Running under your own authority might mean you have a higher income, but it also means you have more liability, more expenses, and more paperwork.
Just because you run under a trucking company’s authority doesn’t mean you lose all ability to choose when and where you run. It also doesn’t mean you give up the opportunity to make good money.
Here’s the honest truth about running under your own authority as an owner operator truck driver.
What Is Running Under Your Own Authority?
There are basically three ways to look at authorities:
- You are entirely on your own – you truly run under your own authority. You’re responsible for everything, including billing, booking your own freight, paperwork, insurance, etc.
- You run under your own authority beneath another trucking company. They take a smaller percentage of your load to cover billing and minimal support, but everything else is on you. You book your own loads.
- You run under a trucking company’s authority, and they handle all the back-office tasks, including booking your loads.
If you’re considering being entirely on your own, we’re going to outline in this article what that actually means for you – is it really a good idea?
And if you’re considering running under your own authority beneath another trucking company, we’ll hit on that as well.
Freight X does not allow owner operators to run under their own authority beneath our company. All of our drivers run under our authority, which means they benefit from all of our back-office support, and we also book their loads.
Here’s why: if you got in a bad accident, we’d get pulled into the lawsuits anyway. They’d hit your line of coverage first, but they’d also come after us. That’s an incredible liability to us, so we avoid that by ensuring all of our drivers run under our authority.
Before you click off this article, it’s important to understand all of our drivers still choose when and where they run. That’s critical to understand! We’ll explain more later in this article, but we wanted to hit on the basics first.
Do You Really Make More Money?
If you want to run under your own authority, you basically want to be a trucking company. Sure, you’ll make 100% of your loads (minus a factoring fee or QuickPay fee, discussed later), but that doesn’t actually mean you’ll be making more money.
You’ll be a one-person show, which means you’re responsible for your own billing – you have to make sure you get paid for your loads.
You’ll need a factoring agreement, and the factoring company will most likely have you put down a bond. They’ll also want to hold cash reserves for you. In addition, factoring companies take up to 5%, and they won’t release funds to you until you have reached your reserve requirements.
Without a factoring agreement, you’d wait an average of 45 days to get paid.
So again, you will technically make more money, but a lot of drivers don’t realize what goes into the accounting side of things. When you run under a trucking company’s authority (such as Freight X), you’re paid every week – even when Freight X isn’t paid yet by the customer!
You don’t pay any percentage of your load to the factoring company, and you have great cash flow because you get settled every week.
Hidden Driver Expenses
The billing piece of running under your own authority is huge, but there are a lot of other hidden expenses drivers may not think about.
- Fuel discount
- Safety department
- Subscriptions to DAT and Truckstop
- Factoring agreement
- Transportation Management Software ($$$!)
- Dispatch and load planning services
- Fueling location optimization based on routes
- IFTA filing
There are other perks you can get when you run under a trucking company’s authority, including:
- Trailer pools
- Big customers
- More drop and hook opportunities
- National recognition and reputation
- Financial strength and excellent credit rating
- Technical support
- Access to maintenance mechanics at a much lower rate
- ELD monitoring
The economy of scale is what’s at play here – we have accounting staff, a safety department, and load planners with decades of experience. We can only do all of this financially because of how many trucks we run. We couldn’t do all of that if we only ran one truck.
Time Is Money
If you’re a solo driver running under your own authority, you have to consider that time is money. Are you going to set time aside to do all of your own paperwork and support your business? That time is going to take away from being on the road.
When you’re booking your own freight, accessing load boards costs you money, let alone sitting there and figuring out which loads you want to take.
Time is money, and you want to spend all of your working time on the road, spinning those wheels.
Insurance and Fuel
Insurance costs and fuel are your two largest expenses, whether you’re a trucking company like us or an owner operator.
Bulk Insurance Rates
Because of how many trucks we run, we can essentially buy insurance in “bulk.” Without a shadow of a doubt, our insurance rates are a lot better than you can get as an individual.
We also have a deductible buydown program for owner operators, so if you’re involved in an accident, your maximum out-of-pocket across all lines of coverage is $1,000. That buydown program costs $17 per week, and instead of exposing you to around $25,000 worth of deductibles, you’re only exposed to $1,000.
When you run under your own authority, an accident could put you out of business. You have personal liability, damage to the trailer, potential damage to the cargo – you basically hit three or four lines of coverage, and your deductibles will be $5,000 here, $10,000 there… you could be out $20,000-$30,000 from a single accident.
Most owner operators couldn’t withstand writing a check for $30,000. They’d be out of business.
When you run under a trucking company’s authority – especially one like us with a deductible buydown program – you don’t have to worry about losing your business because of an accident.
