also need to be fingerprinted.

If you will be loading or unloading at ports, you will need a Transportation Worker Identification Credential (TWIC). You can get information about this at Transportation Security Administration - TWIC. The cost is $132.50 and is valid for 5 years.

If you plan to operate in Canada or Mexico, you will also need a passport. Passport Forms. If you travel internationally often, you may be eligible for a FAST: (Free and Secure Trade) card for commercial vehicles.

The answer to each of these questions determines what you need to apply for. Go to Federal Motor Carrier Safety Administration (FMCSA) Getting Started with Registration for a matrix (list) of the required forms, and to apply online.

You will, of course, need license plates for your tractor and your trailer (if you are purchasing both). Contact your state Department of Motor Vehicles to find out how to apply. Unless you are applying for license plates within 30 days of your purchase of your tractor, you will need a copy of IRS Form 2290, Heavy Highway Vehicle Use Tax Return, showing you paid your road use taxes. This is an annual fee. It is $550.00 a year for an 80,000 pound vehicle (except logging.) This is prorated if you buy a truck during the course of the tax year, which is 01 July to 30 June.

The type of trucking insurance you need will depend on whether you are leased to a company or have your own operating authority, what type of goods you will be hauling, and whether your equipment is financed or paid for. Be sure to read all of the pages at the FMCSA website. Join OOIDA ($45 a year) and they will give you all the help you need to decide what kind of insurance you need. You can even purchase it from them. Just as with your personal vehicle insurance, your driving record, type of vehicle and the company you buy from will determine the cost

If you are leasing your truck to a company, you may also be required to be fingerprinted, buy Occupational Accident Insurance, and/or Worker's Compensation Insurance.

I know that everyone reading this wanted a nice, neat little list of what you need and how to get it, and how much it would cost. As you can see, however, there are so many variables, it is impossible for me to tell you exactly what you need. In addition to the federal requirements, each state has their own rules.

The costs are also impossible to calculate without knowing exactly who, what, where, why and how, but here is a rough list:

Money to pay for a truck driving school, if you are going to go to one
Down payment(s) for your equipment.
Licenses
Permits
Insurance
Enough money to operate until you get your first settlement check
Enough money to live on until you get your first settlement check. I would recommend having enough for at least 2-6 months
Money put up for breakdowns (it could happen on your first trip)

If you need to buy products (training manuals or safety and compliance tools), J. J. Keller is a good source for safety and regulatory compliance products and services that help you increase safety awareness, reduce risk, follow best practices, and stay current with changing regulations. They are used by most of the large trucking companies.

I hope this has helped you. I would be interested in your comments. Let me know if you think this has been useful. If you need information about something I didn't cover, let me know, and I will update this.

Read my other posts for details and resources for of some of the information in this post.

Be sure to subscribe to this blog to get the latest information, as I keep updating this site.

I am sorry I have to do this, but due to spam "comments" I feel I need to moderate comments from now on.

I am sorry for any inconvenience this may cause to my legitimate commenters.

8) Companies That Lease Beginning Owner Operators Who Have No Experience

2009-03-28T20:31:00.032-04:00

'83 Kenworth

Getting Started As an Owner Operator

8) Companies That Lease Beginning Owner Operators Who Have No Experience

View my Other Posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

This list has been updated. See: Part 2 (below).

If you want to become an owner operator, but you don't have any experience, if you are just beginning, if you are fresh out of truck driving school, who will hire you?

Below is a list of companies I found on the internet through various sources that stated these companies would hire an owner operator who has no experience.

Most of these companies have websites, but a few of them don't. I do not know anything about them, so I am not endorsing them.

So, if you are looking for an owner operator trucking job, check out these companies. (Remember, the owner operator is really a trucking business, not a "job".)

List of Companies - Part 1: (Scroll down for Part 2)

4 Star Bulk Transport

Allegiance Transportation, LLC

Altar Hauling, LLC

American Best Transportation

American Shipper

American Trans Freight

Amexx Express, Inc.

Astle's Trucking, Inc.

Barr-Nunn Transportation /Owner Operator Division

Baxter Express Services, Inc.

Bear Transportation Solutions

BGD Express, Inc.

Boats on Wheels

Cain and Forshee Trucking, LLC

CalCoast Cargo

California Cartage Express

Celtic Xpress

Champion Logistics Group

Cheema Freightlines, LLC

Chicoda Carriers, Inc.

CLC Trucking

Clearpoint Transportation

Confident Transport, Inc.

Container Express, Inc.

Cortrans Logistics

Crown Carriers, Inc.

CRST Malone, Inc

Dahl Trucking, LLC

Dart Trucking Company, Inc.

DD and S Express

Dimax Express, Inc.

Divide Transport

Divinity, LLC

Dog House Trucking

DTI Logistics

Eagan Transport, Inc.

Elizabeth

Enterprise Truck Line

Federal Logistics

FFE Transportation Services, Inc

First Team Transport Group

Four Season Environmental, Inc.

FTI Inc.

Gentle Touch Auto Transport, LLC

Go 4 Trucking, Inc.

Gorno Transportation Services

Grace Transportation Services Inc

Heartland Express

ICMS

Integrated Transport Logistics, Inc.

J and J Christian Transport

J L Shandy Transportation, Inc.

JB Hunt

Jimmy's Transport Express

Keytran Transporters

Knight Transportation, Inc.

KP Inc.

Legacy Express, Inc.

Lenny B's Express

Lessors, Inc

Liberty Transfer

Lucky Trucking

M and L Logistics

Magann Atlantic

Marten Transport/Owner Operator division

Mason Dixon Intermodal, Inc.

McLeod Express, LLC

Meadowlark Companies

My Express, Inc

NJ Re-Cycle Inc.

North Atlantic Leasing, Inc.

Owl Wire and Cable, Inc.

Panther Expedited Services, Inc.

Pavco Trucking Company

Perpetual Motion, LLC

PGT Trucking/Owner Operator Division

Pioneer Freight

Rhodes Farms & Trucking, LLC

RR Express

S and S Transport, Inc.

Shippers Support

Showtronics, LLC

Silver Streak Transportation, LLC

Snowy Owl Transportation

Southeastern Trailer Transport, LLC

Southwind Transportation

Sterling Global Express

STS Limited

Sunteck Transport Carrier Group

Supreme Auto Transport, Inc

Swift Transportation

SZL, Inc.

T Sammons LLC

Tennessee Steel Haulers

Timberline Transport, LLC

Transportation Network

Transtrak Expeditors, Ltd.

Truner Brothers Trucking

Universal AM CAN Ltd.

Velocity Express

W. J. Donovan, Inc. (Mayflower Transit, LLC Agent)

W. S. Carrier Services, Inc.

Western Sky, Inc.

Wheeling Transportation

Woody's Trucking' LLC

Zelenka Nursery, LLC

List of Companies - Part 2:

A.I.M.E. Logistics

Agricultural Express

Barton Transport, LLC

Blackwater Logistics

Buchanan Hauling Rigging, Inc.

C and C Transportation

C. White and Son, Inc.

Cargo Express, Inc.

Central Freight Lines, Inc.

Christenson Transportation, Inc.

Clark Transfer, Inc.

CR England

Cramer Transportation, Inc.

Crete Carrier Corporation

CRST Van Expedited

Cypress Truck Lines, Inc.

Danny Herman Trucking

Dependable Carriers, Inc.

Dice Transport, Inc.

E H Transport LLC

East-West, Inc.

Express – 1 Expedited Solutions

Finnegan's Moving and Warehouse Corporation

Fortrans

Fremont Contract Carriers

Frontrunner Logistics, Inc.

Hammell Transport Service, Inc.

Hotshot Logistics, LLC

Howells Motor Freight, Inc.

HTS

JK Moving and Storage, Inc.

JN Trans

Joe Zaputil Trucking, Inc.

Keystone Freight

Langer Transport Corporatation

Link America

Liquid Transport

Loadstar Transport

Lonestar Transportation

M. S. Molitor Trucking, Inc.

Maverick Transportation LLC

May Trucking Co.

McCrary Enterprises, Inc.

Midnite Express, Inc.

Midwest Express Corporation

Midwest Livestock Express, Inc.

Nancy Baer Trucking, Inc.

National Distributors Leasing, Inc.

O. L. Price Trucking, Inc.

Pride Express LTD

Pro Fleet Transport Corporation

Reeve Trucking

Refrigerated Delivery Service

RH Stover Transport

Risinger Brothers Transfer

Road Warriors Auto Transporter

Roehl Transport, Inc.

Ron Burge Trucking, Inc.

S and M Transportation, Inc.

Safe Handling, Inc.

Sammons Trucking

Schneider National, Inc.

Sherman Bros. Trucking

SJ Tranportation

Summitt Trucking

Sunset Pacific Transportation

Tandem Transport

Towne Air Freight

Trailway Enterprises, Inc.

Transco Lines, Inc.

Transport Service Company

Triple S. Trucking

TST Expedited Services

Turner Brothers, Trucking

Venture Logistics

Wayne Transportation

Werner Enterprises

West Atlantic Transportation Corporation

Whitlock Transportation Services

Wofford Farms

Workhorse Transportation

Worthington Sensitive Products Transport, LLC

Zalt Transport, Inc.

Next post: 9) What You Actually Need to Get Started - Licenses, Permits, and Insurance

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7) What You Need to Know About Loadboards for the Owner Operator

2009-03-15T16:42:00.052-04:00

2000 Pete 379

How to Become an Owner Operator

7) What You Need to Know About Load Boards

View my Other Posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

One of my readers asked a question about loadboards, so I decided to do a separate post on them. See Coupon Mommie's comments at Owner Operator 411 – Welcome

Be aware that a lot of the loads posted on the free loadboards is not as complete as the loads posted on the expensive loadboards the companies use.

As I told you, I use (and pay for) Members Edge , they are part of 3SixtyFreightMatch. I just found out that the company I am leased to uses 3SixtyFreightMatch. They get all the loads I get on Members Edge, but they also get loads I do not. The loads posted on MembersEdge seem to be "leftovers". They are all cheap freight. Very few of them pay even $1.00 a mile, much less more.

