Category Archives: Owning Your Truck

Owner Operator Extras

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Companies that use a large number of Owner/Operators (O/O) may provide their contractors will programs and extras to assist them in being successful. Like a broken record, I have to repeat the statement, every company does thing differently and it is important to get in writing all matters and to make sure you understand them before signing your truck up to work with any company.

Qualcomm or Satellite Service

With so much freight being sent Delivery Just In Time or Time Sensitive, many shippers and consignees want instant access to the status and location of their shipments. The flagship of satellite tracking is Qualcomm. The cost of installation of the units and the monthly maintenance fees care an added expense for Owner/Operators. As a part of recruiting, companies may offer to pay for either the installation cost, which can easily be $500 or more depending on circumstances and also the monthly service fees. A consideration regarding the satellite equipment is that companies may charge you a deposit out of your settlement checks and when (if) you terminate your agreement with them, they will hold the deposit (which could be $1,000s of dollars) until you return the equipment in good condition. If the equipment is damaged, they may deduct money from your deposit or final settlement. If at all possible, it is recommended that you personally deliver your removed unit to prove no damage or have it removed by an authorized installer for the original company.

Fuel Purchase

Fuel is the largest single expense of operating a truck. Anything that you can do to lower this expense is critical. Some companies offer fuel purchase programs that allow drivers to fuel up at selected locations/sources for a discount. This may be done by enrolling the O/O with a fuel card such as Fleet-One, Fuelman, etc., or with a fuel network (Pacific Pride, CFN, etc). While individual trucks can enroll in these programs, a company that enrolls 100s of trucks may be able to achieve better rates and discounts. Companies that provide refrigerated services may also arrange for discounts on used for the trailer reefer fuel, which is not always included in discount programs.

Maintenance Programs

Tires and routine maintenance (Oil/Lube/PM) expenses are always on the truck owner’s mind. These little expenses add up over the course of a year. Larger companies will try to establish discount programs thru nationwide or regional maintenance companies such as Blue Beacon, Speedco or Wingfoot.

Benefits

The availability of benefits such as medical, dental, disability and life insurance at group rates can make them much more affordable. Even under Obamacare, group plans can be a much better bargain.

Truck Insurance

Your truck liability insurance is of course a substantial annual expense where you can benefit from 10% to 20% in group discounts. This could be more important if you are newer driver with less then 5 years of experience. Even if the company does not advertise this being available, check with the recruiter to see it is available. It is also important to know if you have to provide freight insurance or if the company is providing it. If you are required to provide it, does the company have a program that allows you to obtain it at group rates.

License Plates

Another one of those programs that may save the Owner/Operator money is when the company provides base plates. However, consider if the plate will be in another state then where you live so that you do not encounter both states charging you income taxes. Check with a tax professional before you plate your truck in a different state then then your residence.

Fuel Tax Filings

You will be required to file IFTA reports and pay appropriate fuel taxes regardless of where you plate your truck and where you run. Some truck owners are comfortable filing their own IFTA reports. while others would prefer not to do the actual paperwork. Some companies will prepare the filings for free. Some companies require that you use their services.

Trailer rentals

Sometimes Owner/Operators are required to provide their own trailer. Not all owners have already purchased a trailer. They may have been working for a company that provided trailers or they may be changing from vans to reefer or flatbed. To assist new lessees, companies may have contracts with trailer sales companies with lower initial payments or better interest rates on the lease. It is important to shop around if you will be needing to obtain new equipment. If you have a relationship with your local credit union or dealer where you purchased your truck, you may be able to get a better deal.

Loaner Truck

breakdown coverage
Truck breakdowns happen. When that happens you sidelined for a few hours to a few days to a few weeks on more serious events. The company you contract with may offer some form of Loaner Truck program allowing you to continue to work while yours is in the shop. Do not jump on this without checking with the company performing the maintenance about their programs. Some dealers either have trucks available for short term use or have arrangements with leasing companies. While a loaner truck program may be available, it will not be free and may not be a good deal. The primary purpose of offering loaner trucks is so that the freight will be moved – not your daily operating costs.

Settlement to bank account

Unless you have a spouse, friend or family member that can receive your mail and deposit your checks every week, you may want to make sure that what ever company you sign on with can deposit your payments direct to bank or a payment card. Smaller companies may not offer this as the banks like to charge excessive fees for such services. Unless the company is large enough to muscle the banks into better deals, they may not want to offer direct deposit services. Luckily, several non-bank financial services companies are starting to provide direct money transfer services.

