For an outsider, anyone in the transportation industry is a truck driver. But like all other lines of commerce, the trucking business is much more than only truck drivers. Based on the kind and size of the business, a truck driver can also be the owner, employee, or owner-operator. Most truck drivers strive to be the latter, as it gives them autonomy over their work hours and productivity. The freedom to choose how and when they work, agents or people they work with, and financial control are some of the motivating factors behind this preference.
In the trucking industry, an owner-operator is a class of truck drivers that own their vehicles and drive them, along with other employees.
What Is An Owner-Operator
In simple words, owner-operators are freight transportation drivers who work independently. They use their trucks and vehicles to carry out deliveries for companies. These drivers are essentially their bosses and are responsible for their actions.
In most cases, owner-operators are former company drivers who establish themselves as a small business after gaining experience, knowledge, and practice. As they use their vehicle and equipment, they can also lease their services to companies. Some large fleets also form partnerships with owner-operators. As a result, these owner-operators become free agents with the support of a large fleet. It is a very profitable line of business. The fleet facilitates requests for load and insurance for the trucks. The driver makes a lot more money and takes a large chunk of the gross pay per load. This way, they get the best of both sides of being a truck driver.
As self-employed individuals, owner-operators act as the employee and the employer. They carry out their duties as drivers, manage their business, and take care of the profits. They have to do everything on their own.
What Do Owner-Operators Do?
Owner-operators are responsible for delivering the cargo by themselves, planning travel routes, planning emergency backup plans, taking care of the loading and unloading process, and managing the finances of their business. They do everything on their own.
Some of their regular tasks also include:
- Vehicle maintenance and repair work
- Tax records and tax filing
- Adhering to all laws and contracts
- Personally ensuring compliance
- Securing licenses and insurance
- Coordinating deliveries and loads
- Maintaining ELD compliance
How Can You Become An Owner-Operator?
The first thing you need to be a successful owner-operator is- experience. You should have experience in the field. Your driving abilities should be good, and you should be familiar with the shipment, loading, and unloading process. At the same time, administrative and managerial capabilities are a must.
Having experience in the industry is the key to running a successful and profit-making business. Of course, managing a whole business by yourself can be difficult. As we have discussed above, the duties of an owner-operator greatly exceed the ones of a commercial driver. But, this is also precisely why having experience is very important. With experience, managing all these tasks by yourself will become easier. You will also feel more confident about your work. You will also hone your skill set for your business.
Apart from your skill set and experience, there are some legal connotations that you need to adhere to.
You need to obtain the following licenses and documents.
- A commercial driving license (CDL): A commercial driving license is a must for this job. Without one, you cannot operate heavy or hazardous vehicles and cargo or work as a commercial driver.
- Insurance: Having reliable insurance ensures that your assets will be safe after an accident or a mishap. The FMCSA also requires all truck owners to receive vehicle insurance.
- USDOT number: The FMCSA also gives every company a unique identifier. It allows the FMCSA to collect and monitor the company’s private information.
- Motor Carrier Number: Every vehicle gets an MC number to haul and regulate commodities.
How Are Owner-Operators Different From Company Truck Drivers?
As we have covered, owner-operators have more responsibility than truck drivers do. Of course, both jobs have their own set of pros and cons.
If you are an aspiring truck driver or wondering how you can increase your income, then read this article in which we discussed the highest paying trucking jobs in 2022
What does the job of a company truck driver entail?
- They drive the trucks provided by their company. They do not own trucks of their own.
- They carry out deliveries of loads assigned by dispatch. However, they are not involved in the manual organization of the same.
- Company truck drivers do not need to pay for fuel and maintenance costs out of their pocket. The company covers it.
- The truck insurance is also paid for and initiated by the company.
- The drivers receive payment by the mile.
- They might receive additional payment relating to performance, loading and unloading, and detention.
- In essence, the only job of company truck drivers is carrying out deliveries and loading/unloading the cargo.
- They are not involved in managerial duties.
- No prior experience in the field is necessary. They only need driving and loading/unloading capabilities.
On the other hand, owner-operators have a slightly different way of working.
- Owner-operators, as the name suggests, operate their own small business and are their boss.
- They own the trucks they use. They are either used trucks, leased trucks, or newly bought ones.
- They are responsible for their entire business.
- They are responsible for finding loads, creating deals, managing their finances, employing staff, etc.
- Owner-operators are responsible for paying their fuel and maintenance costs out of their pocket.
- They make their own earning decisions.
- They also have the choice of signing contracts with companies if they would like.
- Owner-operators can set their payment terms. They can be paid either by the mile, like company drivers, or have a fixed pre-decided price for every load.
- They have the freedom to select their freight. Owner-operators can also buy from the spot market (if they have their own DOT operating authority to support that) or lease from an established company.
- Before drivers, they are also business owners and therefore bear a greater responsibility.
- They have maximum flexibility and can operate as per their terms and conditions.
- They require tons of experience in the field to survive their business successfully.
We have covered all you need to know about an owner-operator, what the job entails and how it is unique to company drivers. Statistics prove that owner-operators make more money than company truck drivers. At the same time, your working expenses will also be more than a traditional driver. Of course, that comes at the cost of a lot of responsibility. If you are considering starting your business as an owner-operator, ensure that you are ready to put in extra hours of effort and work at the beginning. Establishing the name and reputation of your company is the most important thing for you to do. It is a priority. You also need to ensure that working capital is enough to cover all your costs lest you sink into substantial debt. If you want to keep it safe and opt for a consistent income, being a company truck driver is a better-suited job for you.