Our company saves tens of thousands of dollars every month because of our fuel discount. We don’t pay the fuel price you see on the sign – we have a negotiated fuel discount with Pilot/Flying J.
If you’re an owner operator and run approximately 100,000 miles per year, you’d enjoy roughly $12,000 in fuel savings per year with Freight X.
You can’t negotiate discounts like that if you’re running under your own authority.
Picking Your Own Loads
Picking your own loads seems to be a huge selling point for owner operators. They want to run under their own authority for the simple fact that they can decide where to run.
To put things simply, if you work for a company that allows you to book your own loads, I can almost guarantee you they have been freight guarded in the past, and you won’t have the opportunity to book with all the brokers out there. You’ll lose the chance to work with a lot of organizations because of that.
That’s precisely why we don’t allow drivers to choose their own loads. If you change your mind and decide you don’t want to pick up a load, it ruins our reputation. If we book the load and something unforeseen happens, we probably have the ability to get the load with another truck.
If you get several freight guards, brokers won’t book freight with you anymore.
However, all of our drivers get a say in the loads they want. You can explain to our dispatch and load planning team what states you like and what runs you prefer, and we’ll accommodate that. We aren’t like other companies that tell you the freight you run, and that’s it.
We are very accommodating to our drivers and will do everything we can to make sure you’re making money by taking the loads you want to take.
$4/Mile Isn’t Actually a Good Load!
Many drivers who don’t run freight day-in and day-out get excited when they see a $4 per mile load. They book it and realize after the fact why the load paid so much – there are no backhauls! You may have to accept a load for 85 cents just to get out of that area. Even worse, you may have to deadhead 400 miles to get a decent paying load back home.
Our experienced load planning team takes all of that into consideration. We know what areas are hot, and we don’t get suckered into booking high-paying loads that are really dead ends.
Customer Freight Is Stable
Finally, we have tons of customer fright. If you pick your own loads, you’re choosing from broker freight. Sure, right this moment, broker freight is hot. When it turns down, though, customer freight won’t.
Our customer freight is stable. It takes out the market swings and gives our drivers a sense of reliability.
When you run under your own authority, you forfeit protection, fuel discounts, fantastic insurance rates, and a weekly paycheck.
It’s tough to make money with only one truck. If it breaks down, it could be down for 2-3 weeks. How will you pay your mortgage? A blown tire could cause your profit to flip for the entire week.
Freight X can withstand that because we have 80-100 trucks. Before you get excited about big money associated with running under your own authority, it’s essential to understand the truth: it’s not all people make it out to be.
If you’re interested in being an owner operator at Freight X, be sure to get in touch. We’d also be happy to answer any questions you might have about running under your own authority.
We get a lot of similar questions when new drivers call into Freight X. If you’re interested in driving for us, here are some answers to questions you may have!
#1: How much money will I make?
To make things simple, a solo company driver can expect to run about 2,700 miles per week, which brings you right around $1,200 per week gross.
That’s the simple answer, but we wrote a lot more about pay in this article, so check it out: Should I Be a Company Driver or an Owner Operator?
#2: Can Drivers pick their own loads?
In general, no, but it’s not because we want control – it’s because our dispatchers are incredible at what they do. After drivers work with our dispatchers, they tell us they don’t want to pick their own loads.
Our seasoned dispatchers are booking loads every day out of different areas. Freight can be somewhat seasonal, and what might be a great rate going to Colorado today might be not a great rate next week. In other words, just because a load is paying really well going in doesn’t mean you won’t be deadheading out.
We have the tools and experience to make sure what looks like a great rate is actually a great rate. Dispatchers are looking to maximize your weekly revenue – not just the revenue going out to a location on a particular day.
On top of that industry knowledge, our dispatchers make sure you have a scheduled appointment that’s confirmed so you’re not sitting around and waiting all day. You want our dispatchers looking out for your best interest.
In addition, we have a lot of customer freight, which means no matter how high or low the market is, our freight is reliable and steady.
With all that said, we take our drivers’ preferences to heart. A lot of companies don’t care what you want or where you want to go – we’re quite the opposite. We listen to every driver and honor their requests. We also take home time seriously.
Our dispatchers also go above and beyond to ensure drivers don’t get burnt out by building in needed breaks at home. They make sure you’re doing well both financially and mentally. We really take pride in how we treat our drivers – like family.
#3: What do you offer for teams?
We really have the ideal setup right now for team drivers. The combination of high compensation, light loads, and dedicated lanes is a team’s dream.
Here are the highlights:
- Each driver gets 30 cents for all miles the truck travels per week (even when you’re sleeping!)