My point being, there may be a lot of freight posted, but is it anything you would want to haul?

One other thing I did not think to tell you, both of the load boards I subscribe to show the rates, but the companies seldom post them. They are like used car dealers, they just say, "Call."

Now that I have answered Cookie Mommie's question, I guess I should explain for you new to this what a load board is. A load board is a place where companies post available loads and/or available trucks. On most, you can also post that you are looking for a load.

Some load boards are free and some have to be subscribed to. Some are public and some are private, that is they are only for owners leased to a particular company.

Almost all of them let you search in various ways. Some have alarms or alerts that let you know when a new load that meets your criteria becomes available, either by a sound, email or a text message to your cell phone.

In the old days before cell phones and laptops, if you took a load to Houston, TX for instance, and wanted to get back home to Richmond, Virginia, the only load boards were in truck stops.

Here is how it worked. You would go to a truck stop and there would be a TV screen with a list of available loads, the broker who had it, their telephone number, what type of trailer, and the origin and destination. This list would scroll endlessly.

There would be a lot of drivers (up to 20 and 99.9% men) standing around watching that board with a pen and paper in their hands. Every once in a while, the board would go, "DING", meaning a new load had been posted. All eyes would swivel to see what it was. Everyone would furiously scribble down the phone number, then run (fast paid off) to the bank of pay phones to call the broker. Hopefully, you got to the phone before everyone else, and had change in your pocket. You would then call the broker to see how much it paid, and any other particulars.

If you weren't fast enough, or if the load didn't suit you, then you would go back to board and start all over. Usually there weren't any chairs, so you had to stand. If you left to get a drink, more change, or to pee, the perfect load would come up and be taken while you were gone.

Often you would get excited when you saw a load going to your hometown, only to realize that it was for a reefer and you were pulling a flatbed.

It was not unusual to stand there from 8:00 a.m. until 5:00 p.m., and have to start over the next day.

My, my, that sure was fun! I really don't miss "the good ole days".

Now days, you sit in your truck with your laptop, tell the load board that you want a load for a flatbed from Houston to somewhere near Richmond, and it will sort out all of the loads that match. If you don't see what you want, it might still go "DING", but now you pull out your cell phone and make your call.

It may easier to look for a load, but it isn't any easier to find a load. There may be several posted, but the rates are low. It gets harder every day to make a dollar.

Next post: Companies That Lease Beginning Owner Operators

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6) How to Do Bookkeeping and Other Necessary Paperwork for the Owner Operator - Permits and Taxes

2009-03-14T21:11:00.054-04:00

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2000 379 Peterbilt

What You Need to Know to Become an Owner Operator

6) How to Do Bookkeeping and Other Necessary Paperwork
Permits and Taxes

View my Other Posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

Keep in mind that we have been doing this since 1972, so we will probably miss some stuff. If you don't see what you are looking for, just ask. It is difficult to describe something that to you is routine, but is all Greek to someone else.

Think about when you were learning to use the computer for the first time. You might have asked someone, “How do I find information about ACB company?” The old hand may have said, “After you open your browser, just type their address into the search bar.”

You were probably thinking, “What is a browser and how do I open it? How in the heck do I know what their (mailing) address is? What is a search bar and where do I find it?” To the person explaining it, they were very clear and made perfect sense. To you, their explanation was as clear as mud.

I will try to keep that in mind, but as I said, if I miss something, or don't explain something well enough, let me know and I well see if I can confuse you some more, uh, er, sorry, I mean clear it up.

My advice is to find a good accountant, who knows the trucking industry. The rest of this article is to just give you an overview of what and how expenses are counted. Keep in mind that for every rule the IRS has, there are several exceptions.

Where to begin? When I first started as an owner operator, in 1972, there was no such thing as a computer. Everything was done by hand! Can you imagine? At least we had adding machines, but I can't tell you the number of times we would spend a couple of hours going over a column of figures trying to find a mistake.

Today all you need is a computerized spreadsheet, or better yet a bookkeeping program. I first started out with something called Lotus. I am now using an old (2000) version of Quicken. It does the job for me, and I don't have any need to change. What program you need to use depends on what you need to track. If all you need is to keep track of is your income, expenses and mileage, any bookkeeping program will do. If you need to track information so you can do your own permits and fuel taxes, or if you plan on hiring an employee, you may want to consider a bookkeeping program geared to the trucking industry. There is a lot of trucking software around, but having never used any, I can't recommend one. If any readers have used any trucking bookkeeping software, especially owner operator software, please leave a comment and tell us what you use, what you use it for, if you like/dislike it and why.

Since the company I am leased to does all of the fuel and mileage taxes, and permits, we don't have a lot of book work to do, as we used to. We don't use an accountant. We never did. My wife kept track of the income and expenses and we would take the totals to a tax preparer to have our income taxes done. After finding mistakes for 3 or 4 years, and having to take them back and have them redone, she got tired of that and decided she could do the job as well as they could. She started ordering tax books from the IRS (now days you can get them online), and she started doing our taxes herself.

What kind of paperwork you will need to do, will depend on several factors. There is one rule that can't be broken, however, no matter what else you do: KEEP ALL OF YOUR RECEIPTS! For everything (except maybe meals – see later).

Before I go any further, I want to remind you that we are in the trucking business – not the tax business. Anything I say, you should have checked out by someone - an accountant or tax professional. See "Income and Expenses"

The information I am giving is just our experience and should be used only as a starting point, so you will know what questions to ask of your accountant or tax professional, and to help you understand what they are talking about.

How much of the following you, personally, need to do depends on how much someone else does for you, such as the company you are leased to, or an accountant you hire.

If you are unsure if the person you are going to knows trucking specifically, find someone else. If they give you information that doesn't sound right, call the IRS (or OOIDA) and ask about it. A good source for tax information is trucking magazines and organizations. Owner Operator Independent Drivers Association (OOIDA) is excellent – yes I am a member, no I don't get anything for plugging them. Most trucking magazines will run articles during tax season about tax questions specific to trucking, and some even have monthly tax columns.

If you are an independent owner operator – that is if you have your own authority, you will have to keep (or hire someone to do it for you) records for: every expense, all income, all capital (equipment) expense, miles run in each state, total miles, fuel purchased in each state, total fuel, and drug and alcohol testing (yes, even if you are the only person in your company).

The DOT tells you how drug and alcohol testing has to be done. They have very specific rules about pre-employment, random, and post-accident testing. The most difficult thing for the person who has their own authority and no employees, is the random. In spite of what you might think, you can't just get up one day and say, "Well, I haven't had a drug or alcohol test for a while, guess I'll go have it done today." Oh, Nooo! You have to select a "random person" on a "random basis" to have a drug and alcohol test, and you must keep very detailed records about who, how, when, and why. That is why you are required to hire a consortium. A consortium pools a lot of individuals together, pulls the random draws and does all of the required paperwork and record keeping.

As I said before, I am an OOIDA member, and I think they are one of the best things that ever happened for the owner operator. OOIDA is a full-service organization and help with drug and alcohol testing for you, as well as help you get your own authority and permits. They have owner operator insurance, trucking and personal vehicle insurance, medical insurance, retirement, and tons of information about the trucking business. Membership fee is only $45.00 a year, which includes their very informative magazine, Land Line.

If you are leased to a company it depends on how much, if any, of the above they take care of on your behalf. Whatever they don't do, you have to.

As I said, keep all of your receipts for everything. If you hire an accountant, you take your receipts and settlement income (pay) statements to them. Some people I know put these receipts in folders with different categories. Some people will even total those categories, but most owner operators I know throw all their receipts in a box and take the box in to their accountant, complete with spilled french fries. Most accountants require that you take this box to them at least once a month.

The perfect way, although I don't know anyone who does this, would be to have a laptop, and enter each expense at the time you buy something, or as soon as possible afterward. I don't advise you to try to enter your toll receipt while driving though (ha, ha).

If you are going to be keeping the books yourself, whether or not you do your own taxes, you should enter everything as soon as you can – usually at least weekly. It is so easy to put it off and the first thing you know, it is tax time, and you haven't made but one or two month's worth of entries.

What records you keep and how you keep them will depend on what type of entity you are. Are you a sole proprietor, a partnership, a LLC, an S corporation, or a corporation? Most likely you will be a LLC.

If you are a sole proprietor, you will use your social security number as your tax number. For all other entities, your will have to file Form SS-4, Application for Employer Identification Number - EIN (you can also file for a EIN online). It's FREE!

If you are a sole (single) proprietor (owner) it is fairly easy to keep records, as everything is 100% yours, income and expenses.

You are also 100% "at risk", meaning all debts, but more importantly, all judgments against your business. In other words, if someone wins a lawsuit against your business, even if your business files bankruptcy, you are still liable for the debts.

You are required to file a Form 1040 Schedule C (or C-EZ) - profit or loss from a business - sole proprietorship, and a Schedule SE - self-employment.

If you are a partnership, it becomes a little more complicated. How is the partnership split? 50/50? 60/40? Something else? It makes a difference when you file your taxes. If it is 50/50 and you buy a $100,000 truck, each of you owns $50,000 worth of the truck. Each of you will share 50% of the income. If you financed the truck, then each of you is responsible for 50% of the debt. Now apply that to 60/40 or some other percentage. See, it is getting a little more complicated. Now are both of you active partners? An active partner is one who participates in the partnership. For example, you drive and your spouse does the book work and record keeping. You are both active partners. However, if you drive and you hire an accountant, and your spouse doesn't do anything else, then your spouse is a passive partner, but if you and your spouse drive team, then you are both active partners. Another example: Your brother paid for the truck and wants a percentage of the profits in return, but you do all of the driving, maintenance, and everything else. He is a passive partner. Now, what if you have more than one partner? Some of them could be active and some could be passive.

Which partners are "at risk", and for how much? Are any of them guaranteed a set payment, no matter how much the partnership nets?

