In light of some recent conversations I have been privy to, I would like to discuss a topic that I have thought long and hard about many times throughout my career as a truck driver.  I started in this industry as many a “newbie” does; go through truck driving school, put my time in with a major OTR carrier, then venture out to see what else there was out there to better my situation.  Somewhere along the way, more than a few times, the thought of owning my own truck started to appeal to me.  But what would I do with this truck once I bought it?  Would I lease it onto a carrier or run under my own authority?
For those who know me, research is one of my trademark skills and something I do in-depth before I make any decisions on anything.  This issue was no different, so I dove right into all the information I could find as I scoured the internet forums, articles, and chat rooms.  I took all of the information and did with it something else I seem to do rather well…crunch numbers!  Through what seemed like an endless array of spreadsheets and calculations, I come to a realization.  Of all the information sets I gathered, I was able to come down to one common conclusion; money could be made either way if I worked hard enough at it!
I get it, the appeal of running under your own authority means not having to answer to anyone and no boss looking over your shoulder.  It means you are free as the wind to go where you want while hauling whatever you want.  Maybe it appeals to some as a way to fight “The Man”.  All too often, the consequences do not thoroughly get considered and weighed against the other options.  Sure, as an independent you usually make a great deal more per mile or per load and have a better ability to communicate with direct freight customers that can later help you expand.  What about some of the extra overhead, headache, and vulnerability that having your own authority carriers with it?  During rough times, might you lose a dedicated account due to being undercut on your rates by a more competitive hauler?  Have you also considered the additional costs involved such as cargo liability, freight claims, or truck/trailer registration and permits?
When making a decision to lease my truck onto a carrier, a lot of hard thought like this went into it.  Of course I see the appeal of fighting the “risk vs. reward” head-on with my own authority, but would it have been truly worth it in my case?  There are many costs involved in operating a truck that are either paid for by my carrier or are deeply discounted to me in their final price.  These things can add up to a lot all together.  The facts that I do not pay for my apportioned plates, permits, or cargo insurance add up to thousands annually by themselves.  Add these things together with the facts that my physical damage is nearly half of that paid by some of my independent friends, my fuel is usually $0.40 - $0.50 lower than the pump price per gallon, my parts and shop labor are discounted, trailer maintenance is on them, and that they have an ample freight base to keep my hungry appetite fulfilled.  You may now begin to scratch the surface as to why I decided to lease onto a reputable carrier.
None of this is intended to sway anyone from one side to the other in their decision making process when proposed with this dilemma, since there is no one-size fits all approach to this choice.  I hope only to help inform and educate my fellow truckers out there that still are uneducated in what a successful business consists of.  The fact that I am leased to a carrier and make a good living, take time off whenever I want to, and enjoy what I do defines my efforts as success over the years.  It doesn’t matter if you are a “big strapper” under your own authority or are leased to a carrier as an owner-operator.  If you can keep the bankbook consistently in “the black” and still have enough money to live a good life on, you are a success in my book!

Comments (5)

Jimmy Nevarez

Jimmy Nevarez is the Owner/President of Angus Transportation, Inc., based in Chino, California.  Jimmy pulls a 53' dry van hauling general dry freight for his own small fleet, operating on its own authority throughout all of Southern California and Southern Nevada.

Read These Next...

CAREER Smart Resources

First Things First

February 26, 2015


Great article Jimmy. You provide very good insight from the leased owner operator perspective and I can see that it makes sense for you and contributes to your great success. You are correct that one size doesn't fit everyone. Fortunately our industry has many successful leased owner operators and successful owner operators running under their own authority, it keeps it dynamic and interesting. In my niche being a leased owner operator isn't an option even if I would prefer it as the federal government won't take on the extra risk. They hire a contractor, pay a price and are done, so having my own authority is the only way I can work in the wildland firefighting industry.

December 04, 2013 8:24:21 AM

Great article! I've had my own authority since 2010 and love it. The freedom is unparalleled! The risk and nervousness is also unparalleled. One thing many people don't understand; I don't look at myself as an owner-operator, I'm a trucking company, just like the big boys. I can do anything they do, I am just smaller! And if I ever get tired of the extra work to have own authority, I can always give it up and lease on to a carrier.

December 04, 2013 7:42:45 AM

I have driven for two private carriers prior to getting my own authority in 1996. I spent two years putting my business plan together and it was worth every minute of my time. 80% of new business ventures fail in the first 6 months and 80% of those who fail spent less than 6 months planning. The biggest problem I see in regards to having your own authority is the lack of planning prior to starting your own business.

December 04, 2013 7:32:26 AM

Interesting insight Jimmy. All of us hear about having our own authority and in the right situation it is perfect and for others it is not appealing. Research is the key and you found what works for you!

December 04, 2013 5:44:07 AM

I am a believer in break even analysis. You find that water seems to seek its own level. So-I believe that all else being equal -do what you enjoy - because it is probably what you are good at.

December 04, 2013 5:39:48 AM