- Dedicated lanes/routes
- Dedicated light loads under 10,000 pounds
- 90% drop and hook – no sitting around, about 15-minute load and unload time
- In and out of Florida
- Cash bonus if you run 3 round trips per week, which most teams take advantage of
- Each team driver consistently grosses up to $2,200 per week
Send us an inquiry if you’re a team interested in this offer.
#4: Will I be home daily?
It’s pretty rare to be home every day, but it depends on the lane. In some instances, yes.
If you’re a Florida-based driver, we do have some mail runs that are home every day, but they’re all taken right now. With that said, the lanes we have are constantly changing, so if you’re interested in driving for us, send us an inquiry and we’ll get back to you if we have a good fit for what you’re interested in.
#5: What makes of tractors are available for lease?
We’re currently leasing 2015 and newer ProStar Internationals.
#6: Do you have driving jobs in my city/state?
It depends on the contracts we get. We always have driving jobs in Atlanta, Miami, and Orlando. We typically go as far west as the Mississippi.
As far as regionality, we’re heavy in the southeast and go up the eastern seaboard.
#7: What type of freight do you pull and in what kind of trailer?
We do FAK (freights of all kind) in dry vans.
#8: I have careless driving on my Motor Vehicle Report (MVR) – can you hire me?
As you probably know, insurance companies frown upon careless driving on your MVR. Hiring safe drivers is our top priority, so we feel most comfortable with at least 5 years since the last incident. We handle careless driving from the last 3-5 years on a case-by-case basis.
#9: When can I start a lease purchase contract?
If you’re interested in becoming a lease purchase owner operator at Freight X, you must be a company driver for at least 90 days first.
#10: If I’ve been driving for many years, do I still need to be a company driver for 90 days?
Yes. During the 90-day period, you have a chance to get familiar with us, the type of freight we haul, etc. We also get more comfortable with your reliability as a driver. We have a lot of risk when doing a lease purchase agreement, so we also appreciate the extra time to get to know you as a driver.
If you know from the beginning that you’re interested in lease purchasing, we’ll start you out in the truck you want to eventually lease. You have the opportunity to try it before you buy it, and we also repair anything that’s wrong with the truck as you do your DVIRs (Daily Vehicle Inspection Report).
This helps you get comfortable with us before we go through all the paperwork of a lease.
#11: After 90 days do I just automatically go into the lease?
After the 90-day period as a company driver, you can choose to stay a company driver or you can choose to lease purchase the truck. As long as we’ve gauged you’ll be successful in the lease purchase program (not everyone is a good fit!), then we’ll put together a contract.
You’ll pick a truck (if it’s not the one you’re already driving), we’ll settle on the price, the payments, etc. We help you with everything – plates, insurance, fuel discount, and more.
#12: What are you doing for COVID-19?
Drivers can rest assured that Freight X has a robust continuity plan. We have prepared our office with remote work capability, so your dispatcher can continue serving you from home if need be. Our phone system is equipped to transfer to our cell phones seamlessly, and we have a secure way of connecting to our information with a VPN.
Our drivers are also prepared to face the challenges. We know finding meals can be the biggest challenge as many restaurants are closed, but nearly all Freight X trucks have fridges in them. We’ve also given all drivers a credit to purchase hand sanitizer, and we’re ready to offer additional support to our drivers in any way we can.
We mean it when we say we are prepared for anything. We know drivers are our everyday heroes, and it’s during a crisis that they get the much-needed attention they deserve. Thank you to all of our drivers – and the drivers across our great country – for being true front line heroes.
Learn more about driving for Freight X:
In most cases, truck drivers have two career paths to consider: become a company driver or be an owner operator. Each career path has its pros and cons – it just depends on what you’re looking for in a trucking career.
In this quick guide, we’ll go over company drivers, owner operators, and which option might be best for you and your situation.
What Is a Company Driver?
A company driver is an employee of a trucking company that drives a company truck. Company drivers are paid by the mile or the hour, and they typically receive benefits like any other employee.
Paid By the Mile vs. Paid By the Hour
So, is it better to be paid for every mile you drive, or does it make more sense to be paid for each hour you work? The short answer is it depends.
In general, shorter haul loads don’t offer enough miles to make per-mile payment worth your while. For example, if a load is only 97 miles each way, you’re only running about 200 miles per day. If you were paid by the mile, that’s less than $500 per week!
Most drivers aren’t going to work for only $500 per week. That’s why drivers who run local freight are typically paid by the hour. We call these “hourly runs.”
Guys and gals that are on the road doing 500-600 miles per day prefer a per-mile rate because it’s going to pay them more than an hourly rate.