Factoring of Load Payments

Cash flow can be important to all businesses – especially 1 or 2 truck owner operators. Depending on your lease arrangements you might have to wait 1 or 2 weeks for payment for delivered freight. A few sudden maintenance bills or even personal expenses might require you to get your money fast. Freight Factoring is a service where for a fee, a company will pay you sooner for your outstanding invoices. This service could also be very important if you are a new leaser and need to buy fuel. Be very careful when using freight factoring because it is not expensive and over the course of a year could become a large annual operating expense.

Mid-America Trucking Show – March 27 – 29, 2014

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The Mid-America Trucking Show, at the Kentucky Exposition Center in Louisville, KY., is more than a trade show.

As the annual forum for the heavy-duty trucking industry, attendees will have the opportunities for face-to-face interaction between industry representatives and trucking professionals.

Exhibitors will obtain marketing that can effectively introduce new services or products, increase brand awareness, promote products and connect with suppliers, customers, and prospects. Those in the trucking industry can research products and services, meeting with representatives and interview potential vendors and contractors.

MATS is where the industry comes together, where attendees network with Fortune 500 companies, where media outlets from around the world go to report on the business of trucking, and where trucking business gets done.

Mid-America Trucking Show – schedule

Thursday, March 27 VIP Session: 10AM – 1PM | General Admission: 1PM – 6PM

Friday, March 28 General Admission: 10AM – 6PM

Saturday, March 29 General Admission: 9AM – 4PM

Mid-America Trucking Show – Location

Kentucky Exposition Center
937 Phillips Lane
Louisville, KY 40209

Parking will be available for autos, RVs, and even Semi-Trucks with trailers.

Seminars may include: (Schedule subject to change)

  • CMV Inspection 101
  • Sleep Apnea-No Rule Rule on Sleep Apnea
  • Accounting/Finance
  • Big Time Training on a Small Budget
  • Increasing Tire Life and Ride Control
  • Pre-Trip Inspection
  • FMCSA Hot Topics

More information at http://truckingshow.com/

So, You Want to Be an Owner/Operator? Not so fast.

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Richard Stephens
March 9, 2014

I have been following a soon-to-be Owner/Operator on Twitter for the past couple of months. They (a husband and wife team) have been tweeting all of the aspects of their progress, from getting licenses to buying their rig. It would seem that all of the paperwork required would scare most drivers into just driving for a company. When they finally found the right truck, you could just “hear” the excitement in their posts. The pictures they posted of that shiny new rig made you feel like doing a fist pump and shouting, “score!”

Their journey has certainly opened my eyes to all of the paperwork required before you can haul that first load. Yet with all of the hoops they had to jump through and hurdles to bound over, they were missing one critical piece in their quest in becoming a successful O/O: software.

“Software? I don’t need no stinking software to drive a truck!”

There is no doubt that we now live in the digital age. It’s all around you: smart phones, PCs, tablets, GPS devices, etc. You may certainly use a printed map to help navigate. You may certainly use a printed log book to keep track of hours. And, you may certainly use pencil and paper to track your mileage in each state (or province), the roads you traveled, where you got fuel, and any maintenance performed on your rig. However, with all due respect to the “graybeards” still out there driving, this isn’t 1975.

Software has become the accepted standard for replacing pad and paper. Besides needing software to track your driving hours, you need software to track your business. That’s right; as an Owner/Operator you are now a company. You have bills to pay, truck(s) to track, IFTA and DOT maintenance reports to file, loads to find, and money to collect from customers.

So, just how do you find the right software to help your new business? First, ask your fellow truckers. Yup – word of mouth is a great way to find out what works for someone else. Second, ask truck organizations you trust (such as OOIDA) what they recommend. Third, use your favorite search engine to look for software reviews. And finally, call the software company and ask to speak with the developer of the software.

“What?! Talk to the geek that writes the software? That’s unheard of!”

Hear me out. I hate talking to sales people, as they will simply tell you everything you want to hear. I find that if I am “allowed” to speak to the developer, that I can get specific answers to questions, rather than the politically correct, scripted answers. The developer knows what the program can, and more important, cannot do. If you cannot speak with the developer, then don’t buy the software.

