Thursday, August 9, 2012

Owner Operator 101

You want to know how I keep busy, find loads, operate equipment frugally, and stay out of trouble? I may be able to help you with that. Step by meticulous step.

Before and after every one of these steps you should keep in mind the only organization that helps us drivers maintain a corruption free industry is OOIDA - the Owner-Operator Independent Drivers Association. I am not paid by them and I don't intend to be, but they fight for our rights and they are the only ones who do. Before you want to start driving, join OOIDA. It's $45.00 per year if you join online or over the phone (800.444.5791), and $25.00 a year if you find them at a truck show to join there. By joining, you will also receive their monthly magazine Land Line, which has a lot of great information about the industry, and provides drivers with new government and regulatory information. Believe me, it's money well spent!

Now let's get to the steps.

Step 1. Get your CDL.

The days of chauffeur's licenses are over. You must go to some sort of school to get your CDL. There are many different types of schools out there, so how do you pick one? First, you need to do some research. Many large carriers - Swift, Schneider, CR England and others - have their own schools and will place you in a truck type according to your training. Or, you can go to a school of your choosing, and then choose the company you want to work for after you're done.

In either scenario, you'll need to answer a few questions to help you decide what kind of carrier you want to go with - van, tanker, flatbed, long-haul, regional, etc. - these will help to narrow that down a bit, and help you decide which carriers and schools you should be focusing on.

How long do you want to be away from home? Are you free as a bird and can stay away for months at a time, or are you needing to be home weekly or daily?
Free Birds can go long-haul. Being home weekly, such as on the weekends or every three days can go regional or even local. Being home daily means you're going to be local only.

Do you like working outside, or would you rather never have to be in the elements?
If you don't mind the elements, then just about all types of trailers are for you; tankers, all platform trailers (flatbed, step-deck, double-drop, etc), van trailers, log trucks, and container trailers.

Do you mind heavy lifting, or would you rather not lift anything at all?
Don't mind lifting a few things? This gets interesting because you may find that all types of trucking involves occasional lifting. Van trailers can actually have the most physical labor depending on what it is you're hauling and for whom. Platform operators will have to lift tarps, chains, and straps; they will have to climb on the loads and be able to pull on the bungees and tighten down straps. Tanker drivers have to clean the tankers by climbing on top of the tank, opening the hatch and flushing the inside of the tank out, although most tanker trucks involve very little physical labor. Van trailers may involve unloading tires, pallets, boxes, insulation, and any variation of freight.

Do you feel more comfortable being able to see your freight, or do you feel safe with a load that you may never be able to see?
If you feel safer being able to see your freight, then log trucks and platforms are more your style. If you don't mind the freight staying hidden from you during transit, then tankers and vans will work for you.

Do you like being micro-managed, or would you rather take the reigns?
If you want to be guided through the process by a driver manager, working for a trucking company is for you, but if you want to be in more control, then finding a small carrier that will let you run your own ship is the way to go. The trick here is insurance. The barrier that stands between you and buying your own truck is the insurance companies. You see, you can only get insurance if you have experience and you can only get experience if you work for a carrier who has insurance. Most large carriers are self-insured so they can hire you right out school. Some smaller carriers also are self-insured. You will have to check around, but don't settle for the large carrier just because they have the best sales pitch. There is one way to get around this. If you happen to have a million dollars to be self-insured. Is that you? No? Yes? I'm guessing it's probably a "no".

Do you want the newest equipment, or will some good old stand-bys work for you?
For the newest equipment the large carrier is the way to go. Smaller carriers will have newer equipment, but it is usually reserved for the drivers with the most seniority.

Do you have enough cash to pay for the school, or do you need someone to help you?
If you have the cash, then you are able to stay out of bondage to the carrier which means you can leave anytime you want. This is obviously a benefit. If you can't pony up the money, then take the working loan and go to the school the carrier provides.

Do you mind working off your school expense over time (usually a minimum of a year), or do you want to be able to say goodbye whenever you choose?
This also relates to the previous question. If you don't mind waiting for your debt to be repaid, then you can go the trucking company's school route. Otherwise, if you pay, you are in charge of your job.

Once you've gone through these questions and answers, you can start to narrow your search as to which route you will take. I can't list all of the carriers who have their own schools, but there aren't many. You can pick up recruiting magazines at any truck stop which will have advertisements for most of them. It's a good place to start your research. There are also many community colleges who offer programs which you pay for. They often will offer financing options, but sometimes there are grants to go to these schools depending on which programs the federal government or local governments are offering.

This should be enough to get you thinking, but make sure you come back because I have more information coming.

To be continued..............


ElH said...

Ed, this info/insight. Is priceless...way to go.. what do you think about buying a older truck with a lot of miles as a starter,to see if doing the owner/op dream can really happen?? Also, I just love the long nose tractors, I've heard about the advantages of the aerodynamic noses, but honestly,the long nose has my heart...any opinions on that?? Thanks..

Ed said...

ELH, bear with me on these posts. I am not used to writing a regular column, so there a few sporadic grammatical errors. My editor, Salena is working with me on this.

Anyhoo, so it depends on your money situation. I started with credit card debt, no mortgage, and no car payment, and I started with a used truck. It was a Penske former rental truck and they kept good records of maintenance. I paid 26K for it and it had 500K on the odometer. It ran to 1,031,000 without any problems. So in this case I was in good shape. It wasn't until I started messing with it, that it had issues, and that is where my own Owner/Operator education began. I learned a lot about maintenance and running a profitable business the hard way. I lost tens of thousands or dollars making mistakes and I found the best system to stay out of trouble. It isn't a guarantee, but it has worked for me now over ten years of being an O/O.

You should get a conventional tractor because of the fuel mileage benefits, but you can get a cabover for cheap these days. Keep in mind that a cabover will most likely be old and not allowed in the state of California.

ELH said...

Thanks ED, will look forward to these educational posts, and with Salena as your editor, this is going to be. Exciting ..thanks again..
P.S. I'm. Looking at the Kenworth w900 with the nice sleeper. I know about the long nose, but I can't help myself.. the ones I'm lookin at are 4-5 yes old and ab out the 500 thou mlg range...we'll see, nothing will happen anytime real soon, my older son gets married in two weeks, I just got #3 out of college,so I'm still in recovery stage, but I can still dream for the upcoming year.. take care..

Anonymous said...

excellent post ed...keep it up

Ed said...

Thanks anonymous..

Ed said...

ELH, I can tell you now that if you want to get started now before you jump into the Owner/operator side of trucking, you should start asking around your local area and find a really good shop that has a good reputation. You should start getting to know them and talk to the mechanics etc.

Your goal is to find someone (and they ARE different than car automotive shops) who will understand that you are going to be bringing them your business. You want to get a shop that warranties its work. You want to find one that specializes in the type of engine that you are going to have.

I am not saying to bother them, but asking around and getting some recommendations will save you thousands in fees from unscrupulous shops. And there are many of those out there.

Even if it is a dealership, that is no guarantee. Since you can't lose any money because you don't have a truck, you can only gain from getting the info now. Also you will learn a lot from the people you will meet. Other drivers, mechanics, shop foreman, etc. etc.