Why is it so hard to make money as a independent?

Well, you could operate a calculator all day long and still not make anything. To make money in any business you need customers and revenue. The farther we are from dealing/negotiating with the actual customer determines what we make. Your company, your broker, your lessor, rather than your own customer determines what you make. Certainly a customer that values customer service has reason to value your services higher than one that does not.

The customers are out there in droves. Individually, though, we are way down the business food chain and many shippers don't want to talk to every desperate trucker. That's why brokers have a role, for example. To shield shippers from having to talk with every 1 truck trucker.

Who's your customer? Brokers? A carrier that leases a truck to you and you're hostage to their freight and the rate they pay you? How much direct sales experience do you have?

To make money in trucking, the ability to drive a truck's not worth that much on its own. Sad but true. The ability to drive a truck = wages.

 

It's hard for guys to see that they are two different occupations. Company driving involves taking orders and carries it's own set of responsibility. Not everyone can be a successful company driver. Being an independent involves giving the orders, it seems easy enough, but when calling the shots you need to make sure your decisions are the right ones. Especially owning a small company, you don't only have your family to worry about, but the families of your employees. Most guys can call the shots, very few call the right ones. Company driving requires little to no management skills. Owning a company is nearly all management. Neither position is better then the other, it's what your skill set is that determines the success of either.

 

You know, this could change but it's structural.

First the public would have to become aware of the poverty, the health issues, the long hours, isolation that OTR drivers face. Get drivers paid for ALL hours worked, as a starter.

Right now, Landstar, Schneider Choice, are the most well-known ways for a driver to move ahead as an owner. Many good carriers, like FedEx, require newer trucks, bigger investments, bigger risk. Imagine if local companies were ENCOURAGED and had INCENTIVES to hire local, smaller trucking firms--just as communities have become more aware the value of buying local. Support your local 1 truck truckers. A trucker with an older, cheaper truck with pride in that truck, has less overhead than the big guys.

Am I dreaming? Maybe, maybe not.

 

you are confused between a lease/purchase deal and leasing your own truck to a carrier. huge difference.

 

I guess I was lucky, I have made a good living for 35 years now, I haven't suffered poverty , I have worked many hours but I would do that with any job. and I don't want anything to do with getting paid for every hour. that's a company driver mentality. I own my truck and the profit I make is determined by me , and I get paid for every hour I work in reality.

I determine my fate by the decisions I make.



Schneider doesn't belong in the same sentence as landstar frankly. and fedex is just another mileage plus fuel charge deal, nothing special at all.

 

I agree with Skateboardman, looking in terms of hours is a company driver mentality. One thing to keep in mind when looking at leasing or lease purchasing is if the company wasn't making a good buck they would not be doing it. I've never been on the truckers end of leasing. I've had drivers lease onto me, and it's good money for the company. For the amount of work and energy the company needs to exert into the lease the percentage on the return is very lucrative. I'm getting off the question a little bit, but the point is if your gonna run your own business run your business. Sometimes leasing on is the best business move sometimes the more profitable move is to go solo. It's hard to get established as an independent, but once your established the return is greater in the long run.

 

I was referring to company drivers with regard to pay for ALL hours worked under 'rising tide raises all boats'--if I didn't make that clear. Part of the reason it is so hard for independents is that we have this industry practice of work for free by company drivers; change that and rates will change along with it and doesn't have to raise the price of toilet paper much.

Swift has already said that in order to pay company drivers better, they will purge customers (shippers) who don't belly up to the bar with them and pay better rates. In the Mid-West where I run rates have been pretty attractive lately, in part because of massive amounts, warehouse fulls, of discard soy and corn seed. I've seen offers lately on the boards of $3/mile and have been getting that, $3/loaded mile on my outbound loads.

Supply and demand basically determines the 'rate' for freight and is driven downward by industry practice where drivers give up 2 hours loading, fueling, scaling loads, paperwork and logs, and unloading for free. Imagine if you're Heartland Express (plus GTI) with almost 5,000 seats and what that comes to each day in lost wages and underbid freight.

Want to get rid of cheap freight?? Get rid of free company driver labor!!

 

two reasons I think:
1. Under capitalized. Many are a breakdown away from bankruptcy. It's very possible to spend $10,000 - $20,000 in repairs, maintenance and upgrades in the first year of owning a truck. Not to mention lost revenue due to the down time. I'll wager 90% don't have a means of covering those expenses.

2. Dead Miles: It can be tough to find freight without bouncing too far when you're a one truck deal. $2.50/loaded mile might sound good but how many unpaid miles (and hrs) until your next paid mile? The farther you bounce, the more you need to get on your next load.

 

As long as I can remember drivers have always been paid by performance, either mileage or percentage. The exception are those who work locally and do LTL freight. This is an industry that functions based upon the free market. You can't blame company drivers if rates are low. They don't determine their rate of pay. That is determined by the marketplace. If you don't like the rates then you need to look at the owners of the equipment and that includes owner operators, independents and fleet owners. When some are willing to haul for $1.40/mile then shippers and brokers look for others to haul for the same rate. It is up to the owner of the equipment to determine rates. Rates have always been fluid. Even when rates were regulated there were still those who were willing to cut rates in order to get the business. When someone cuts rates I assume that they don't know how to run a successful business. When you are cutting rates to get business, you must have nothing else to sell but a cheap rate. Most independents that I know haul for decent rates and don't go in and try to get business based upon being the cheapest. I prefer selling a quality service where the shipper and/or broker need a high level or service or at least a dependable resource to get the load picked up and delivered in a timely manner. When you haul for cheap rates then you cannot give quality or reliable service. Nor can you keep up your equipment. When you cannot afford to maintain your equipment then you won't be a reliable resource. I do place a value on the service that I provide. Those who use my service also place a value on the service that I can provide. There are independents who don't have a clue how to price their service. They have no idea how much it costs for them to run their business or what is going on in the marketplace. Some of the mega carriers do haul cheaper freight just to keep drivers moving. I think drivers are being paid more today than ever. Most drivers only consider their paycheck when looking at compensation. Few look at what the company contributes to their social security or benefit costs, such as health insurance. If you are a company driver and have health insurance paid by your carrier, you received a raise this year due to increases in insurance premiums caused by obamacare. As an independent you are responsible for all costs associated with running your business and that includes various insurance costs. Driver compensation is also usually over looked by many owner operators and independents. Remember, there is more to the costs of running a truck than fuel.

 

well said G/MAN