The best software doesn’t necessarily have most expensive price.

That’s right. Regardless of what your country’s leadership reports about the economy, we are still in the middle of an economic “down” period. I have noticed that a lot of software companies have actually raised their prices to compensate for fewer sales. The software company that actually cares about YOU, the O/O, will reflect that in their pricing. So, look for a good “bang for your buck.”

Another key factor when looking for the right software is the “nickel and dime” aspect. Every software product has its initial licensing fee. That’s what I call, “the first shoe to drop.” The “second shoe” is, “What are the ongoing costs?” Here are five items that are important to know:

Are there any costs in upgrading to newer versions as they are released?
Are there any monthly costs just to use the software?
Are there any costs to get training for how to use the software?
Are there any costs to get technical support?
Are there any costs in getting help when you need to move the software to another PC?

I always expect to pay an up-front fee to use software. However, I detest monthly fees and fees to get any kind of support. You need to factor these items into consideration before buying the product. And if they won’t help you move the software in the future, then that should raise a huge red flag.

I recently spoke with a trucker who was using an older version of his trucking software when his hard drive crashed. Luckily, he had a backup of his data. When he called the software company to help him get going with his new hard drive, they would not help him because he was on an older version. WOW. Talk about the fastest way to lose a customer.

So, doing a little homework will get you going with the right software. Just don’t forget this critical piece when beginning your O/O journey.

Richard Stephens, owner of ALMSys, Inc., is the author of the “Rig Expense Tracker” trucking software. For more information on Richard and his software, visit his website

Why not to Lease Purchase

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Note: This information provided from off hand conversations and is not based on confirmed personal knowledge. Counter points and additional dialog from drivers and companies who are or have been used lease purchase options are encouraged. Please contact me.

Prolog: Whiles in truck driving school, I saw numerous advertisements for companies offering lease purchases. Once out of school, I looked at numerous companies’ websites looking for work. I had, at the time, been working for myself for years, and liked the pride of ownership idea. Thus, I strongly considered lease options. However, my finances at the time did not give me the option to consider it. And I wanted a couple years of experience first.

The Theory of Lease Option

One of the allures of truck driving is the independence from the office. While you might have a boss that is looking over your shoulder, it is only electronically. At least as once you have completed any trainee time, and assuming your are not running as part of a team, you will be alone. Very alone at times. If you are running an assigned truck, you get a certain amount of freedom to lay out your stuff in the cab your way. You can, to a point, install extras to make the sleeper area your little domain. If you have a different truck often, you have few options to make it your own.

Regardless, the truck still belongs to someone else. They may have restrictions on any modifications you can do to the truck including mounting of CB radios, TVs or other electronic devices. Another kink is that some companies may limit what you can have in the cab/sleeper. Because of the concerns about excessive electrical loading, some companies will restrict or even prohibit such items as microwaves and refrigerators.

Now, in the event that you own the truck, you have greater freedom to customize and accessorize the truck to you. And the additional of such things as a refrig, a microwave, a TV with satellite, etc., can greatly increase your quality of life while on the road. A lease option gives a driver with less then sufficient down payment and or a blemished credit history to enter into the truck ownership business. Leases, unlike rentals, do include the option for the lessee to purchase the truck at the end of a specific time frame.

Execution of the Lease

Many lease options available to new or newer drivers are in direct concert with the trucking company that will be handling the dispatching and providing the freight that will be used to service the lease payments. While most (larger) truck dealerships and numerous truck financing companies provide truck lease options, they are generally only going to work with drivers with more experience and or stronger credit backgrounds. This relegates many drivers to doing a lease option directly with a trucking company.

This may or may not be advantageous. Well, it will always be advantageous to the company, it is really only a question of if it will be good for the driver/owner.

Here is the problem. If the company already owns the truck, by leasing the truck to the driver, the company basically transfer the obligations for the truck to someone else. The company still controls when and where the truck runs, which loads the truck gets and how many miles the truck works The company in essence still owns the truck, but the payment is coming out of of the driver’s pocket. In the event of slow times, the company can keep it’s own trucks busy or at least busier and let the lease trucks sit idle. After all, the driver is on the hook for the lease payment regardless of if he is working or not.