You can really get in the weeds with the math here, but the gist is if you’re hired for a local job, it’s probably going to be an hourly position. And if you’re hired as an over-the-road driver, you’re probably going to be paid by the mile.
Sidenote: There’s a little bit of a push in the trucking industry to pay all drivers by the hour. Some believe paying drivers for every mile they run encourages speeding. This isn’t a massive push by any means – more of a gentle nudge if you will.
In our opinion, this line of thinking isn’t going anywhere because today’s technology is so advanced. For example, there are truck devices that don’t allow you to speed, even if you wanted to.
What Benefits Do Company Drivers Get?
Company drivers are employees, and as an employee, you receive valuable benefits like contributions towards your health insurance, workers’ compensation, and even access to a 401(k) retirement plan if your employer offers it.
Company drivers also have the advantage of reliability. In general, you know what your earnings are going to be (or can be), and you don’t face any unexpected expenses. Company drivers are not responsible for paying for their truck, truck maintenance, or fuel.
Here are some major things company drivers don’t have to worry about:
- Fuel costs going up and down
- No earnings if your truck breaks down (you get breakdown pay)
- No earnings if your loads are too spaced apart (you get layover pay)
- No earnings if you have to deadhead to get a load (you are paid by the mile or hour)
That’s all pretty reassuring to those who prefer the predictability and reliability of a steady job.
How Much Can You Make As a Company Driver?
Company drivers typically make between 38-52 cents per mile. This is all dependent on your experience and the distance you’re willing to drive. Regional positions pay less, for example, and drivers with a lot of experience are paid more.
Average hourly rates can span from $15 to as high as $25 per hour. The biggest factors here are where you’re driving and any endorsements you have. For example, drivers up north are paid on the higher end, and drivers with HAZMAT and Tanker endorsements are paid more.
As a company driver, the more miles you run or the more hours you work, the more you’ll obviously make, but you are capped to a certain extent. It’s unlikely you’ll ever earn more than about 52 cents per mile driven, and you can only work so many hours in the week.
Additionally, some companies won’t want you to get into overtime, and some driving jobs only pay straight time no matter how many hours you work.
Typical company drivers can expect to make between $35,000-$70,000 per year. Some of our very own Freight X company drivers are even earning upwards of $90,000 per year, so it really can depend.
Drivers with a lot of motivation who are out on the road more often tend to earn on the higher end of that range, while drivers who prefer to have more home time will be on the lower end. Needless to say, the pay is fantastic, especially since you don’t need any advanced degrees.
If you prefer predictability and don’t want to take on the risks of owning your own business, being a company driver is an excellent career path for you.
What Is an Owner Operator?
An owner operator is an independent business owner that teams up with a trucking company for back-office support. Owner operators lease or own their own trucks. If the owner operator is leasing the truck, they’re referred to a lease purchase owner operator.
Read more: 7 Ways to Avoid Getting Screwed Over on a Lease Purchase Agreement
If an owner operator has other drivers working under him or her, they’re referred to as a freight agent.
Read more: Why Becoming a Freight Agent Is the Best Way to Grow a Small Fleet
In any case, when you’re responsible for your own equipment, it means you take on the risk of any business owner. On the bright side, you are entirely independent and have the pride of being your own boss.
Are Owner Operators Considered Employees?
Owner operators are not considered employees. In most cases, owner operators are 1099 independent contractors.
Since owner ops aren’t employees, it should be said that taxes are not automatically taken out of their earnings, so please, please, please! save a portion of your income for tax time. You do NOT want to be like many owner operators who owe the IRS and don’t have the ability to pay them.
What Do Owner Operators Have to Pay For?
Owner operators are running their own businesses, and while they make a lot more money on the freight they haul, they also have a lot more expenses. Some expenses you can plan for, while others can come out of the blue.
The main expenses of an owner operator include:
- Truck maintenance costs
- Truck breakdowns
- Health insurance
- Liability insurance
- Other Unforeseen business expenses
Sidenote: Most trucking companies don’t supply health insurance for owner operators. There may be a few exceptions, but in general, that’s the standard.
While all of these expenses can definitely add up, there’s a reason why truckers decide to become owner operators, and that’s the income!
How Much Can You Make As an Owner Operator?
Owner operators have the potential to make significantly more money than a company driver. While company drivers make between 38-52 cents per mile, owner operators typically make about 70% of the load, which would be $1.75 on a load paying $2.50, for example.
Here at Freight X, we pay 74% of the line haul and 100% of the fuel surcharge. We should mention that some trucking companies advertise a higher pay percentage, and that can be deceiving. Always distinguish between the line haul and the fuel surcharge – you should be getting all of the fuel surcharge.
