Have you ever wondered why you see more owner operators pulling
J. B. HUNT trailers?
Are you aware of what it takes to be a successful owner operator?
On your own:
As an owner operator, you might want to go totally independent or partner with a carrier. When it comes to paperwork and planning , you are on your own when you are an independent. Which means fuel taxes, load planning, accounts receivable, fuel purchases, broker relationships, maintenance account funding,, credit reports, compliance, trip planning and cash flow to keep your truck moving 
down the road are now your responsibility. In other words, you will have to have an office on the road. A tractor with 70 inches of space is pretty small to run this operation from, so you might want to hire on someone to do these things for you. Now you need only to communicate and send reports, bills of lading, mileage reports and other variable information to the person that you hired to do this.
Costs involved:
Another thing that you might want on hand is enough fuel money and operational expenses to last for about 90 days just in case your cash flow is interrupted by slow paying brokers/shippers. I think that somewhere around $20,000.00 might be enough to carry you through until the cash flow starts. Using a factoring company is also an option. They’ll charge you around 6 to 11% of the total haul bill if the shippers/brokers credit was worthy. This would help you with operating expenses so you won’t have to stop what you’re doing to chase down your money.
Obstacles:
Yes, it can be a lot of hassle and sometimes be troublesome for one person to handle. However the person that can manage all these things successfully will find great financial rewards in doing so if they can keep their truck moving while doing it. In my opinion, this is the number one obstacle for all drivers who have an “independent spirit” that keeps them from getting their own authority and managing their own accounts.
Partnering with a carrier:
The obstacles I mentioned above are the reasons that so many owner operators decide to “partner” with a large carrier. When you own a truck , you need to maximize that truck’s profitability while keeping it moving. You can’t keep it moving unless you keep all of your ducks in a row and manage all the required information needed for your operation. This is why the “larger” carriers have a variety of pay plans for o/o’s to choose from. For their trouble, they charge a percentage of the load or just pay you a flat rate for hauling the loads that they have arranged thru their own brokerage or 
outside brokers. Most of the o/o’s that I know (and most companies for that matter) are on the traditional “mileage” plan. This is where they pay you somewhere around .85 cents to $1.10 per mile plus fuel surcharge. Pay for empty miles varies and may not be offered at all.
A percentage of the load pay is another offering that some companies are using to compensate their o/o’s. This usually is around 65% to 80%. This number varies and it’s because the carrier sometimes will pay more to an o/o if he has and maintains his own trailer. This type of compensation (percentage) has no provision for paying any dead-head miles and is usually paid (or eaten) by the owner op. Some even have a “trailer usage” fee where they charge the o/o for weekly use even if he is taking that week off. The one I am with has great equipment and maintains it well so I’m never hunting down a repair facility or waiting on a road service.
Carriers differ in some very important ways. The larger the carrier the more “buying power” they have and will pass on the savings to their leased on operators. This can really help the o/o’s bottom line. Some don’t however. One particular carrier I know gets a volume discount on their fuel but doesn’t pass it on. This means that they get somewhere from .20 to .30 cents off of the pump price but doesn’t apply it to the leased operator. This means they are making lots of money off the fuel you buy to pull their freight.
Why I chose J. B. HUNT:
The carrier that I have chosen to partner with is J. B. HUNT. I work with a large team of professionals who have been in the business for a long time. They pass on their savings directly to their o/o’s and it’s a discount that can’t be matched by anyone else. I have been able to maintain, insure, fuel and operate my business at a much lower cost than I would have if I had been with elsewhere. I can always count on a well maintained trailer with no rental involved and most loads are drop & hook. They also have an affordable health plan that I take advantage of .
I work on a percentage plan and I’m also able to pick my own loads and dispatch myself so I can keep my business rolling. I have learned what freight lanes are the most profitable and I run those areas. That’s only good business. I used to work with another company who also had a load board but the deliveries and pickups were always jumbled around and the agents would sometimes sell that load to their buddy if it paid really well, leaving me without a load at the last-minute. They also had a habit of pocketing the fuel surcharge for many loads.