And since the lessee/driver is responsible for maintenance, the risk of a large repair bill is no longer a concern of the company. When a company has 100s of truck under dispatch, that becomes a large maintenance reserve. Split half those trucks off to leases, and clearly there is less tire replacements, less major and minor maintenance reserves.

Lease Defaults

Some less then honest (with their drivers) companies, are known to release trucks and trailers after a previous driver has defaulted. This can be easily achieved. During the initial lease years, the company dispatches the driver with plenty of miles. After a time frame, the miles start getting less and less. Eventually, the driver is getting so few miles that they can not afford to maintain their truck payments and have any money left over to take home. After a while, the driver throws in the towel and goes looking for a job with another company. The truck then returns to the original company under the lease, who then can lease it to another driver.

If the company does this a couple of times, it can basically make a profit off of the truck in additional to the money earned from the use of the truck to handle revenue freight. Some companies also add numerous small deductions, with holdings and reserves from the settlement checks that it reduces the net pay far below the advertised per mile or percentages, by as much as 20% or more.

Now, I am in now way saying every company does this or even which companies might be doing this. It is important for the driver that is considering entering into a direct lease purchase with a trucking company to carefully review the contract. Knowing if the truck has been previously leased or not could be a major key to motivations of the trucking company. A lawyer and or accountant should also review your lease before you sign it. And be alert to the end of lease purchase price – it may be so large as to not really be worth it.

Pride of ownership is a great reason to be a lease operator, however, fancy advertising and catchy slogans should not.

Happy Trucking, John

Trip Permits

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Trip Permits

Trip Permits are (generally) short term special use authorizations for a truck to operate with a state it does not normally operate within or hauling an unusually large or heavy load, even in the base state the truck is licensed in.

Many trucking companies do not pay the registration fees for all their trucks to be operated in all states. They many only establish authority to operate their trucks in a hand-full of states where they do most of their business. However, occasionally they need to send one or more rigs to other states to deliver or pickup cargo. TO legally enter a state and travel it’s highways, it is necessary for the company to obtain a Trip Permit. This can be done several ways. The company can contact the state directly and complete the process or the company can use a 3rd party commercial truck permit service. [If you google.com or bing.com Trip Permits, you will get dozens of companies that provide these services.]

The states, for the most part of made the process easy because it is all about revenue collection. To get the permit, you pay money. Now there are exceptions to the easy to do policy. Some states are much friendlier to work with then others. Names will not be named. That is one reason many companies will just turn to a commercial permitting company. Since these companies do this all day long and many have agents on duty 24/7, the extra cost of using them is offset by their ability to navigate the processes for each state and get it right the first time. A permit with errors could result in major fines and problems, including the truck and cargo being seized, until the issues are resolved.

Another common Trip Permit situation involves the moving of large or heavy loads. Loads exceeding 80,000 lbs generally must have special use permits. Key exceptions are that in some states, such as Michigan, truck/trailer combinations may have extra axles and thus authorized proportionately large loads. However, these trucks are restricted to in-state only and also pay substantially higher registration fees in the first place. Regardless of obtaining a trip permit, a truck is not allowed to haul heavier loads without more axles/wheels so it is not a simple matter to get an over weight permit and then put more on your standard 5 axle/18 wheeler.

Special Use Trip Permits may be required for wide and/or tall loads. As a part of the permitting process, the state(s) will identify the routes the load is authorized to take, the hours when the load can be moved (generally not at night) and special equipment/banners/markers that must be attached to the load. Additionally, the trucking company may be required to hire ‘Escorts’ to either precede the load, follow the load or both. Extra ordinarily large loads may have a police escort leading the procession, two private escort cars in front of the load and one of them with a height pole to check for anything not high enough to allow the load to pass under, and then a following escort car to warn drivers coming up from the rear an attempting to pass the load. All these requirements will be noted and specified in the trip permit or authorizations.

In the modern day of computers and online services and the use of the IFTA and IRP, trip permits are not as big an issue as they use to, however, a career truck driver will likely encounter a situation where they will need to deal with them.

International Registration Plan (IRP)

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International Registration Plan

The International Registration Plan (IRP) is a cooperative reciprocity registration agreement between the 48 contiguous United States and the Canadian Provinces. Unlike automobiles, each state in which a commercial truck [or trailer] is operated, the states want the truck registered with them which included paying appropriate taxes and receiving a license plate. However, that could require a truck to display 50 or more license plates depending on where the company operates. And this would be for every truck power unit and trailer in their fleet.

