Commercial Drivers: Consider Carefully Before Steering Toward the Owner/Operator Route

by Mark Kinsel
(Indianapolis, Indiana)

Commercial Drivers: Consider Carefully Before Steering Toward the Owner/Operator Route

Mark Kinsel is the President of Driver Solutions and has passionately shared his knowledge and experience with young truckers for the past 19 years. He also writes for www.GreatCDLTraining.com, a national leader in commercial truck driver training.

At some point, the idea of being an owner/operator will probably cross the mind of every commercial driver. Many of them, especially the greener ones, will probably feel like it is something they should plan on going after somewhere down the road.

The allure of potentially higher paying truck driver jobs and the opportunity to be a free agent sounds great – who doesn’t want that? Here’s the thing: the whole idea is a bit over-idealized. Let’s take a moment to demystify the dream.

Down to Business

As an owner/operator, you are essentially starting your own business. In order to be successful, you should be an entrepreneur first and truck driver second (in terms of your strengths). Why? Well, the commercial driving industry is highly competitive and the big challenge is going to be figuring out how to have an edge on big companies that not only have an established reputation, they get discounts on their fuel, truck parts, and truck maintenance.

If you really are trying to make more money in the trucking industry, you might as well set your sights higher and try to establish a small fleet of your own. Being a completely independent, solo owner/operator is sort of like setting up a one man coffee shop to compete with all the Starbucks, Tully’s, etc. in your town. Economy of scale is the reason you don’t really see this. Profitability depends on being able to significantly reduce costs of operating such that the ratio of income after costs to total manpower is comparable to that of a larger business. I’m not saying it’s impossible, just unlikely – a bit like playing the lottery.

You also have to consider that purchasing your own truck is just the biggest and most complicated cost in the venture. It is followed by the ongoing costs of the aforementioned as well as the various types of insurance that come with the trade (cargo, liability, disability, life, etc.).

You are also going to want to have substantial emergency funds standing by for getting on top of the learning curve as an owner/operator and dealing with the ups and downs of this type of venture.

If you don’t mind taking on the stress of keeping all that under wraps, you still have to out-bid everyone on loads and keep deadhead miles to a minimum, which means your take home pay is going to get more deeply gouged under stiff competition.

The demand for drivers is also on a fairly steep rise in 2013, which means the competition is bound to be tougher in the coming years. Many owner/operators lease their truck on with a bigger company to take care of a lot of these things that independent owner/operators have to deal with. After taxes, you likely will not make significantly more than a standard company driver and could possibly even make less.

What Are You Really Paying For?
Unless you really are a business prodigy, the real benefit of taking the owner/operator route comes down to freedom and personal-life flexibility. You may find it easier to move between companies if you find it best to lease.

If you are making enough money, you will probably be able to take time off when you want. You will always have to get freight to its destination on time and in good condition, but you will have more control over where you go, how far you go, and what you haul.

At the same time, making enough money to survive or thrive is in your hands. The question you have to ask yourself is, “Is this big investment worth the risk, complication, and hazy future financial outcome?” For those who love trucking but can’t stand some of the company things that come with it, the answer may be yes. Just make sure you are being realistic about what you are getting into.