J. B. Hunt has several programs for an o/o to choose from. Tired of running O.T.R.? J.B. is now offering O/O’s dedicated and intermodal routes. You can try out one of their programs, and if it doesn’t suit you, go into another one of their divisions if you like. The pay is good, the people are great and they want to insure your success like they have mine.
With all the advantages of being leased on to J.B.Hunt without all the hassles if I was an independent, it’s a no-brainer to be partnered with the best carrier in the Business.
Safety is a priority at J.B. Hunt so the equipment is well maintained and they have the highest safety rating for a carrier their size. This is most certainly an added benefit.
Read MY Story!
Low overhead and operating expenses, great fuel discount, health insurance plans and reliable equipment with a respected company are just a few reasons more owner operators are choosing to lease on to J. B. Hunt.
If you have any questions on how to get started with J.B.Hunt or would like more information about the programs available like the one that I’m on, call me at 1-866-314-KEYS or e-mail me @ keystrucker@yahoo.com
Stay Safe and Prosper,
Just to give another view. Now before I get started everything I’m about to post is speaking in general terms and not directed at any specific trucking company.
Keep in mind all carriers vary in their business model. But there are a few things that most do, because of the competition is doing it to either cut costs or increase the bottom line most other carriers are going to do the same.
One: lease operators are a way for carriers to cut the cost of doing business. By having a trucker go lease they save on cost of having an employee. I.E. 50% of the FICA, unemployment insurance costs, Workers Compensation costs, 401K contributions, and possible heath insurance costs. They also reduce their equipment costs and the cost to operate said equipment.
The leasing O/O is the one that now gets to now pay 100% of FICA taxes (on average around $3000 to $4000 per year more than when you were a company driver), Workers Compensation (typically $4,000 to $5,000 per year. or you can opt for Occupational hazard at about half the cost with a tremendous drop in the amount of coverage). 401k is now a SEP (Self employed Person) IRA and 100% funded by you. Keep in mind the research arm of ATA ATRI establishes the average break even per mile cost for truck load carriers every year. In 2009 it was $1.83 per mile. That’s what a carrier has to make before it profits with a company driver. For the typical lease operator that cost is even higher. ( of course that does include the amount paid to a driver and the associated costs) what that means is you need to average this to net at least what the average company driver earns.
Two: is many carriers that pay a percentage have a separate freight brokerage that actually books the freight and then takes a percentage fee off the amount charged the shipper and then passes it on the carrier side. (This percentage ranges from as little as 15% to as high as 50 % or more) This means a trucker leased to a company is being paid on percentage that is from 85% to down to 50% of what the freight is actually paying. Now grant not all carriers do this but you need to know before you lease on.
Three: the majority of carriers consider their lease and lease-purchase operators as revenue centers. They will find fees and charges backs they can legitimately charge to their lease operators to off set their other expenses. There are even some carriers who to their lease purchase operators charge an over mileage fee usually on any thing over 3,200 miles per week. This fee is added to the pay off at the end of the lease. Others won’t give you access to the maintenance account for repairs or tires, they are saving that to dip into when you eventually turn in your truck. There are several services and charges which are forbidden to be charged back to the lease operator by the FMCSA, be sure you know them. so be sure you know what you’re getting into before you sign on the bottom line. Remember in the leas purchase world less than 15% of those entering into a lease purchase ever complete it. Many who don’t complete the program are in worse financial shape than they were when the entered it. And many who do complete the program end up owning and older model worn out truck.
Four: Even with all the numbers stated in the blog article above if one knows what they are doing the potential for success having your own authority far exceeds what you’ll ever earn as a lease operator. But, and this is a VERY BIG BUT, if you are thinking of getting your own authority with out have a specific business plan and predetermined freight lanes and customers DON”T DO IT. Spot freight is great to fill the gaps with but you must have a preset freight lane with multiple customers and brokers to succeed.
So the bottom line is research the and research again whether you are going lease or going with your own authority. Know where your revenue is coming from , how much and how often. Know what it really costs to run your operation and include a fixed amount for your pay as a cost. Be sure your revenue over a month and a quarter will exceed your cost. If you’re not sure how to do this Google Anytime WebCourses and you’ll find the information you need. And finally, if you are thinking about a lease purchase, my advice is don’t, a less than 15% chance of success isn’t worth jeopardizing your financial life.
Tim Brady