WE RECOMMEND THAT YOU CAREFULLY CONSIDER THE DECISION
TO RUN UNDER YOUR OWN AUTHORITY
If you run under your own authority - as opposed to under lease to a trucking company
- you usually need to secure liability and cargo coverage as well. 1st Guard Corporation
does not sell these lines of insurance.
Many owner operators believe they can increase their earnings by running with their
own authority rather than under lease to a trucking company. A quick look at the
numbers may lead you to a different conclusion.
The percentages obviously vary, but in general when you run for a trucking company,
the trucking company pays you 75% of the revenue from each load you haul. They keep
25% for themselves, but in return for this share a reputable trucking company will
provide you with a number of important services. First and foremost the trucking
company will find you loads to haul. This benefit enables you to spend more time
behind the wheel earning money and less time chasing down freight.
The second most important service a trucking company provides is liability and
cargo insurance. Specifically when you sign on with a trucking company you should
fall under their liability and cargo coverage. This advantage saves you the time
and expense of finding your own liability and cargo insurance, which tends to costs
thousands of dollars per year. You will still have to purchase your own physical
damage (collision) and nontrucking liability (bobtail) insurance. It is much more
difficult for an owner operator to secure liability and cargo insurance on their own.
Trucking companies also provide an array of other services for their owner operators
- Fuel Surcharges
- Quick Settlements
- Fuel Tax Assistance
- Collection Service
- Regulatory and Compliance Assistance
- License Plate Financing
- Breakdown Assistance
- Terminal and Agent Networks
And that only touches the surface. Conversely, when you run under your own
authority you have to take care of everything yourself.
How much does that take from each load? In round numbers:
- Insurance 8%
- Factoring 2%
- Broker Fees 10%
- Finding your own freight 3%
- Compliance and Taxes 2%
- Value of Fuel Surcharges and Other Services 2%
Guess what? The overhead costs for any given load you haul under your own authority
appears to exceed the 25% a typical trucking company takes; except now you’re doing
all the work and bearing all the risk.
Bottom line: If you run for a reputable
trucking company you will generally earn more money.