Trucking: Owner Operators/Drivers, truck driving school, load brokers

Question
QUESTION: Bob,

Hello I would like to ask you a questions.  I am considering going to learn how to drive trucks and obtain a CDL.  I have looked at several companies that I would have to either pay for the training up front or they willl train me and I would have to commit to them for at least 8 months.  However my question is this. I am really not interested in driving trucks.  I would liek to purchase a truck or two and then hire drivers to drive them for me.  So would I be considered a Owner Operator or some other name and how would you suggerst I go about finding loads for my truck once I get int he business and what other things will I need to obtain.  I am looking at the www.dotauthority.com site about obtaining my authority and not sure if I cam going the right way about doing all of this or not can you please advise as to what I need to do.

Thanks

Khari
ANSWER: Hi Khari.

Well, if your only interest is in owning a few trucks and hiring drivers, then there is no need to a company sponsored driving school.  If you have an interest in driving, then I would look into it.  You might consider getting a CDL from a truck driving school, just so you can operate a truck, if needed.

An Owner Operator (O/O) is just like it sounds, you own the truck and operate it.  In your case, you would be a small fleet owner.  After you buy the trucks, your next step is getting liability/cargo/bobtail insurance.  Then file for your DOT/MC number as well as registering with the FMCSA.  All of this can be taken care of through your state's Department of Transportation.  Sites like www.dotauthority.com can help you too, but contact the DOT to make sure you have everything.

Past that, you can find loads through sites like www.getloaded.com or by calling load brokers in your area.

Finally, since your starting a company, I would contact a lawyer and look into forming a corporation or LLC.  This will help you from taxes to liability.

Good luck!

Bob Stephens

---------- FOLLOW-UP ----------

QUESTION: Bob,

Thanks for the response to my question. However if I did purchase two trucks and I drive one of them and then hire a driver how you would you suggest that I get help in obtaining loads to carry or how to locate a company that would hire my small fleet of trucks to run loads for them.

Also is it necessary to have authority nationally or just in my current state.

Also any other help that you can give to me in starting a truck company would be appreciative.

Thanks

Khari

Answer
Hi again, Khari.

You will cut your costs by leasing out to a company.  Problem is, you cut your profit too.  Leasing to a company isn't all that bad, though.  Many pay for insurance, base plates and you run under their DOT/MC numbers.  They will also keep your other driver running for you.

If you decide to go it on your own, you can find loads from sites like www.getloaded.com.  When you get to know the brokers, you just call them directly.  When you get to know the shippers, you bypass the brokers and call them directly.  I've worked for companies that gave me a pad of paper, pen and company credit card.  On the pad was the names and phone numbers of five brokers.  One in the South, Midwest, far West, East Coast and Northwest.  The fleet owner basically told me "I don't expect to hear from you again."  I was in charge of finding my loads and making sure the paperwork got back to the office.  Fuel and breakdowns were what the credit card was for.  I prefer to be a little more hands on with my drivers.  I made money for the owner, but other drivers may not run that hard and it'll cost him money.

That said, weigh your options.  If your driving, it'll be hard to find loads for your other driver.  You may have a family member get involved to help keep him/her running.

If you want to lease out.  Go to sites like www.bubbajunk.com or www.classadrivers.com.  Many companies on there would be happy to have your trucks sign on.  Another perk with leasing is many companies will install satellite communications in your trucks.  It sure beats sitting on the phone and numerous call backs to find loads.

If your going Interstate, you'll need your DOT/MC numbers and an IFTA tax number.  Intrastate still needs a DOT/MC number but IFTA is not needed.  Your will have to get a SSRS (Single State Registration System.  Call your state's DOT office.

The biggest piece of advice I can give you is count every penny.  Start finding out what your costs will be and where can you save a few dollars.  For example, when I started out, I bought used trucks with an engine warranty.  New ones are great, but a new company should save the money.  If you don't get an engine warranty, make sure you have the money set aside for an engine rebuild.  This can run $10K easy.  Granted, a new truck has a new engine, but it also depreciates the cost of a new Ford Mustang when you drive it off the lot.  Now your company's net worth is immediately in the red.  Not a great way to start a business.

Shop everything!  Trucks, insurance, companies, and even the grease you put on the fifth wheel.  That's how you make it in trucking.  Compare, study, and compare some more.  Be realistic about your income and write up a business plan.  Study projected income versus your fixed (truck payments, insurance, etc.) expenses and variable (tires, fuel, repairs) expenses.

Don't forget to join OOIDA (www.ooida.com).  They can help you with the business end of trucking and save you money.

Good luck!

Bob Stephens