You are required to file a Form 1065 (with a Schedule K) - partnership, and give a Schedule K-1 to each partner.

The partnership does not pay taxes. It passes all profits and losses on to the partners using a Schedule K-1. Each partner is required to file on their Form 1040, a Schedule E - supplemental income and loss, and a Schedule SE - self-employment. Each partner then takes his share of profits or losses on their Form 1040 based on the amounts on the Schedule K-1.

A LLC is a Limited Liability Company. It used to be that if you weren't a sole proprietor or a partnership, then you had to be a corporation or S corporation (small corporation).

Now they have the LLC's (Limited Liability Corporation) which is a relatively new business structure allowed by state statute.

LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC. The reason the owners have limited personal liability is because the LLC is required to carry liability insurance usually for about one million dollars.

Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation (the LLC doesn't pay taxes, but "passes through" the tax liability to each member).

Owners of an LLC are called members. Since most states do not restrict ownership, members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single member” LLCs, those having only one owner. Some kind of "Articles of Organization" with your state will be required before becoming an LLC. A limited liability partnership is called a LLP.

Individual members file a Schedule C, partnership members file a Form 1065, and corporations file a Form 1120 or 1120S. Except for Schedule C files, you will have to file a Schedule E, and a Schedule SE.

All of this may make a difference in how you track your expenses and income.

When you become an owner operator, you become a businessman, excuse me, businessperson, and you also for some purposes become an employer (even if you don't hire an employee). Because of that, you must pay self-employment taxes on your earned income, which consists of both the employer and employee share of taxes (you are, in effect, hiring yourself). These must be paid to both the Federal and State tax departments. On the other hand, you get to deduct amounts for an IRA (Individual Retirement Account), a SEP (Simplified Employee Pension) plan, health insurance, and 1/2 of your self employment taxes. There may be limits on some of these deductions, so be sure to check it out.

Speaking of being an employer, you can pay your children to wash your truck, your spouse to keep the books, or mother to be a co-driver. These payments are deductible, but you have to pay employer taxes on the amount you pay them (unless one or all are co-owners), and they have to pay income tax on what they earn from you.

On the subject of spouses, if you and your spouse share management decisions, you are automatically considered a partnership by the IRS, unless you elect not to be. If only one of the spouses makes the decisions, and you don't have any other partners, then you will be a sole proprietor and you can hire your spouse, such as to do the bookkeeping. If you do not "opt out" of being a partnership with your spouse, then you have to file a partnership return (Form 1065), an you each share in the expenses and income on a Schedule K-1. See: IRS site: "Married Couples in Business" for details.

Once you have decided what kind of entity you want, and gotten your EIN, if needed, the first thing you need to do it register your business with your state and get your business license. You may also be required to get a license in your county (parish) and/or city.

Almost every penny you spend can be used to reduce your taxes in one way or another. Some expenses can be deducted, and some have to be depreciated. The IRS tells you what has to be depreciated. Generally it is equipment (property as the IRS calls it) used in your business, and the cost of improvements.

Deduction: You take the cost off of you income. Example: You buy a tire for $300.00 - you take $300.00 off of your income.

Depreciation: You can not take the cost off of your income, but you "depreciate" the cost (according to IRS rules) and take a percentage of the cost over a certain length of time (set by the IRS). Example: You buy a truck for $30,000.00. The first year you deduct the depreciation amount of $9,999.00, $13,335.00 the second year, $4,443.00 the third year, and $2,223.00 the fourth year, for a total of $30,000.00. This is a simplified example. See your tax advisor for details.

How it is depreciated, and how much it is depreciated, depends on what it is, what time of the year it was purchased (or sold), whether you had a trade-in, and whether the trade-in was the same type (like-kind) property, or whether you sold property and then purchased property (even if it is the like-kind), and what the useful life of the property is. The IRS tells you what the useful life is.

If you are leasing (renting) a truck from a company, first, you have to determine whether you really are leasing, according to the IRS:

You must first determine whether your agreement is a lease and deducted as rent, or a conditional sales contract and will be considered as a purchase of the property.

If it is a lease, then you deduct the payments. If it is a conditional sales contract, then you can not deduct the payments, but have to depreciate the equipment.

Is it a repair or an improvement?

Replacing a head gasket is a repair. An overhaul is an improvement. Separate depreciable property means you would depreciate the truck as one item and the overhaul as another, separate, item.

You generally deduct the cost of repairing business property in the same way as any other business expense. However, if a repair or replacement increases the value of your property, makes it more useful, lengthens its life, or adapts it to a different use, you must treat it as an improvement and depreciate it. Patching a hole in your trailer floor is a repair and the cost is deducted. Replacing your trailer floor is an improvement and the cost is depreciated. You can deduct the interest you pay on any loans for equipment or improvements.

Tires are always deducted because they are considered to have a useful life of one year. The IRS tells you what the useful of everything is. An over the road tractor has a useful life of three years, while a trailer is five years. Here's a new one that some accountants may not know (but should): an auxiliary power unit (APU) is five years.

There is also the Section 179 deduction. Section 179 gives you a choice to deduct, instead of depreciate, depreciable property – up to a certain limit, which was increased for 2009 as part of the stimulus package.

2019 will see changes on Section 179, and the amount you can deduct instead of depreciate. There may be other changes, too.

Any interest on equipment purchases, loans, or credit card purchases (for the business), is allowed as a deduction. Penalties (late payment fees, fines and tickets, etc.) are not deductible. Interest charged on income tax assessed on your individual income tax return is not a business deduction even though the tax due is related to income from your trade or business. Treat this interest as a business deduction only in figuring a net operating loss deduction.

In addition to the tax forms listed above, four of the most common other ones you may need are (no matter what type of entity you are):
1040 ES - Estimated Tax for Individuals
Form 4562 - Depreciation and Amortization
Form 4797 - Sales of Business Property
Schedule D - Capital Gains and Losses (if you sold any business property)
This list may not be complete. You may need additional forms or schedules. I just listed the most common.

Any income you receive will be reported to you on a Form 1099 Misc. - Miscellaneous Income, in box 7, Nonemployee Compensation. You will not get a W-2, as you are not an employee, even if you have your truck leased to a company. Note: when you started a new job as an employee, you were required to fill out a form W-4, Employee's Withholding Allowance Certificate. As a self-employed person, you will have to fill out a form W-9, Request for Taxpayer Identification and Certification. You will have to fill one of these out for each company you lease your truck to, or if you have your own authority, each business you receive any income from. The total of all the amounts on all your 1099's is your gross income.

There are two reasons to keep track of your miles. As I said, I use Quicken, and I just enter my miles as though they were an expense, and the name of the state as a category, and Quicken will total my miles by state. Fuel purchases can be done the same way.
Your license plates for your tractor under the IRP (International Registration Plan),may be based on weight, cost of the tractor when new (even if you bought it used), your purchase price, and miles run in each state, even if it is only one mile, your total miles, and which states you want to haul in for the year you are purchasing the plates.

If you are paying your own fuel taxes, you need to keep track of how many miles you run in each state, and of course your total miles. You also need to record how many gallons of fuel, and/or the cost of fuel for each state you ran in. You need the total miles for each state even if it is only one mile.

It has been a long time since I bought permits. The company I am leased to buys my permits, so I can't tell you anything about them. So much has changed since I bought my last one. It used to be that each truck had a card to carry and that card had 50 little squares drawn on it. For each state you wanted to run in, you had to buy a stamp and put it in the proper square for that state. These were called bingo cards and bingo stamps. Each stamp has been replaced mostly with a one sheet computer print out.

If you want to haul alcohol (beverages), including beer, you need additional permits.

Many states also used to require you to buy a license plate in addition to the bingo stamps. Look at some pictures of trucks from 30 or more years ago, and you will see up to a dozen license plates hanging off the front bumper. There might have been another 12 to 15 stickers on the side of the truck that various states required you to have. These have mostly been replaced with the IFTA (International Fuel Tax Agreement) sticker, the HUT (Highway Use Tax) sticker, the ICC MC number, and the USDOT number see "Definitions and Industry Terms"

Just because a lot of the plates and stickers have been eliminated doesn't mean the permits or taxes have been.

All I can advise you about state permits if you need to buy your own, is to contact OOIDA or each state to find out what you need and how to get it, and what records you will need to keep. Many states are online and you can download applications and all kinds of information, while other states barely list a phone number.

If you are thinking of taking a home office deduction, be very careful. It used to be if you had a certain place in your home where you did your bookkeeping, you could take an in-home office expense. You can no longer do that unless you actually generate income, usually by having people come in, and it has to be used exclusively for business - you can't use part of your living room as a office. Deducting a home office is high on the list of triggers for an audit.

You also need to estimate what you will be netting each quarter and pay estimated income taxes to the IRS, and your state tax department. Failure to pay enough estimated taxes could result in a penalty and interest on the amount due from the time you failed to pay it.

Meals for people working under the "hours of service" (basically log books), have special rules.

The IRS knows that food costs more in some places than it does in others, so they give different rates for different cities. For the ordinary traveler, this doesn't present much of a problem, but the truck driver who is in several different places every day, it does. That is why the IRS allows transportation workers to figure their meal expenses differently.

There are two ways you can track your meal expenses. You can keep a receipt for each meal, cup of coffee, snack cake, and bottle of soda you buy (a real headache!), or you can "flat-rate" them.

If you choose to flat rate them, the IRS allows you $66.00 a day for meals, but you are only allowed to take 80% of that ($52.80). Are you beginning to see how complicated bookkeeping is?

Now you can not take $52.80 for every day you get in the truck. You must be gone long enough to require a "rest period", and be away from your "tax home". This means that if you drove your truck to pick up a load 10 miles from where your business is, and it took you 7 hours (pre-trip, fueling, driving, loading, returning), you could not take a meal allowance, even though you may have bought a meal. There are two reasons you could not take the allowance: 1) you were not gone long enough to need adequate rest, and 2) you were not away from your tax home.

Keep your log books, as they are needed to figure the number of days you can take a meal allowance.

