The job market right now is on fire. Truck driving jobs are everywhere. Large carriers continue to offer incentives and bonuses to recruit as many drivers as they can get their hands on. But working for an existing company is not the only option out there for CDL holders. You may have heard the term “Owner/Operator” but what does that mean, and is it something you want to consider?
Obviously, the first thing you need to do is get your CDL. At that point, you are fully legal and ready to roll. Not all carriers hire new drivers. Some do, but it can often take years to start earning veteran driver wages. Becoming and owner/operator means you determine your own fate, financially, from day one.
Once you have your CDL, you would obviously need a truck of your own. That can be costly, but you won’t be spending years preparing for a well-paid career. Instead, you will learn on the road and start earning more immediately.
While the pay varies depending if you work for a large shipper or a smaller one, the average starting owner/ operator salary in the United States currently is $112,933 to $143,727 according to Salary.com
Obviously this is a huge incentive, but not everyone is cut out for being their own boss.
Job stability is a big thing for most people. Signing on with a major carrier is arguably the most stable course of action. However, most owner-operators claim they don’t have trouble finding loads if they want them. It seems clear you’ll always have work if you want it in the trucking industry.
The driver shortage has forced many established carriers to branch out more and hire owner-operators to meet their needs. In some cases, they prefer it, since allows them to move freight without the overhead costs associated with a full-time employee.
As the owner of your truck, and your business, you can negotiate and choose the loads you want, and avoid the ones you don’t. You also have the flexibility of determining your own work schedule, vacation time, etc. You are truly your own boss. Your success or failure falls completely on you. Some find that empowering and thrive like that. Others find it too much stress and prefer to earn a steady paycheck while someone else worries about the details beyond driving the truck. Only you can make that decision.
Currently in the US, about 1 in 9 truck drivers are owner/operators. This might be something you strive for, but aren’t prepared (financially or otherwise) to start as. Many drivers start out working for carriers, and as they gain experience, they save and plan for their move to entrepreneurship.
The good news is, either way – truck driver jobs are in high demand, and make good money. If you are considering a move into owning your own truck, you can earn a good living and learn a lot in the meantime.
What are the initial costs and investments required to become an truck owner/operator?
- Truck Purchase: The most significant investment for an aspiring owner/operator is the truck itself. New trucks can cost anywhere from $80,000 to over $150,000, depending on the features and model. Used trucks offer a lower entry point, typically between $40,000 and $100,000.
- Insurance: Insurance costs for owner/operators can be substantial, including liability, cargo, and possibly physical damage insurance. Annually, these can range from $6,000 to $12,000, depending on the coverage levels and the driver’s history.
- Operating Licenses and Permits: Besides the CDL, owner/operators may need additional permits and licenses, such as a USDOT number, MC (Motor Carrier) number, and specific state permits. The costs can vary widely, with some permits being a few hundred dollars.
- Maintenance and Repairs: Setting aside funds for maintenance and unexpected repairs is crucial. While these costs can vary, budgeting 1-2% of the truck’s value annually is a conservative start.
- Fuel: As one of the largest ongoing expenses, fuel costs depend on the distances traveled and fuel efficiency. A budget for fuel expenses is critical for financial planning.
How do truck owner/operators find loads to transport?
- Freight Brokers and Load Boards: Many owner/operators use freight brokers and online load boards to find loads. These platforms can connect drivers with shippers and logistics companies looking to transport goods, often for a fee or a percentage of the load’s pay.
- Direct Contracts with Shippers: Some owner/operators establish direct relationships with shippers, which can lead to more consistent work and potentially higher pay, though this often requires more experience and networking.
- Carrier Programs: Some large carriers offer programs for owner/operators, where the carrier essentially outsources loads to them. This can be a way to ensure steady work, though it may come with specific requirements and lower margins.
What are the primary challenges faced by new owner/operators?
- Financial Management: Managing cash flow, especially in the early months, can be challenging. Unexpected expenses, such as repairs or fluctuating fuel costs, can impact profitability.
- Market Fluctuations: Freight rates can vary widely based on supply and demand. Learning to navigate these fluctuations and plan for lean periods is crucial.
- Compliance and Paperwork: Keeping up with the necessary permits, taxes, and regulations for owner/operators can be daunting and requires diligent record-keeping and sometimes professional assistance.
- Work-Life Balance: As their own boss, owner/operators need to manage their schedules to balance work and personal life, which can be challenging given the demands of the job and the temptation to take on more work to increase earnings.
Disclaimer: The information in this article is based on the data available as of its writing and is meant to inform and guide prospective CDL trainees. For the most current information and specifics about CDL training programs, please contact SAGE Truck Driving Schools directly.