Enter the International Registration Plan.  IRP’s fundamental principle is to promote and encourage the fullest possible use of the highway system. This is accomplished by encouraging and enabling trucking companies to efficiently and easily handle freight in multiple states, thus providing economic activities.

Rather then the motor carrier contacting each state registering their trucks, individually, where they operate, a base ‘Apportioned’ tag is obtained from the company’s home state. The company then uses the IRP to selectively register the truck in all states/territories where it will be operated. The IRP then apportions the truck’s registration fees to each of the accepted states. You can check the IRP’s website for specifics on the mechanics of this. Now rather then a boat load of paperwork and license plates, the truck has one plate and the driver carries a card with the states of authorization to operate in the cab. In the event of traffic stop by a police officer, the driver hands, among other things, the base plate registration and the IRP ID card. This allows the officer to know the truck is authorized to operate in that state.

As the more states a truck is authorized to operate in the costs go up, some companies will only ‘register’ the truck in a few states – those states the truck is likely to operate in. If a company only operates in the Pacific Time Zone States, it would not be prudent or cost effective or paperwork logical to also authorize 50 trucks with trailers to operate along the Eastern Seaboard.

The draw back for not registering every truck and/or trailer in every state is if the company is offered an opportunity to haul a load to one of the unauthorized states. The company can turn down the work, which may mean it would not be offered such loads in the future. Or the company can accept the load, but the truck could be ticketed and seized if caught driving without proper permits for every state along the route. This is another advantage of the International Registration Plan. The ability to obtain temporarily permits for those states to legally operate.

It must be noted that there are two types of permits that will need to be obtained, if necessary. The registration via the International Registration Plan, and the fuel tax permits via International Fuel Tax Association (IFTA).

A company can file and maintain their own permits, but like everything, there are costs both direct (membership fees) and indirect (manpower, training) to handle permits. This can be especially expensive in smaller companies. There are numerous companies that provide permit services. These companies can generally handle both IRP and IFTA permits as needed. However, temporary permits are much more expensive if used extensively over full year permits. A company would be much wiser to obtain all permits that they may need for the entire year. Another problem with temporary permits is that there can be delays in obtaining them for those last minute loads, risking missing deadlines.

This is only a brief overview of the IRP system and is designed to alert the truck driver to the fact that the International Registration Plan is something they need to be aware of with regards to their truck’s paperwork.

Safety Inspections – The Right and Wrong Ways

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Safety Inspections – The Right and Wrong Ways

Many truck drivers treat safety inspections as either not important or optional. However a professional truck driver understands that proper equipment operations is paramount to the truck being operated on the highways and not place the driver, the traveling public and the cargo at risk. Being a responsible truck driver means that the driver will pick up the designed cargo at the appointed time and deliver it where it is suppose to be when it is suppose to be there and in the condition it is suppose to be in. This can not happen if the there is an accident or a breakdown on the side of the road.

As the root of being able to do his/her job properly and not endanger other uses of the highway or even people living and working along side the route being traveled, the driver should ensure that the truck and trailer is in proper condition.

The Federal Motor Carrier Safety Administration (FMCSA) mandates that drivers complete a detailed daily safety inspection, indication the inspection on company designated forms and that records of such inspections be maintained by the company for review if necessary.

Long before the federal requirements were in place, truck drivers would do inspections – however, different drivers always had their own standards of what was necessary. Some would check the oil and radiator water level, turn on all lights and walk around the rig checking that lights worked. Many would ‘kick the tires’ to see if any were flat. Some used a tire thumper. In reality, this kind of inspection is deficient at best and ineffective in detecting many hazardous conditions.

The use of a form or check list is the only way to insure that you do not miss anything. Just a few of the key inspections a professional truck driver will repeatedly and consistently perform:

Low Air Pressure Alarms If t.he truck has been parked and all air has bleed from the system, then the driver will be able to determine that the low air pressure alarm is working. However, if for some reason (any reason) the system has normal operating pressure in the system, the driver should, with the parking brakes set and the engine OFF, repeatedly pump the brakes to use up the air in the tanks until the low air pressure light/buzzer go into alarm. Seems stupid? Well, going down the road at 75 miles per hour and discovering you do not have enough air pressure is a bad time to find out the warning system was not functioning properly.
Kicking Tires / Tire Thumper. Ninety nine out of 100 drivers will not admit this, but there is really only one way yo know if your tires are at the proper air pressure – a tire gauge. Is it convenient to check 18 tires for the right pressure, especially at 5 in the morning when it is cold and raining? NO. But thumping or kicking a tire will only tell you (at best) that the tire is not flat. It will not tell you it only has 70 lbs of air when it should have 110lbs. A low tire is a major safety threat. When a tire is lower then optimum air pressure, the sideways will excessively flex when operating at highway speeds. This sidewall flexing will cause a temperature buildup inside the tire. As the temperatures increase the tire is much more likely to separate the tread section from the tire body. The result is that now there are large pieces of flying tire on the road way which could strike another car/truck or leaves the ‘alligator’ in the middle of the highway which other drivers will now have to avoid. Also, since this will result in a flat tire on the truck or trailer, this could cause the load to shift causing a catastrophic accident. At the minimum, tire air pressure should be checked every few days and never less then once a week – convenient or not. Tire tread condition should also be checked each day looking for any deterioration or signs the tire may be breaking down.

Lights: Among the easiest and yet one of the most important safety checks. The FMCSA actually specifies that all lights affixed to the outside of every truck and trailer must be operational. This includes not only the obvious headlights, brake lights and turn signals – but also all forward and rear marker lights. These are easily checked by simply turning on all lights including Hazard Flashers and then walking around the truck and looking. While a technically proper check would best involve two people – one in the cab and one outside, it is sufficiently possible for a single driver to do this. And while we are on the subject, you even notice the guys with dozens and dozens of lights on their trucks to light them up like a Christmas Tree? The regulations, as stated, are that all lights must be operational at all times – not just the factor lights. Therefore, before you decorate your truck, realize that if there is a problem and one or more of these extra lights are burnt out that you can be ticketed for the offense.

Air Lines and Light Connectors: It is not enough to think these are properly attached and in good shape. You really must take the time to reach out and touch them. Check that they have not vibrated loose and are not suffering from and damages. Both the tractor’s and the trailer’s glad hands should be inspected. Insure the electrical/light connector is properly seated in place.

Under the Hood. Yes, you should check the fluid levels, but also take a few minutes with a flashlight to check belts and hoses. Assuming the engine is off, check belts for proper tension and look for any cracking or other defects. Hoses should not be leaking or have signs of bulges or infiltrations. Even in daylight a flashlight will help you spot things that may be in the shade of the cab, hood or other engine components. Look under the engine area for signs of leaks.

General Structure. While under the hood and as you walk around the entire unit, repeatedly check the frame and other major structural components for any damages. This will require stooping and twisting – but there is only one way to know.

Fifth Wheel Lock: Each and every time you hook to a new trailer and at least once a day, you should make a habit of checking the lock release to insure it is still locked and go under the trailer to visually check that the king pen lock is in place. The “pull test” is nice, but double checking is professional.

Maybe you pull the same trailer every day or drop and hook a numerous times per day – it is your duty as a professional truck driver to always inspect each trailer you are hooked to before you take it on to the highways and byways. Safety inspections will in the long run improve the possibility that you will be able to deliver your load on time and return to your family at home.

 

Drivers Daily Paperwork

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Drivers Daily Paperwork

Trucking today is as much about paperwork as it is about shifting gears. In the olden days, every driver carried a log book to record their daily break down of hours: off duty, sleeper berth, driving and on duty not driving. [Okay, some drivers carried two or three log books, but that is discussed elsewhere.]

There are three primary documents a driver will maintain: Their Hours of Service log book, their Daily Mileage or Trip Log and their records of safety inspections.

Hours of Service (HOS) Log Book. Those same designed log books are still being used after 60 or 70 years with minimal changes in the format. There have been changes to the running total of hours calculations and most importantly to how the hours have to be logged. But the premise of the 4 rows to show the four classifications of activities has remained unchanged.

However, the growing government involvement in trucking as well as other management factors, has generated other levels of paperwork.