So, how do you actually figure your expenses? It doesn't matter if you do it by hand, or use a bookkeeping program. You need to set up categories for each expense: fuel, parts, labor (repairs), meals, tolls, taxes, licenses, interest, supplies, cell phone, pager, communications, motels, and so on - any expense you have. I have a "miscellaneous" category, but I try to put everything into a specific category. Be sure you record each expense on the proper date, backed up by receipts.

Keep a record of each deductible expense (truck, trailer, improvement), separately. Record the date, amount, trade in amount (if any), and what the expense was.

When you sell equipment, you need the above information, as well as the date of sale, cost of sale (including advertising or sales fee), and how much you sold it for, as well as the amount of depreciation previously taken.

If you have income from different sources you should separate these into categories, too.

A lot of companies are not putting fuel surcharges on the 1099's. Even though it is not being reported to you, it is still income to you and must be reported when you file your tax return.

Of course, as stated above, if you do your own permits, you need extra categories for the total amount of fuel purchased, amount of fuel purchased in each state, and all states you ran in, as well as the number of miles you ran in each state, and all the miles you ran.

And that's "all" there is to it!

Be sure to subscribe to this blog, so you will receive the next posting and keep up to date.

If you want me to write about a particular topic, just post a comment, and I will try to accommodate you.

Resources:

IRS

Here are some tax publications to get you started. Look for:

Pub 17 Your Federal Income – information about meal deductions for those subject to hours-of-service

Pub 334 Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) – sole proprietor
Pub 463 Travel, Entertainment, Gift and Car Expenses (covers meals for the transportation worker)

Pub 541 Partnerships

Pub 505 Tax Withholding and Estimated Tax

Pub 509 Tax Calendars

Pub 535 Business Expenses

Pub 538 Accounting Periods and Methods

Pub 542 Corporations

Pub 544 Sales and Other Dispositions of Assets

Pub 551 Basis of Assets (What depreciation is based on)

Pub 560 Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans)

Pub 583 Starting a Business and Keeping Records

Pub 587 Business Use of Your Home (Including Use by Day-Care Providers)

Pub 946 How to Depreciate Property

Next post: What You Need to Know About Loadboards

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5) What the Owner Operator Needs to Know About Equipment

2009-02-23T10:45:00.065-05:00

2001 Kenworth T600

Information About How to Become an Owner Operator

5) Equipment

See my other posts:

There is one more thing you need to decide before you apply for a loan (assuming you have read my previous posts): what kind of freight do you want to haul?

This will determine what company you can lease to (all companies don't haul all types of freight) and what kind of equipment you will need. If you are buying your own trailer, then you need to know what kind to buy based on what you will be hauling. For example, do you need a refrigerated trailer (reefer) to haul food, a dry van for general freight, a flatbed to haul steel, or a drop deck or goose neck to haul equipment?

Even if you don't buy your own trailer, knowing what you will be hauling will determine how to spec your tractor. If you are going to be hauling heavy loads, you need to spec a tractor with heavy duty suspension and a big motor. If you are going to be hauling mostly light loads, you might be able to get by with a tractor with a smaller engine or lighter suspension. Also, the type and length of trailer might determine the length of the wheelbase of your tractor. What you are planning to haul will definitely decide how much your tractor can weigh.

Deciding what you will be hauling will also tell you what other equipment you need to buy. If you are going to pull a drop deck or goose neck, you will need chains, tarps and binders. If you are planning on pulling a flat bed, you will need all of those things plus a side kit. If you pull a dry van, you most likely will need load jacks.

When you are deciding what you are going to haul, don't forget to think about the physical side of what you choose. If you are going to be pulling a flatbed, you will have to be outside in all types of weather chaining and tarping your load. If you want to pull a reefer, you may be required to unload it, which means you will be working in very low temperatures, regardless of what the outside temperature is.

When you spec your tractor, there are several factors you need to need to consider. Will you be making long or short hauls? If you make long hauls, you will probably want to spec a sleeper. You don't want to spend all of your money on motels, and besides, there are a lot of times when you have to spend a night on the road and can't get to a motel.

What kind of engine do you want and how much horsepower do you want? The three major engines are Cummins, Paccar, and Detroit. Caterpillar no longer makes engines for semis, but can still be found in older tractors.

You need to decide what size tires you want, and what kind of a transmission and how many gears. Today, you can get a semi with an automatic transmission! Definitely a far cry from the old days when many trucks had two sticks (two gearshifts).

Modern trucks have power steering, ABS brakes, heat and air conditioning. They have big comfortable seats and privacy curtains. The beds are large and comfortable and some have a couch, and some have two beds. Most have closets and storage space. You have to decide what you need, then decide how much of what you want you can afford.

Other equipment you will need is gloves, coveralls, fuses, flares, a fire extinguisher (mandatory), tools, oil, fuel, and water filters, and maybe a CB. You should also carry oil, grease, and anti-freeze. A smart phone is practically a must-have.

Optional equipment you may want, a satellite radio, and a TV. If you are planning on being gone from home a lot, you might want to consider buying an inverter. Then you can buy a coffee pot, a toaster and a microwave, and save yourself a lot of money on meals.

A note about meals: When you file your taxes, the IRS lets people who are in the transportation industry and those who are regulated by hours-of-service rules (see "Income and Expenses") deduct meals differently and at different rates than everyone else. See an accountant or tax preparer for details. To simplify a very complicated rule, basically you can flat-rate your meals for every day you are on the road long enough that you are required to take a sleep break, even if you don't eat a thing, or spend a dime. Of course with the IRS, there are 40,000 ifs, ands, ors, and buts, so be sure to check it out with a tax professional or preparer.

An auxiliary power unit (APU) is becoming a must have. These range from about $6,000.00 to $10,000.00. What is an APU and what does it do? Basically, it is a generator. It is used when you are not driving to eliminate idling. Why is idling necessary? If you have to sleep in the truck in the winter or summer, you will probably run your truck so you can have heat or air conditioning. It is hard to sleep when it 25 degrees or 118 degrees in the sleeper.

With an APU, you can heat or cool your cab without running you truck. This is very important, as an APU can reduce your fuel consumption by about 75 %. Yes, I said 75%. Instead of using a gallon of diesel an hour idling, you use a quart with an APU. Not only is this important for your bottom line, but more and more cities and states are making anti-idling laws with fines ranging from $50.00 to $25,000.00 and/or up to 1 year in prison, for idling your truck.

Sometimes the idle time allowed is as few as three minutes. These anti-idling laws were written to reduce noise and air pollution.

Click here to go to an: Anti-idling Regulations Chart

To view this chart you need Adobe Acrobat Reader

The cost and age of your equipment can affect the costs of your license plates and insurance.

As you can see, it is very important to decide on your equipment before you make a commitment. Once you have bought that $40,000.00 used truck, it is very hard to change to another truck if you find you don't like what you bought.

Although you will never know exactly what it is like until you actually do it, you need to ask questions of other drivers about their equipment, and what they like and don't like about it. If at all possible, go out on a load with someone. Volunteer to help them load/unload to get a feel of what it is like. The more you know before you buy, the better off you will be.

What make of a truck should you buy? That is up to you. Just a some people wouldn't own anything but a Chevy, some people won't own anything but a Volvo.

Any make of truck, if spec'd correctly, will do the job, it is a matter of personal preference and how much you can afford to pay.

The most popular trucks are Peterbilt, Kenworth, and Volvo. Other popular truck makes are: Freightliner, International, Ford, Mack, Sterling, and Western Star.

Anything with a Gross Vehicle Weight Rating above 33,000 lbs. is a "Class 8" truck.

Good places to look for a truck (new or used) are "The Truck Paper" and "Truck Trader". If you have cash and are very familiar with trucks, good deals can sometimes be found on eBay.

Next post: How To Do Bookkeeping and Other Necessary Paperwor

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4) Operating Authority or Leasing as it Applies to the Owner Operator

2009-02-18T18:48:00.081-05:00

2001 Kenworth T600

Becoming An Owner Operator

4) Operating Authority or Leasing?

See my other posts:

I hope you got here by reading my previous posts (numbered 1 - 10) first. If not, I advise you to go back and do so. This post won't help you if you can't get the financing for a truck. If you don't understand how you will be making money (net), then I you are not ready for this step.

If, on the other hand, you understand that you will not get rich by owning your own big rig, have checked your credit report and Fico score, cleaned up all of your debt problems, and are sure you can secure a loan, then read on!

There are two types of owner operators. The one with their own authority, and the leased owner operator. For the purposes of this post, I am assuming you will be driving your own truck. If you are planning on hiring a driver you would be an owner, not an owner operator, but most of this information would still apply.

Your own AUTHORITY: This means that you are a “trucking company”, technically a carrier. You will probably have to buy a trailer. You will have to get your own permits, and pay your own taxes. You will have to find your own freight.

The three different types authority are: Common Carrier, Contract Carrier, and Broker Authority.

COMMON CARRIERS provide for-hire truck transportation to the general public. Common carriers must file both liability (bodily injury & physical damage) insurance and cargo insurance. The definition of an "authorized for-hire” carrier is a person or company that provides transportation of cargo or passengers for compensation. If you are a for-hire carrier, in addition to the USDOT Number you will also need to obtain an Operating Authority (MC Number).

CONTRACT CARRIERS provide for-hire truck transportation to specific, individual shippers, based on contracts. Contract carriers must file only liability (bodily injury and physical damage) insurance.

A contract carrier cannot broker loads without first applying for and receiving a license to operate as a broker of freight.

BROKERS (brokers are not owner operators) arrange for the truck transportation of cargo belonging to others, for compensation, utilizing for-hire carriers to provide the actual truck transportation. Brokers must file either a surety bond or trust fund agreement.

If you want to get your own authority, there are lots of companies that can help you, such as (OOIDA). We are members of OOIDA and have been since just after they started, about 40 years ago. They are one of the best things I have ever spent my money on. Membership dues are only $45.00 a year, but sometimes they run a special. Includes a subscription to “Land Line” magazine, in print, digital, or both. (If you have a CDL, you can get their magazine without being a member.) In addition to helping you get your own authority, they offer discounts and rebates on equipment, they have truck, health, and life insurance, a drug and alcohol consortium, retirement plans, fuel cards, load boards, business information services, and much more!

