While many industries are currently facing a downturn, that’s not the case in trucking. After all, trucks transportmore than 70% of all goodsin the U.S. Perhaps, that (among other reasons) is why more and more drivers are becomingowner-operators.
Right now, approximately10-15% oftruckersareowner-operators, but that number is expected to grow significantly in the next few years. With that in mind, if you’re interested in learning how to become anowner-operator—you’re in the right place.
We’ll explore and discuss everything you need to know about owning and operating a semi truck.
What is anOwner-Operator?
Simply put, anowner-operatoris atruck driverwho’sself-employedand operates their owntrucking business. The biggest difference between these drivers and those who work for larger companies is they actually own the truck(s) they drive.
That said, becoming anowner-operatoris no walk in the park. It’ll take time, persistence, and capital to cover expenses. Here’s what you need to know.
Owner-OperatorResponsibilities
If you’re anowner-operator, you’re abusiness owner. That means you’ll have to handle a huge swath of responsibilities like sales, invoicing, taxes, insurance, training, truck upkeep, and more.
Owner-Operatorvs. OwnTrucking Authority
While the difference between the two is a common question, these are not comparable terms. Having yourown authoritymeans theFederal Motor Carrier Safety Administration(FMCSA) has issued you aMotor Carrier(MC) number and aUSDOT number. With those, you are allowed to operate independently as your owntrucking company. Receiving yourown authorityis a step to becoming anowner-operator, meaning allowner-operatorshave theirown authority.
Owner-Operatorvs. Independent Contractor
The main differences betweenowner-operatorsand independent contractors are truck ownership and operating authority.Owner-operatorsown theirown trucksand have theirown authority, meaning they can legally deliver freight throughout the U.S. without a contract through a carrier. Independent contractors typically lease their lease truck from a carrier and can only operate a truck under the authority provided by the carrier they are contracted with.
Owner-Operatorvs. Carrier
A freight carrier (i.e., shipping company) is usually a larger company that has many drivers working for them. In rare cases, carriers also lease trucks to independent contractors. Further, in many cases, shipping companies are open to partnering withowner-operators.
Pros and Cons of Being anOwner-Operator Truck Driver
Just like any other profession, being anowner-operatorcomes with its own set of advantages and disadvantages.
Pros:
- Freedom of being your own boss
- Higher earning potential
- Opportunity to build a business
However, you should also be aware of the potential challenges to owning and operating yourown truck.
Cons:
- More financial volatility
- High costs (both start-up and overhead)
- Increased responsibilities
Steps to Becoming anOwner-Operator
One thing is for sure—becoming anowner-operatorisn’t an overnight process. It can take years. However, once you reach your goal, it will have been well worth the effort. Listed below are some of the most common steps you’ll have to take in order to become asuccessful owner-operatorin thetrucking industry. They include:
- Get yourCommercial Driver’s License(CDL)
- Get as much experience as you can while driving for another company
- Create your vision and business plan
- Decide on yourbusiness structurethen incorporate
- Obtain the necessary state/nationalpermits and licenses
- Sign up forcommercial truck insurance
- Purchase your own truck
- Start making sales calls and building connections
- Keep yourself updated about the latest industry trends
Everyone’s situation is slightly different, so your path to becoming anowner-operatorcould be easier or more challenging than others. The most important thing is to stick to it (fromCDL trainingtosole proprietorship), and don’t stop until you reach the finish line.
How Much DoOwner-OperatorsMake After Expenses?
According toZippia, most owner-operators earn between $100,000 and $220,000 per year. However, that does not take into account the operating expenses (fuel, maintenance, insurance, etc.). After expenses, an owner-operator’s annual net income is typically between $45,000 and $80,000.
Owner-OperatorLaws & Requirements
Once you become anowner-operatoryou’ll no longer have a compliance department to rely on—you’ll have to do it yourself. That said, as an owner you’ll have to comply with all state and federal laws. For example, you’ll need to get your USDOT andMC number. Further, you must meet allU.S. Department of Transportation(DOT) requirements forowner-operators. That’s in addition toCDL trainingandendorsem*ntrequirements.
Some of the most important laws fortruckersinclude:
- Part 395 of the Federal Code of Regulation:Keep track of the number of hours driven and stay under the maximum allowable hours (i.e., 11 hours driving limit per day, no more than 70 hours of driving within an eight-day period, etc.)
- IFTARequirements:Allowner-operatorsmust file an International Fuel Tax Agreement (IFTA) and International Registration Plan (IRP), when necessary.
- Daily Driver Vehicle Inspection Report (DVIR):Section 392.7 of the Federal Code of Regulation states that drivers must inspect certain areas of their trucks before and after every working day.
Further,owner-operatorsandtrucking companiesmust meet requirements from the FHWA,FMCSA, and FAA (when applicable), as well as meet all EPA standards.
FAQs About Becoming anOwner-Operator
How does anowner-operatorfind loads?
There are multiple ways to find loads to haul as part of your new business as an owner-operator. You can usefreight brokers, create relationships withcommercial truckcompanies, useload boards, etc.
How does fuel surcharge work forowner-operators?
A fuel surcharge is basically an additional fee added to your “freight rate” that can help to offset fuel costs. In most cases,owner-operatorswith theirown businessnegotiate this rate. However, the price can fluctuate depending on the cost of fuel, sonew owner-operatorsshould keep this in mind.
Doowner-operatorsget random drug tests?
Absolutely.Owner-operatorsare subject to random drug tests, which are a part of the drug and alcohol safety program that’s run by theFederal Motor Carrier Safety Administration. Further, you’re required to join a drug and alcohol consortium that can manage the random testing process.
How doowner-operatorsget paid?
Unlike acompany driver,independent owner-operatorstypically work on a per-load basis. They can negotiate their rate by the mile or by the trip—both options have pros and cons that should be considered.
Learn More About Solutions from Drivewyze
Becoming an owner-operator can be a tedious process, but Drivewyze is here to provide you with resources to get started and solutions for efficiency once you get on the road. Our solutions likePreClear,Safety+, ande-Inspectionhelp your business run more smoothly and keep you safe. Learn more about Drivewyze solutions forowner-operators today.