Daily Safety Equipment Inspections. One of the daily requirements now is a daily (safety) truck inspection form. Forty years ago, before taking starting his day, a driver would check that all the tires were inflated (normally the kick or thump test – which is completely insufficient), a walk around checking lights and a quick peak under the hood. Now the Federal Motor Carrier Safety Administration (FMCSA) requires not only a detailed inspection of the truck/trailer, but that it must be logged and copies maintained in the company’s safety or maintenance departments. These inspections require checking not only the tires & lights, but verifying the conditions of wheels, tire treads, airline and electrical connections, working windshield wipers, proper functions of warning lights and indicators, hoses & belts and many more equipment issues. While the original inspections were utilized by the companies to track maintenance issues, the FMCSA now views the inspections as a papertail to the unit being properly maintained and the driver assuring that the equipment is not being out with the motoring public with known mechanical and safety issues.

Daily Mileage or Trip Logs. Among the biggest changes in truck driver’s paperwork since paperwork began are the daily trip logs. Every state has always funded highway construction and maintenance with fuel taxes collected at the pump on gasoline and diesel fuel. The theory was that the roads would be funded by the vehicles driving over them as they drive they have to buy fuel which puts the money back into the state’s highway fund. This worked for cars/trucks/buses that operated exclusively with in one state. However, when trucks operate in multi-state operations, they might buy fuel in one state but drive thru several others. The state where the fuel was purchases collected the fuel taxes, but the truck used the highways in other states. As different states passed different tax rates, it could cause the fuel in adjacent states to very substantially which would result in truckers filling up in the cheaper states.

The solution: The International Fuel Tax Association or IFTA. Discussed in detail elsewhere, the IFTA is a member organization that allows for the equalization, of redistribution of the fuel taxes to the states where the mileage was driven regardless of where the fuel was purchased. Naturally, in order to achieve this solution of having taxes paid in each state accordingly, you guessed it – paperwork in the form of daily trip or mileage log. Some larger companies with satellite tracking systems hay have this automated and many companies developed their own forms – so exact information on completing the paperwork will be provided by the companies safety or compliance department.

However, in over view, it is necessary for the driver of the truck to record the truck’s mileage each time they cross a state or enter /exit a toll road. The company then on a quarterly basis will calculate the total miles driven in each state (or Canadian Territory) and then submit the information. It may be necessary for the company to pay additional fuel taxes if, for example, the majority of the fuel was purchased in a lower tax rate state but a lot of miles where driven in higher tax rate states. It is even possible for a refund if the reverse was common. In an ideal world, it will balance out and little to no additional taxes will apply. The IFTA is discussed in more detail in another posting.

Seventy years ago, the job of a truck driver was much harder because of the equipment that was available then as compared to today’s comfort cabs. However, with the invention of paperwork – the job of a truck driver is now much more complex with Hours of Service log books, daily safety inspections and daily mileage or trip reports.

 

Why use a lease for a commercial truck?

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Pros and Cons of a lease for a Commercial Truck

Ok, you have been driving a commercial truck for a couple of years and you like being a professional truck driver. But maybe you want a little more authority on operating the truck. Maybe you are tired of sharing the truck with other drivers in a slip-seat arrangement. Maybe you just want to drive newer equipment then the company is assigning you. Maybe it is a pride of ownership issue or you think that you can make more money then just being a driver.

Being an Owner/Operator is not for everyone but for many it is the way to go. Regardless of your reasons, you now have to decide: Lease or Purchase (with a loan).

With a lease – as compared to a loan to purchase, you generally have a lower (or even no) down payment, your payments will be lower; the leasing company normally assumes a portion of the maintenance and repairs (unless caused by your actions or in actions); you have greater flexibility to upgrade to newer, nicer, different equipment; and at the end of the lease, you can walk away with no additional requirements.

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However, with a lease, the equipment is still owned by the leasing company and you are accountable to them for insuring that the truck is maintained (both preventative and demand); you can not make modifications or changes and you might have a limit on where you can take the truck (only certain states, no Canada, etc.). Many leases include the option to purchase the equipment at the end of the lease period – typically 3 to 5 years, but could be any time frame – however, the total cost of the purchase of unit may be total greater then if you just obtained a loan.

Advantage of a lease for a commercial truck

One hidden advantage of leasing is that you get to drive the unit before you are stuck with it. Sort of like renting cars to get a feel for how much you like a specific model before going to a dealer to purchase one.

You may be required to obtain and pay for special insurance under your lease agreement. The company that you are going to haul freight for might provide insurance, however your lease might require that the insurance on the unit is in your name. This could cost you extra money. It is important to carefully review all fine print to understand your obligations.