Most owner operators are leased to a trucking company – a common carrier or a contract carrier. Actually, you are not leased, your truck is. When you lease your truck to a trucking company, they provide you with services and charge you for them (see "Income and Expenses" post). What services they provide and how much they charge you varies from company to company, so ask a lot of questions before you lease on your truck and find out exactly what they do and what you would have to do. Some of the common services provided:
1. they buy your license plates (and usually you have to reimburse them,

2. they pay fuel taxes,

3. they buy the permits,

4. they do all the record keeping and reporting for fuel taxes and permits, and/or

5. they provide you with a trailer (charging you rent) 6. they find and dispatch loads. These are all things you would have to do and pay for yourself if you had your own authority. You need to check with trucking companies and see if they have enough freight and if they are leasing on more trucks. Ask other drivers of the company you think you might like to lease to if they are happy (they will probably say no), how much they gross, and how much they net (they will probably lie), and if they are planning to stay with the same company they are leased to. Why did I say they will probably tell you they are unhappy? Because truckers are notorious for complaining. They complain about the dispatchers, the loads, the dispatchers, the truck, the dispatchers, the pay, and, oh, did I mention the dispatchers? So, when they tell you how unhappy they are, ask them how long they have been with that company. If it is more than a year or two, they are probably happy. I also called them liars, but in reality, they just like to stretch the truth. Most people will tell you they are doing a lot better than they really are, but then you also get those who just like to exaggerate in the other direction. Ask to see their revenue statements. A lot of them will be glad to show you. After you have asked all of your questions, DON'T sign your lease until you have read it completely and understand what it says. You are the lessor (the party who is giving the right for the use of the equipment). The company is the lessee (the party getting the use of the equipment). The lease is a legal contract. It spells out what what percentage or mileage rate they pay, what expenses you are responsible for, and what expenses they are responsible for. It should tell you when you will be paid and how (percentage or mileage). It will tell you who is responsible for fines, damages, and losses. It will tell you if you have to have an escrow account.

"Escrow fund – Money deposited by the lessor with either a third party or the lessee to guarantee performance, to repay advances, to cover repair expenses, to handle claims, to handle license and State permit costs, and for any other purposes mutually agreed upon by the lessor and lessee"

Although you can be required to carry insurance on your equipment, you can not be required to buy your insurance through the company you are leased to. They can not require you to have work done in their shop, rent or buy equipment (covers anything from load locks to trucks) from them, or buy their fuel. You are an independent, and as such have the right and option of obtaining your own services or equipment from where ever you want. This does not mean that you can't use their equipment or services, it just means you can't be required to. If you are being paid a percentage, you have a right to see the freight bills, showing the amount the load pays. If you have your own authority, none of the leasing information applies to you unless 1) you lease a truck from someone else (you are the lessee) or 2) you lease your equipment to someone (you are the lessor), which you can do.

Alphabet soup definitions:

USDOT: United States Department of Transportation

MC: Motor Carrier

FMSCA: Federal Motor Carriers Safety Administration

OOIDA: Owner Operators Independent Drivers Association

ICC: Interstate Commerce Commission. An agency which used to regulate the trucking (and railroad) industry, but is no longer in existence. It was disbanded in 1995.

IRP: International Registration Plan is a registration reciprocity agreement among jurisdictions in the United States and Canada which provides for payment of (truck) license fee on the basis of fleet miles (even if it is only one truck) operated in various jurisdictions

HUT or HVUT: Heavy (Vehicle) Use Tax - A federal tax imposed annually

CDL: Commercial Drivers License

IFTA: The International Registration Plan (IRP) is a reciprocal agreement that authorizes the proportional registration among the jurisdictions (states) of commercial motor vehicles. This means if a truck is operated in multiple jurisdictions, the owner must annually report mileage driven in each state and taxes are paid proportionately based on the mileage driven. The good news is the owner may pay those taxes in one jurisdiction—referred to as the base jurisdiction or base state. Vehicle owners are required to register under IRP, if:

their vehicle is over 26,000 pounds gross vehicle weight (GVW); or
has three or more axles, regardless of weight; or
is a power unit and trailer whose combined GVW is in excess of 26,000 pounds, and
your truck operates in at least two IRP jurisdictions

Resources:

FMSCA frequently asked questions – registration and licensing: "FMCSA"

Next post: What You Need to Know About Equipment

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3) Getting Started – Financing and Credit for the Owner Operator

2009-02-18T04:02:00.060-05:00

2001 K Whopper (Kenworth)

Becoming An Owner Operator

3) Getting Started - Financing and Credit

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

Now that you know how much money you can really earn, your next step, if you still think you want to be an owner operator, is to decide if you can afford it.

Do you want to be a truck driver, or a businessman? Most people think they can just buy a truck and roll, but there is a lot more to it than that. In the first place, a truck can cost anywhere from $30,000.00 for a used one to $150,000.00 for a new one.

You have to look a your complete financial picture and figure out if you can even afford to purchase a truck, much less all the expenses that go along with it.

First, you want your new business to be a money making enterprise, so you don't want to start out too much in debt. Your truck payments will run from $1,000.00 to $2,500.00 a month. As you can see, you will have to have a good credit history before you can even buy a truck.

Many banks and credit unions will want a written business plan when you try to get a loan. This will tell them how you think you will be able to pay back the money you borrow from them.

The first thing you need to do is check your credit report and Fico score before even applying for a loan. Everyone is entitled to an annual free credit report from each of the three credit bureaus: Equifax, TransUnion and Experian. Check with all three, as they do not provide the same information. If you find any mistakes, have them taken care of before you try to get a loan. Banks will look at your Fico score. The credit bureaus will let you buy your credit score. These are not the same thing, but a credit score should give you an indication of your FICO score (if one is high the other should be high, and vice versa.

Before you try to get a loan, you need to get your business license, so that you can get a business loan. I will write about setting up your business structure (sole proprietor, partnership, LLC, S corporation, or corporation) in a later post. I was going to do that in this post, but decided to wait because if you can't buy a truck, there isn't any reason to start a business, so we need to concentrate on financing before we start talking about ways to make money. In a way, it is just like the old saying, “You have to have money to make money.”

See: Types of Entities in Section 6) How to Do Bookkeeping and Other Necessary Paperwork for the Owner Operator - Permits and Taxes

When we bought our first truck, we paid $3,000.00 for it and the person we bought it from financed it for us. Boy! Are those days ever gone. Diesel was 34 cents a gallon, milk was 50 cents a gallon, and I walked 5 miles to work, uphill, both ways, in the snow, winter and summer.

Seriously, though, we went into debt to get our first truck, and so will you. In planning how much you need, don't forget all the other expenses. If you don't buy a brand new truck, you will probably have to put some maintenance into it before you can put it to work. If you are lucky enough to find a truck that really is ready to go on the road, you still aren't out of the woods. On your very first trip, all kinds of bad things can happen, and you need to be prepared. You may blow a tire and have to replace it (cost about $250.00), or you may blow an engine (cost $10,000.00 and UP)

Not only do you have to have the money to pay for these things, you will have to have the money to live on while you are getting the repairs done. If you blew an engine, it can take a week or more to have it repaired or replaced. Don't forget that $1,000.00 to $2,500.00 truck payment. If you are down for a week, you still have that payment coming due (and other fixed expenses like owner operator insurance, taxes, and licenses) – and you are not only spending money for repairs, you are not making any money. The moral is, you need to have some extra money in the bank to fall back on.

Anyone can have breakdowns, anytime, for any reason. I knew a guy once who bought a brand new truck and he had to have the engine replaced 3 times in a year. Yes, it was under warranty, but as I said above, he still had payments coming due, and no income each time it was in the shop having the engine replaced.

Of course, he had a lemon, and it is unusual for something like that to happen, but it does go to show, you just never know. I would like to say the best way to not have a breakdown is preventive maintenance. I can't stress that enough. If you hear a whistle in the turbo, don't just sing along with it until it becomes a scream. Have it fixed at the very first chance you get. Believe me, it will pay off in the long run.

When I first wrote this blog, the economy was in the tank. Fortunately, things are much better now, and carriers are looking for OOs to lease on with them, and freight is more available for those with their own authority. Unfortunately, freight rates hasn't kept pace with the cost of doing business. There are good loads to be had, but you have to be diligent in finding them.

DON'T HAUL CHEAP FREIGHT !!

Resources:

SCORE: www.score.org This is an excellent resource, and best of all, it is entirely free! They have mentors, online or in person to answer your questions and help you make business decisions. They have online workshops, including one titled, “Can you afford to start?” which will help you answer a lot of the questions raised in this post. If you are serious about starting your own business, don't skip this website.

SBA (Small Business Administration): www.SBA.gov/ They have information about all kinds of things to do with small businesses, as well as online training about how to start a business and how to write a business plan. They even give loans.

OOIDA (Owner Operator Independent Drivers Association): www.ooida.com They give out tons of advice, publish a magazine, make equipment loans, and sell owner operator insurance and truck insurance.

An accountant: They can do tax consultation as well as bookkeeping.

Your local bank or credit union: In addition to making loans, some have legal departments which can help you set up a LLC or corporation.

If you have a favorite resource, let us know and share it with others.

Next post: Operating Authority or Leasing?

Be sure to subscribe to this blog to get the latest and newest information.

I am sorry I have to do this, but due to spam "comments" I feel I need to moderate comments from now on.

I am sorry for any inconvenience this may cause to my legitimate commenters.

2) Owner Operator Income and Expenses

2009-02-12T16:00:00.063-05:00

96 Kenworth

Becoming An Owner Operator

2) Income and Expenses

See my other posts:

We have been in the trucking business since 1967, and since 1972 as an owner-operator. Having been around so long, I can guarantee you, you will not get rich quick driving a big rig. You probably won't even make a lot of money.