You can read more about that here: 5 Key Reasons Truck Drivers Switch Trucking Companies
As an owner operator, you have the power to choose your own destiny. An owner operator’s annual earnings can range from $78,000-$156,000.
If you’re out on the road diligently, you’ll be on the higher end of the range, and if you continually turn down loads, you’ll be on the lower end.
Don’t forget that owner operators are responsible for their own business expenses, but on the bright side, expenses are tax-deductible. You just have to keep track of them!
What Do Trucking Companies Offer Owner Operators?
You’re making about 74% of the load, so why are you giving up 26% to the trucking company you’re running under?
That can depend on the trucking company, so you really want to do your homework here. You want to be sure you’re partnering with a company that is supporting your growth and is offering top-of-the-line trucking solutions. Don’t give up that 30% to just anyone!
Here at Freight X, we offer best-in-class software, great customer relationships, a shop with incredibly skilled mechanics, and so much more. In fact, here’s a quick sampling of the benefits we provide to owner operators:
- Pilot/Flying J agreement – fantastic fuel discount!
- Experienced in-house mechanics that are paid by the hour, not commission
- Best-in-class tech – Dossier, McLeod, and Transflo
- More opportunities – drop and hook, trailer pools, customers
- Free subscription to DAT and Truckstop
- Great dispatch and load planning support from staff with decades of trucking experience
- Fueling location optimization to save you money on fuel expenses
- We file your IFTA
- ELD provided and monitored
These are just some of the highlights of what we offer to owner operators, but as you can see, that’s a ton of value. We’re able to offer all of this because of the volume we do.
However, we still maintain that small, family-owned company feel. When you call us, you’ll be greeted by your name, not a number. It’s truly the best of both worlds!
How Much Does an Owner Operator Truck Driver Make After Expenses?
Expenses are pretty unpredictable – as are many aspects of trucking! However, many trucking companies (including Freight X) assist owner operators by offering optional maintenance accounts.
You can request to automatically put in part of your earnings into the maintenance account until it reaches an amount you’re comfortable with. That provides you some insurance, so to speak, if you run into any major maintenance or breakdown issues.
Once your maintenance account has a good amount of padding in it, you don’t have to worry about unforeseen expenses coming out of your check.
Your expenses and income are going to range greatly, but we know you probably want to see some kind of example, so we came up with one.
Assuming you run 100,000 in a year, you should plan for about $74,500 in annual expenses. Also assuming you get $2 per mile, which is very reasonable, you would make $200,000 that year.
In sum, an owner operator who runs 100,000 miles annually can expect to make about $125,500 after expenses. And again, expenses are tax-deductible.
Here’s an example of what expenses look like if you run 100,000 in a year:
- $24,000: Fuel (at Freight X, you get a fuel card with a fuel discount)
- $16,500: Food and drink while on the road – this is called “per diem” and is major for your taxes – you can deduct $66 per day in 2021)
- $15,000: Truck maintenance
- $13,000: Insurance
- $5,000: Tires
- $1,000: General administrative expenses (accounting, for example)
Fuel is going to be your largest expense, but it’s not as bad as it sounds since it’s factored into the rate of the load. Owner operators at Freight X regularly bring home between $2,000-$3,000 per week, and that’s after fuel expenses.
Owner Operator vs. Company Driver
One option isn’t inherently better than the other – it just depends on your personality and which option fits your needs the best at this time.
You’re probably better suited to be a company driver (for now) if you agree with the majority of these statements:
- I’m relatively new to truck driving.
- I’m not financially prepared to be on the hook for tractor repairs or maintenance costs.
- I like predictability.
- I don’t generally like to take on risk if I can help it.
- I’ve never really had the desire to own my own business.
On the other hand, you might be better suited to become an owner operator if you agree with the majority of these statements:
- I’ve been driving trucks for several years (or more).
- I’m financially prepared to handle tractor repairs or maintenance costs.
- I don’t mind taking on risk when there’s a potential for upside.
- I’ve always wanted to own my own truck.
- I’ve always wanted to start my own business.
If you want to be an owner operator but you’re not financially prepared for unexpected costs and you don’t know how to own your own truck, consider becoming a lease purchase owner operator.
Read this first, though: 7 Ways to Avoid Getting Screwed Over on a Lease Purchase Agreement
If you have any questions about becoming a company driver or owner operator here at Freight X, be sure to visit our Become a Driver page. If you think being an Owner Operator with us is right for you, check out our Owner Operators page.
You can fill out the form there to get in touch with us, or just give us a call at 352-629-2042!