Another issue is that when you purchase the truck, you are making an investment in equipment and that equipment is now an asset. When you lease, the lease is an obligation, which is could be a negative affect on your overall financial balance sheet.

Like all decisions you will have to make in your truck driving career, you have to carefully balance the pluses and minuses of each situation. There are long term and short term advantages and disadvantages to leasing and to purchase loans. Don’t let the complexities of leases or purchases keep you out of the game. There are as many advantages as disadvantages to being an owner/operator.

Many dealers have the the option for you to finance your tractor and trailer right on location. This may allow you to pick out your truck and drive it home the that day. However, you do not have to get financing from the dealer, in fact you may not want to do it as you may end up paying a higher price in the long run. The dealer’s leasing company may give you the best deal they have – but it may not be the best deal for you. If you already have an established banking relationship with a local bank or credit union, discuss your plans with a loan officer and see what they can offer you. Your relationship with them might get you a much better deal in the long run.

Shop carefully when you shop for a lease for a commercial truck.

Electronic On Board Recording – EOBR

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Electronic On Board Recording devices are used by some trucking companies to track Hours of Service (HOS) compliance by drivers. These devices have been around for many years in different forms. The Federal Motor Carrier Safety Administration (FMCSA, a division of the Department of Transportation), has previously tried to require all trucking companies to install the equipment in all trucks used in interstate commerce. At this time, the FMCSA is restricted to requiring the equipment only when the carrier (or sometimes the driver) is repeatedly found in violation of the HOS rules. However, there will always be career bureaucrats in the government that will try to impose their big brother will on the public.

The theory and the justification of the use of EOBR systems is to insure that the driver(s) are getting the required (by law and common sense) rest necessary to safely operate trucks. HOS laws require 30 minute breaks at least every 8 hours, limit the number of hours of driving without breaks, limit the number of work hours total before a rest break of 8 or more hours, and the maximum number of hours/work during a typical week without substantial time off duty.

Cheating an Electronic On Board Recording system

Although the Electronic On Board Recording can track the truck if it is moving or stopped, most systems can not (automatically) detect the difference between if the driver is on lunch break in a restaurant or is sitting in the office doing paperwork. A driver that is a chronic abuser of HOS regulations will still be able to tweak their activities – but it will be far more restricted then just using a paper log book. Since the system will record when the truck is moving, it will be impossible for the driver to record time not driving when in fact they are. However, the driver could still manipulate some activities such as recording sleeper berth when they are in fact doing other chores such as truck maintenance. An example of HOS cheating with EORB is, although the HOS rules require that a driver may only start a new day of driving (driving up to 11 hours in the first 14 hours of going on-duty) after 10 consecutive hours of off-duty time (no work). But if the driver parks the truck and manually puts the EOBR in a duty status of “off-duty” for 10 hours, while the driver actually performs work and is, in fact, “on-duty” for part or all of those 10 hours. The EOBR would report the driver is permitted by the rules to start a new period of 11 hours of driving, when in fact, the driver would be in violation of the HOS rules the moment the driver begins driving the truck. The value of the EORB depends 100% on who you talk to.

 

Anti-truck groups and proponents of big brother control advocate a system that tracks driver activity to the point that it (the system) knows if the driver is even in the cab, sitting in the driver’s seat, in the bunk, etc. Some trucking companies likely would like this level of control also as they want to milk every possible of driving minute from their employees. Many truck drivers (and their company’s owners) would like to eliminate all use of EOBR system as it is an intrusion into their freedom. Some people became truck drivers to get away from the BOS (boss over shoulder) syndrome. However, EOBR have greatly increased HOS compliance, especially by habitual offenders such as drivers that carried multiple log books in an attempt to completely bypass the safety goals of HOS rest requirements.

Electronic On Board Recording devices are here to stay for the trucking industry. Rather then just complaining about them as a problem, truck drivers and trucking companies need to learn to get maximum value from the systems. EOBR systems can greatly increase driver utilization by allowing the drivers to actually get their maximum number of hours being productive. In cases where drivers are also repeatedly detained at docks waiting to load or unload, this information can be documented and the shipper billed for the delays, or at least pick up delivery schedules can be adjusted to reduce wasted time and resources.

At this time, there are no GPS or smart phone apps that qualify as an Electronic On Board Recording system, although some EOBRs contain GPS like features.