Well, let me clarify that. You can gross some big bucks, and a lot of owner operators will throw out those numbers when they are talking to you, such as “I made $150,000 last year.” They aren't lying, they did GROSS $150,000 last year, but what did they net?

After expenses, the average owner operator will not make a lot of money, but will only make about ¼ of what they gross – and most don't gross $150,000.

Why does one make so little money if ones grosses so much? Simple: Expenses. The owner-operator has to pay ALL of their own expenses. I mean everything. Want to carry a roll of toilet paper in the truck? YOU buy it. Need a $20,000.00 engine overhaul? YOU pay for it.

We are not netting any more today than we did when we bought our first truck in 1972. Why? Deregulation! Before deregulation, rates were set by the government, and there were few carriers. After deregulation, every Tom, Dick and Harry could apply for and become a carrier. Rates started going down.

Let me give you an example. I used to pull a flatbed, and I routinely hauled steel coils from Washington, PA to Houston, TX for $2,800.00. Pretty good money for 1975. Then one day, I was offered the same load for $2,500. I refused it. Within a year, the rate was down to $1,800. The rates have never really recovered.

First, for those just starting out, let me explain some terms.

GROSS: This can have two meaning for some owner-operators, depending you whether you have your own authority or are leased to a company.

Example:
ABC Company will pay $500.00 to have their load hauled. If you have your own authority, they will pay you the $500.00. This is your gross. If you are leased to XYZ Company, ABC will pay XYZ $500.00. This is the gross revenue for the load or "truck gross". XYZ will take a cut of that money and pass on to (pay) you what is left. Let's say they keep 25% (for their services). Then out of that $500.00, you will gross 75% of $500.00 or $375.00.

EXPENSES: What it costs to operate your truck. This is pretty much anything and everything. The IRS tells you what is allowable and what is not, but for the most part, just use your common sense.

Need tires? Allowed.

Got a ticket speeding (breaking the law)? Not allowed.

Need to eat? Allowed. Unless you live in your truck. There is an IRS rule about being away from home before you can take the cost of food. If you live in your truck (don't have a permanent residence), then you are not away from home.

Your dog that you take with you needs to eat? Not allowed.

Your daughter that you take with needs to eat? Maybe. Does she just go along for the scenery? Not allowed. Does she drive and/or help in other ways? Allowed.

Your truck needs to eat (fuel). Allowed.

As you can see, the expense has to be directly tied to the operation of the truck before you can claim it. Whoa! Wait up. Some of these expenses can be deducted, and some have to be depreciated, and some you may have a choice of which you want to do. More later.

NET: What is left over after all expenses are paid.

O.K. What do we have now? You worked your butt off last year and grossed that $150,000.00 that someone told you about. You bought fuel (the #1 expense), tires, oil, and grease. You paid for insurance, minor breakdowns and routine repairs, and upkeep. You paid for a cell phone, and meals on the road.

What else? Oh, yeah, you paid taxes. You probably paid taxes when you bought your truck. You paid taxes when you bought your license, you paid taxes for making money, and you paid taxes to use the roads so you could do your job - in addition to the tolls you paid to drive on the roads. Whew! That's a lot of taxes. Lucky for us, these taxes are deductible on your income tax return. You bought tools, and had your truck washed. After you paid for all of these things (and more), you have about $30,000.00 left. That is your net.

Please note: this is only an example of how you arrive at a net figure - not actual figures.

"Wow! I netted (cleared) $30,000.00 last year", you may think to yourself. That is more than I would make working a 9-5 job. That is true, but you weren't working 9-5 to make that money, either. Chances are you were gone from home, at the very minimum, Monday morning to Friday night. In reality, you were probably gone longer than that to make that kind of money. Many truck drivers, especially those who make the big bucks, are gone from home for weeks at a time. While they were gone, they were working 14 hour days. They may be making a lot of money, but they never get to see their family. They miss out on all the things their kids are doing in school. They miss out on their kids growing up. They miss out being with their spouse. They miss out on living.

When you do get home, you will make it up to your family, right? Well... the truck probably needs some routine maintenance done. Aren't going to do it yourself? Fine, you still have to take the truck to a shop, and probably wait while they do the work. If your kids don't have ball practice, or your spouse doesn't have a PTA meeting, take them with you. They will love sitting around a shop while you get the oil changed, but, hey! you are all together. After that, you can go home and sleep until time to go out again. If the kids really want to see Daddy, they can sit around the bed and watch you sleep. When you get up, if they aren't in bed, you can have a family get-together while they tell you how funny you were snoring.

I know I sound kind of pessimistic, but so many people think it is easy to drive a truck and make a lot of money and maybe even get rich, but it just ain't gonna happen.

If you think my figures are unrealistic, see The Real Cost of Trucking at Truckers report.

There are some good things about being an owner-operator and I will get into that in a later post.

***NOTICE - CAUTION***: I am an owner-operator, not a tax professional. I drive a truck for a living, so don't take me at my word about taxes. Have a tax professional check it out, and give you their advice. Not all accountants are created equal.

Try to find someone who knows about trucks. Some truck expenses have their own rules, like how much you can take for meals. There are special IRS rules regarding meals that only apply to someone in transportation, and rules applying to people regulated by hours-of-service. If your accountant doesn't know anything about trucks, they might miss that and not allow you to deduct enough for your meals on the road.

More on my next post. Later I will also try to get into what it was like when I first started driving way "back in the day" and will try to put some old pictures on here, too. So keep checking back.

1) Owner Operator 411 - Welcome

2009-02-11T16:10:00.081-05:00

2001 Kenworth T600

Becoming an Owner Operator

1) Welcome to Owner-Operator 411

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operato
Pictures
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

This is the place for owner operators to gain information and tips about starting a business. It probably will be most useful for the beginner owner operator, but old-timers should find it useful, too. This is not the place to be (or the job to choose) if you want to get rich quick. If you want to do that, you need to learn how to hit the lottery, make money online, or have a rich relative die and leave you a lot of money – or anything as long as you don't have to work, because as a small business owner you will have to work - hard. Driving a truck and being an owner operator can be rewarding and satisfying in a lot of ways and you will learn about that in future blogs. So check back often and see what you can learn about being an owner operator and about the trucking industry.

I often get asked, "Is it hard to become an owner operator?" The short answer is "No." Just buy a truck and start driving. The real question should be, "Is it hard to become a successful owner operator?" The answer to that questions is "Yes." There is so much a person needs to learn and it is a lot of hard work - both mentally and physically. So read on and see if you still think this is what you what you want to do!

Some of the things I will be writing about are: Income and Expenses; This will cover the difference between gross and net, and an overview of what can and can not be deducted.

Financing and Credit; I will explain the basics of getting a loan, and what to do if you have debt problems. I will be telling what you need money for in addition to the truck itself. I will talk about business plans, and the importance of credit reports and FICO scores.

Operating Authority or Leasing?; There are two kinds of owner operators – those with their own authority and those leased to a company. This will explain the difference and advantages and disadvantages of each.

Equipment; This section will cover the equipment an owner operator needs in addition to the tractor and/or the trailer. It will explain necessary and optional equipment. Equipment can be something as expensive as an auxiliary power unit (APU) or as inexpensive as a screwdriver.

Miscellaneous; I will be listing resources, definitions, and anything else I think might be helpful or informative. I will try to do all this in a simple, easy to understand way, with a little experience, and (I hope) humor thrown in to make a boring subject a little less so I hope to give you enough information so you can make an informed decision about starting your own business, for that is what you are doing when you become an owner operator. You aren't just becoming a truck driver, but a businessperson.

Maybe after reading this, you will decide to not to become an owner operator, but a company driver instead-- or maybe even find another profession. Two of the main reasons a lot of people say they want to become an owner operator is: to make a lot of money, and to be their own boss. As I stated earlier, you will not make a lot of money, and very few people are their own boss. Sure, you have more freedom to make decisions when you are a tractor trailer owner operator, but everyone has a "boss", of one sort or another. Mainly, those in long haul trucking has the shipper as their "boss". The shipper tells you when they expect a load to be picked up, when it is to be delivered, under what conditions it is to be shipped (tarped, refrigerated, on an air ride trailer, etc.). If you don't follow through in a professional manner, you may get a second load, but you probably won't get a third. You may be thinking, "Well I am going to lease to a company, I don't have to worry about that." You would be wrong. Your company may be the one giving you the information, but it is the shipper who has the ultimate say.

My next post will be: Income and Expenses Be sure to subscribe to this blog to get the latest and newest information.

FAQ for the Owner Operator - Top 10

2009-02-11T15:05:00.027-05:00

Top 10 FAQ

(Frequently Asked Questions)

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

Here are the "short and sweet" answers to some of the most popular questions. For details to these answers and a lot more information, read the appropriate post.

1. Q: Can being an owner operator make you a millionaire?

A: No. Probably not, although there is always an exception. If you operate your business correctly, you can make enough for it to support you.

2 : How much does it cost to start an owner operator business?

A: There is no set answer to this. It depends on the equipment you buy (new or used?), what states you run in, and whether you lease on to a company, or have your own authority. If you lease to a company, it depends on what they pay for (permits, fuel taxes, etc.). It depends on whether you (or your spouse) does your own bookkeeping, or if you need to hire an accountant.

You need approximately 10% to 20% down payment for your tractor and trailer. If you are buying your own permits, you have to pay for them upfront. Insurance companies want from 1 month to 3 months worth of payments in advance.

If you buy used equipment, what does it need before you can put it on the road? Does it need tires? brakes? other repairs? If you are leasing your truck to a carrier, you may be able to charge your fuel, but if you have to buy you own, you will need to pay for that before you can haul a load (200 - 300 gallons of fuel times $2.50 to $3.50 or more per gallon, as of December 2018).

If you are getting your own authority, you need to pay for that. Whether you are getting your own authority or not, you will have to pay for business licenses, and equipment licenses.

3. Q: How much does an owner operator make?

4. Q: How much does a company pay an owner operator?

5. Q: What is the average net income of an owner operator?

6. Q: How much per mile should an owner operator get?

A: What do you mean by "make"? Do you mean gross or net? Are you talking about being paid by the mile, or percentage?

