Article

Getting By With a Little Help From your Friends

March 2013, TruckingInfo.com - WebXclusive

by Jim Park, Equipment Editor - Also by this author

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Large carriers have one big advantage over owner-operators where it really counts: vice presidents. Big carriers have vice presidents of everything from maintenance to finance, human resources, training, legal and even procuring office supplies it seems. All those folks with the big titles and the big paychecks earn them for knowing what to do and how to do it.

Then there's Billy-Bob the owner-operator, whose wife handles the administrative chores like filing fuel tax, collecting accounts from dead-beat brokers, and booking new loads. Occasionally there's time to visit the stationery store across town to grab another cartridge for the printer. 

And who does Billy-Bob call when the engine starts making an odd noise, or when the 'check engine' light comes on?

It's obvious that single truck owner-operators can get into a pile of trouble quickly if that don't have the resources to overcome all the day-to-day challenges. In trucking today, that list is getting longer and longer.

The same goes for a new or prospective owner-operator. Making the leap from company driver to owner-operator, or from a leased-operator to an independent is a big bill to swallow.

But help is available if you look for it.

Companies and associations such as ATBS, the Owner Operator Independent Drivers Association, the National Association of Small Trucking Companies, and others can provide all the back-office help you need to stay profitable.

But one source that's often overlooked is a carrier partner.

When perusing the recruiting ads, how often do you look for a business partner that offers assistance in administrative, technical or regulatory affairs? While it's true that some carriers will keep their distance in that regard out of concern for establishing too close a relationship with its contractor, some have third-party relationships with service providers.

Take Prime, Inc. for example. The president and founder of Prime Inc., Robert Low, recognizes that there's a lot of entrepreneurial out there still, and his company can help foster and promote that spirit.

"We want our drivers to be as capable and as qualified and as knowledgeable and smart as they can be," says Low, who is one of HDT's 2013 Truck Fleet Innovators. "They don’t have the time or resources the company has to research the most fuel efficient equipment and driving techniques and other business practices, so we have programs that help them with that. We think that's an important part of our offering is to provide those business management learning opportunities to the drivers."

Low told Heavy Duty Trucking that he expects to see more such innovative and creative business models that can draw on the strengths of a strong carrier.

"The idea is to capture the superb productivity, efficiency and safety of the individual owner-operator and combine that with the carrier's strengths," says Low. What emerges is a better, even more powerful business model.

Schneider National recently announced a program with ATBS where each new owner-op that leases on with its Van Truckload division in 2013 gets six free months of business consulting services from ATBS. That's six months free over and above the rate they pay. It may not amount to a fortune at face value, but without sound guidance few owner-ops survive their first year in business.

The Right Partner

There are dozens of reasons why an owner-op would choose one carrier over another -- pay, home time and routeing being close to the top of most lists. But how often do you look down the list of perks to discounts and services offered by the carrier? While its true than some sound like a pot of gold but don't always turn out that way, there are savings to be had of the discounts are meaningful to you. 

If you already get a good deal on tires and your brother-in-law is a mechanic, then shop time might not matter. Buy how about fuel or business services, a health and fitness program or help with personal and business finances?

"A lot of owner-operators lost their trucks during the recession," notes Trent Dye, director of Paramount Freight Systems, in Jeffersonville, Ohio, a winner two years running in the Best Fleets to Drive For promotion and another of this year's HDT Truck Fleet Innovators. "A lot of it was self-induced by the individuals -- some folks just aren't good businesspeople, but we try to foster owner operators to become good business-minded folks."

Paramount has also partnered with some third-party companies to offer some business classes and financial management classes.

"I see some checks to owner-operators that are pretty large, but they still live paycheck to paycheck," he points out.

That doesn't sound like they are hurting for revenue, but the month just lasts longer than the money. There's a cure for that; it's called financial management.

It's a skill you can pay someone to teach you, or you can hook up with a business partner that has a stake in your success.

The next time you're going through the recruiting ads looking for a new place to work, go beyond the obvious and ask about services that can help you do better at your business.

Just keeping the wheels turning is a full-time job. Who couldn't use a little help every now and then? 

Comments

  1. 1. Jim Barrow [ March 13, 2013 @ 07:16AM ]

    With the exception of Owner-Operators who can afford new equipment with warranties the majority of O/O's have older equipment. That's not to say there are problems with older equipment but the biggest failure I see are those owners who don't reinvest in their equipment. They run it until they have a breakdown and then they have big problems, usually very expensive problems. I became an O/O in 2005 because my strong point is truck maintenance and repair. I know every square inch of my truck. During my downtime, I go through my equipment and look for future failures before they happen. Yes I make decent settlements every week but my equipment comes first before I see a dime. I live check to check but I also know when I insert the key in the ignition, it will do what it was built for. Reinvestment in older equipment and proper maintenance is like money in the bank.

  2. 2. Clifford Downing [ March 13, 2013 @ 11:16AM ]

    Jim Barrow has a point. But I would add that the type of equipment can also play in here. For example, if one is not going to California, then why invest in new equipment laden with emissions controls? Why not invest in new equipment with factory rebuilt pre-emission engines. They have the ability to outlast current engines and have a greatly reduced operating cost over their life cycle.
    But to Jim Parks story, there does need to be basic business training for many folks becoming truck owners. Most do not have a clue what their operating cost per mile is, or what their breakeven point is, etc. Without knowing basic business fundamentals, it is an accident waiting to happen that the owner is going to go under.

 

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