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 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.
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.
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.
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.
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.
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.
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.