Loads can pay anywhere from $1.00 to over $3.00 per mile gross, to the truck, but a good average figure to use is $1.50 per mile (I wouldn't run for less than that, but you need to make more per mile than your expenses per mile). Ideally, you shouldn't have to run for less than $2.00 a mile.

If you are leased to a company that pays a percentage, the average ranges from 65% to 75% of the freight bill. (You still need to figure how much that translates to per mile.) It also depends on what you haul. The average net income is about ¼ of your gross (fuel will cost you about 40-50% of your gross).

You need to know if the carrier you will be leasing your equipment to will pay for deadhead miles (empty miles: running without a load - such as going from a delivery point to a pick up point).

7. Q: What is a good business plan?

A: There is no set rule for a business plan. A business plan is really a blueprint for what you expect your business to be financially. What it needs to do is show a realistic income, and expenses. This needs to be based on research. You can't just go to a bank and say, "I can make $2.00 a mile, run 175,000 miles a year, and I will have $20,000 in expenses. You need to show where these figures came from. You need to break down your expenses (start up costs: down payments, licenses, permits), and ongoing expenses (insurance, fuel, maintenance). This needs to laid out in a logical, easy-to-read and -understand manner. Keep in mind that most bankers don't know anything about the trucking industry, so add supporting documents to show what you are talking about. You might even want to add a "glossary" page, as some of the terms you will use will be unfamiliar to the financial officer. Put everything you want them to know on paper, as you may not have the opportunity to speak to a person and explain what you mean.

8. Q: What kind of insurance do I need and how much will it cost me?

A: It depends on whether you have your own authority or are leased to a company. If you have your own authority, you will need to buy all of your own insurance. If you are leased to a company, they will cover what is needed for a carrier, but you will probably have to buy a minimum of bobtail and liability. If your equipment is financed, you will probably need additional coverage. How much will it cost? Just like your car insurance, prices vary depending on who you insure with and what type of insurance you need. A minimum cost will be at least $1,500.00 a year, and can run to $10,000 a year if you have your own authority.

9. Q: Is now a good time to become an owner operator?

A: Unless you really know what you are doing, probably not, but the economy is improving.

10. Q: How much do I need to have in the bank before I become an owner operator?

A: Lots! In addition to the cost of equipment (down payment, getting it road ready before putting it in operation), insurance, permits and other expenses, you need to have enough to live on until you start turning a profit, and you need to have enough to pay for a major breakdown (and to live on while your truck is being repaired). You need at least enough for your first month's equipment payment(s).

You should have at a minimum enough to operate on and live on for at least two months.

Have other questions not covered in this blog? Add a comment. I check this blog almost every day and I will try to answer quickly.

My eBook details all of this information, and can be purchased

Be sure to subscribe to this post so you will get the latest and newest information.

Interactive Cost per Mile (CPM) Calculator to Aid the Owner Operator

2009-02-11T15:00:00.051-05:00

How Much Does an Owner Operator Make?

Interactive CPM Calculator

See my other posts:

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

To use: Just fill in the boxes on the lower part of the chart. The results will automatically fill in the boxes on the upper part of the chart. Depending on what you enter, the results can give you your Cost per Mile, Cost per Day, Income per Mile, Income per Day, Expense per Mile, Expense per Day, Net per Mile, Net per Day, Average Miles per Day and your Expenses to Income percentage.

You can enter actual amounts if you already have a truck (useful when doing your taxes, too), or you can play around putting in different figures to see "What If?", as in "What if I paid off my truck?" or "What if the price of fuel goes up (or down)?"

If you are wanting information about becoming an owner operator, you probably want to know how much much it will cost you to get started, and how much money you will make, or even if you can make money if you buy your own equipment.

These are all good questions that need answered before you take the plunge and spend all that money on a tractor trailer rig. I have developed a Cost Per Mile (CPM) calculator to help you answer these questions.

After you get a good grip on your initial outlay, this calculator will help you with the numbers you will need to write a business plan for when you go to the bank to get financing.

These are questions no one can give you a dollar amount on. It depends on many factors and variables (see previous posts). You need to determine how much you will be paying for your truck, find out how much your insurance payments will be, and find out how much loads pay at the company you want to lease to. You need to figure in all expenses, including Miscellaneous (paper towels, glass cleaner, etc.).

Enter these amounts in the spreadsheet and you will get a rough answer to the questions above.

If you are thinking of getting your own authority, then this spreadsheet will help you determine how much you would need to charge to haul each load.

You need to talk with other owner operators (see “Income and Expenses” post). You need to determine what you will be hauling, and to where. You need to find out approximately how much these loads pay. If you are going to lease to a company, you need to find out what expenses they will pay and what expenses you will need to pay (taxes, permits, etc.). Do they pay a fuel surcharge?
You need to get a rough estimate of what other expenses you will have: truck/trailer payment, licenses, permits, insurance, cell phone, accountant, etc.
What else are you going to have to buy? Will you need tarps, chains and binders? What about straps or load jacks and hand tools?

If you don't even know what some of this stuff is, then you need to ask more questions and talk with more drivers. Be sure to ask your questions in the comment section.

You need to determine about how many miles a year you will have to run to deliver the loads the lease company contracts for, and how many days you will be on the road.

After you get all of these numbers, then it is time to use the calculator.

Be sure to subscribe to this blog to get the latest and newest information.

I am interested in knowing if you found this calculator useful.

Please CLICK HERE to open, not on the chart below. Interactive CPM spreadsheet by Google (Will open in a new window):

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Please note that by clicking on the above link, you will leave this blog and enter docs.Google.com The information that Google collects and maintains as a result of your visit to their web site may differ from what I collect and maintain (see my Privacy Policy).

Anti Idling Regulations

2009-02-11T14:30:00.067-05:00

Anti-Idling Regulations

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Pictures
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

Click here to open an Anti-Idling Regulations Chart by American Transport Research Institute - ATRI (Updated 01/17)

Be sure to subscribe to this blog to get the latest and newest information.

Definitions and Industry Terms for the Owner Operator

2009-02-11T14:15:00.032-05:00

How to Become an Owner Operator

Industry Terms and Definitions

See my other posts:

Industry Term:

Definition of Term

Back-haul:

Converse of line-haul; movement of freight from point of destination to point of origination. Part of the overall movement of door to door service.

Bill of Lading:

Shipping documents which transfers title to the goods.

Bobtail:

A tractor without any trailer.A two axle truck with the van permanently attached to the chassis.

Bingo Stamps:

Trip permits issued by the Public Utility Commission (PUC) for each intrastate freight move.

Break Bulk Agent:

Breaks down a container into its various shipments; deconsolidator.

Arranges for the truck transportation of cargo belonging to others, for compensation, utilizing for-hire carriers to provide the actual truck transportation

Brokers must file either a surety bond or trust fund agreement.

Cargo Handler:

Person that loads freight onto dock and into trailers; also known as swampers, lumpers, stevedores, longshoremen.

Carrier:

An ocean vessel, airfreight, or common carrier in the business of transporting goods or persons.

Cartage:

To transport goods between the freight terminal and cargo carrier.

Chargebacks:

Uncollectible account receivables that reduce the cash received from factored invoices.

Chassis:

Basically long, thin, steel frame on wheels, which attaches to truck tractors to haul containers.

Co loader:

A freight forwarder that consolidates shipments with another freight forwarder.

Common Carrier:

A for hire carrier who holds itself out to the public to engage in the transportation of freight at published rates between a group of points which they are authorized to serve.

Consignee:

The company or individual that receives the shipment of freight.

Consolidator:

Purchases container space at a volume price for resale to freight forwarders. Practice of taking several small separate shipments of freight and organizing them into one container.

Container:

A large metal box used to store freight on ocean vessels and rail cars. Once the vessel arrives in port, the container can be loaded onto either a truck chassis or a railroad car. They usually come in 20 or 40-foot lengths.

Container Freight Station (CFS):

Customs bonded warehouse.

Contract Carrier:

Firms whose transportation service is limited to individual contracts, which are tailored to the specific needs of a shipper or a group of shippers.

Custom Delivery Order:

Delivery order prepared by a customs house broker.

Customs House Broker:

A licensed agent authorized to pay customs duties and take possession of goods coming through Customs. No one may act as a Customs House Broker without a Customs House License.

Because customs duties may range up to 20 percent plus on some products, the consignees, for cash flow purposes, may elect not to clear customs at point of entry, but instead, through the services of a Customs House broker, wait until the goods are shipped inland before clearing customs and paying the duties.

Custom House brokers have to post a $500,000 bond, to insure that if the goods are damaged or stolen during transportation, the duties on the goods will still be paid to Customs.

Deadhead:

A tractor pulling an empty trailer. Driving the tractor without any freight.

Delivery Order:

A copy of the invoice containing the shipper, consignee, destination, description of goods, and weight.

Demurrage:

A fee charged by the shipping companies if the container is not returned timely.

Detention:

A fee charged by the railroad if the trailer is not returned timely.

A optional fee paid to a truck driver if he has to wait an undue amount of time to get loaded or unloaded.

Dispatcher:

The person who arranges the pickups and deliveries of freight and prepares the drivers' manifests.

Dock:

Areas used to load and unload freight in to or out of a trailer. This is the structure that a trailer backs up to. (Terminal).

Door to Door:

Pickup at the shipper's dock (door) and delivery to the consignee's dock (door) that is handled by the same company.

Door to Ramp:

Pickup at the shipper's dock (door) and delivery to the ramp of the railroad, ocean ship or airline carrier.

Drayage:

Pulling a trailer or container (cartage), the charges for transfer and cartage between stations, or to and from vessels on carts or trucks.

Exempt Carriers:

For hire carriers who engage in moving specialized commodities that are exempt from government regulation. Most notable of these exempt categories are unmanufactured agricultural commodities.

Foreman:

Oversees operations on the dock.

Free Time:

Amount of time (days) the container can be used without any charges. Varies with the type of container and mileage distances.

Free Zone:

The area within a certain radius of the port of entry or harbor where a for hire carrier is not required to be licensed by the ICC to transport freight between states.

Freight Broker:

An agent for the independent contractor that arranges jobs for independent contractors.

Freight Forwarder:

An agent who makes the arrangements for the transportation of freight from the shipper to consignee. The freight forwarder issues a through bill of lading from the origin to the destination, and takes full responsibility of the freight while it is in transit.

Glider Kit:

This is a kit to construct a tractor. It does not contain an engine or a transmission. It may be subject to Excise Tax.

Haul away:

Trailer used to move cars and trucks

House Airway Bill:

Air freight bill of lading for a single shipment of freight.

Independent Owner Operator:

An owner operator who is not leased to a carrier.

Interline (line haul):

Agreement between shipper and transportation company that specifies the modes of transportation and identifies the specific carriers to be used.

Interchange:

The transfer of equipment from one carrier to another.

Intermodal:

Term used in describing transportation of freight combining the use of railroads and trucks, usually for long distances. Competitors to intermodal transportation providers are the long haul trucking firms.

Just In Time (JIT)

Freight that is to be delivered "Just In Time" to be used without being warehoused.

Labor Leasing:

The practice of leasing employees (both drivers and office staff) instead of hiring them. The labor leasing company is responsible for paying employment taxes and filing the tax returns.

Leased Owner Operator:

An owner operator who leases their truck to a carrier.

Less Than Truck Load (LTL):

A shipment of loose freight, as opposed to a full sealed container.

Landbridge:

Porthaulers who transport freight from the harbor to the railroad.

Linehaul:

Movement of freight from the point of origination to point of destination

Longshoreman:

Ocean carrier cargo handler that loads and unloads freight at the harbor.

Lumper:

Cargo handler of fruit, vegetables, dry goods and agricultural products that is usually paid by cash. Someone, other than an employee of the consignee or trucking company, who is paid to unload a trailer.

Manifest:

Schedule of freight pickups and deliveries.

Master Airway Bill:

Summary of the house airway bills for a single container

Onloading:

Loading freight at the shipping end, point of origination.

Offloading:

Unloading freight at the receiving end, final destination.

Over The Road:

Transportation by tractor and trailer from one area to another area.

Owner Operator:

A truck driver who owns and operates his or her own vehicle.

Piggyback:

Where the trailer is loaded onto a rail car.

Piggyback Agent:

Shipper's agent that books and schedules freight on railroad.

Porthauler:

A subhauler that picks up freight at the harbor and hauls it to the operations terminal or to the consignee.

Pre Note:

Preliminary freight invoice used to schedule freight moves and prepare the final freight bill.

Prime Carrier:

A general common carrier with operating authority with either the PUC, ICC, or both depending on the type of hauling, intrastate or interstate.

A Prime carrier must post a $15,000 subhauler (surety) bond with PUC/ICC.

Designation as a prime carrier allows the company to solicit business directly from a shipper. If the company does not have the prime carrier designation, it can only work for another prime carrier as a subhauler.

Private Carrier:

Business that is registered with the PUC to transport and deliver their own goods. Most of their operations are moves of less than 100 miles. This industry segment's average length of haul is 51 miles.

Ramp to Door:

Pick up at the railroad and delivery to the consignee's door.

Reefer:

Refrigerated trailer.

Radio Frequency Identification (RFID):

Used to locate a product or asset in transit anywhere on the globe. RFID tags can be as small as a grain of rice.

Shipper:

The individual or company sending the freight to the consignee.

Shipper's Agent:

A transportation broker that arranges movement of freight.

Spotting:

Hauling empty trailers back to the rail yard or container company. Moving trailers around a carrier's yard, or from the yard to the dock, or from the dock to the yard.

Stevedore:

Cargo handler that loads and unloads freight from vessels at the harbor (longshoreman).

Subhauler:

An owner operator that hauls freight for a prime carrier.

Swamper:

Someone hired by the truck driver to load and unload freight during the delivery of goods (lumper).

Tariff:

The rate that the carrier charges for the hauling of freight.

These rates must be filed with either the PUC or the ICC depending on which agency is controlling.

Terminal:

Dock where freight is loaded or unloaded

Tractor:

This is the power unit that pulls the trailer.

Trailer:

The vehicle that is pulled by a tractor in hauling freight- container.

Transload:

The process of moving freight from ocean containers to domestic containers and vice versa.

Transloading:

The act of unloading freight from a container trailer and loading it into a trailer bound for the consignee.

Truck Load (TL):

A sealed trailer or container.

A load being paid as a full load, even if the trailer is not full.

Warehouse:

Where goods are stored prior to delivery or distribution.

Yardgoat or Goat:

Tractor with a short turning radius that is used to pull trailers or containers within the freight yard and not intended for highway use. A spotter truck

Be sure to subscribe to this blog to get the latest and newest information.

Pictures

2009-02-11T14:10:00.043-05:00

See my other posts:

Blogs, Forums and Other Resources
Texting Ban
The Way it Was - A Short History of Trucking
Pro and Cons of Being an Owner Operator
FAQ for the Owner Operator
Anti-Idling Regulations
Definitions and Industry Terms
Interactive Cost per Mile (CPM) Calculator Spreadsheet
Privacy Policy

1) Owner Operator 411 – Welcome
2) Income and Expenses
3) Financing and Credit
4) Operating Authority or Leasing?
5) Equipment
6) How To Do Bookkeeping and Other Necessary Paperwork
7) What You Need to Know About Loadboards
8) Companies That Lease Beginning Owner Operators
9) What You Actually Need to Get Started - Licenses, Permits, Insurance, and Taxes
10) Truck Driving Schools

1973 White Road Commander

Road Commander, also called a

Road Commode

1971 Ford 9000

1969 Ford

1971 Diamond Reo

1970 Marmon

1968 GMC

Also called a "Crackerbox", because that is what it was shaped like.

If you like these pictures, be sure to subscribe so you will know when I add more.

These are some of the trucks I owned.

Privacy Policy

2009-02-11T14:00:00.032-05:00

Becoming an Owner Operator

Privacy Policy

Privacy

I guard my online privacy religiously, and I will do the same for you to the best of my ability.

I respect your privacy and I am committed to safeguarding your privacy while online at this site Owner Operator 411 and all my other posts on this blog.

The following discloses how I gather and disseminate information for this Blog.

Email Updates

If a user wishes to subscribe to my RSS Feeds or Email Updates (powered by Feedburner), they may be asked for contact information such as name (only if required for you to send an email), and email address. Users may opt-out of these communications at any time. Your personal information will never be sold or given to a third party by me. You will never be spammed by me – ever.

Log Files and Stats

Like most blogging platforms I use log files, in this case Statcounter and Google Analytics. This stores information such as internet protocol (IP) addresses, browser type, internet service provider (ISP), referring sites, exit and visited pages, platform used, date/time stamp, track user’s movement on this site in the whole, and gather broad demographic information for aggregate use. IP addresses etc. are not linked to personally identifiable information. In other words, I am not told your name, address, phone number, or email.

Cookies

A cookie is a piece of data stored on the user’s computer tied to information about the user. This blog doesn't use cookies. However, some of my business partners use cookies on this site (for example - advertisers). I can't access or control these cookies once the advertisers have set them. I use third-party advertising companies to serve ads when you visit my website. These companies may use information (not including your name, address, email address, or telephone number) about your visits to this and other websites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice, and to know your choices about not having this information used by these companies, please check the advertisers websites for respective privacy policies.

Google, as a third party vendor, uses cookies to serve ads on your site.
Google's use cookies enables it to serve ads to users based on their visit to sites on the Internet. See: Google privacy policy.
"This site uses cookies from Google to deliver its services and analyze traffic. Your IP address and user-agent are shared with Google along with performance and security metrics to ensure quality of service, generate usage statistics, and to detect and address abuse."

Links

This Blog contains links to other sites. Please be aware that I am not responsible for the privacy practices of sites other than my own. I suggest my users be aware of this when they leave this blog and to read the privacy statements of each and every site that collects personally identifiable information. This privacy statement applies solely to information collected by this Blog.

Advertisers

I use outside ad companies to display ads on this blog. These ads may contain cookies and are collected by the advertising companies and I do not have access to this information. I work with the following advertising company(ies): Google Adsense. Please check the advertisers websites for respective privacy policies.

Contact Information

If you have any questions or concerns please contact me, Road King, at Road King, at Owner Operator 411. This privacy policy was updated 23 April 2018.

See my other posts:

How to Become an Owner Operator and Make Money in Trucking

Blogs, Forums, and Other Resources

TEXTING BAN

FEDS BAN TEXT MESSAGING

The Way It Was: A Short History of Trucking

The Last 50 Years

Pros and Cons of Being an Owner Operator

10) Truck Driving Schools

9) What You Actually Need to Get Started

Becoming An Owner Operator

9) What You Actually Need to Get Started

8) Companies That Lease Beginning Owner Operators Who Have No Experience

7) What You Need to Know About Loadboards for the Owner Operator

6) How to Do Bookkeeping and Other Necessary Paperwork for the Owner Operator - Permits and Taxes

5) What the Owner Operator Needs to Know About Equipment

4) Operating Authority or Leasing as it Applies to the Owner Operator

3) Getting Started – Financing and Credit for the Owner Operator

2) Owner Operator Income and Expenses

1) Owner Operator 411 - Welcome

Becoming an Owner Operator

1) Welcome to Owner-Operator 411

See my other posts:

FAQ for the Owner Operator - Top 10

Interactive Cost per Mile (CPM) Calculator to Aid the Owner Operator

Anti Idling Regulations

Definitions and Industry Terms for the Owner Operator

How to Become an Owner Operator

Industry Terms and Definitions

Pictures

Privacy Policy

"This site uses cookies from Google to deliver its services and analyze traffic. Your IP address and user-agent are shared with Google along with performance and security metrics to ensure quality of service, generate usage statistics, and to detect and address abuse."