You have seen the recruiting ads:

• Get more miles
• Get better benefits
• Home more often
• Drive newer trucks
• Safety bonuses
• Sign-on bonuses
• And the list goes on!

OOIDA has heard them all and offers real guidance in what to look for in a company/carrier.  If you are considering driving as a profession you need to take this webinar before signing on to any company/carrier.  There are reasons why the turnover rate for carriers is often above 100% annually.  Don’t let signing on the dotted line destroy your bottom line.

The transition from being a company driver to a leased on owner-operator or an owner-operator with your own authority will require research, planning and strategic action if you are to be successful.  Nearly 90% of all business failures occur within the first year of operations.  This module is an overview of all the necessary steps needed to get you started and to inform you of the multitude of new responsibilities you are about to take on.  It provides an overview of many of the Modules in the Business Webinar Education series of Modules.  You will be able to get a quick look at all the necessary steps and determine which areas you need to be the most concerned with.  It is a gigantic leap and getting an idea of what cost are involved and rates needed to meet expenses and still make a profit (your bottom line) are explored.  It may not be the decision for you right now, take the time and know what it takes to figure your bottom line.    

Find the right financing for your truck and equipment.  Keep in mind there are no “lemon laws” for large trucks.  You buy it it’s yours, so let the buyer beware.  Know what lenders are out there and what they look for it loaning money for trucks.  There are no limits on the amount of interest that can be charged on a loan for large trucks, we have seen interest rates as high as 40% and up learn how to read the loan agreement carefully and what to look for in the loan contract.  Don’t start out in the hole making your bottom line almost impossible to achieve.

Lease-purchase programs are often tempting because of personal bad credit but learn why they often lead to bankruptcy for you and great profits for the carrier.

Learn how lenders look at:

• Positive tradelines
• Negative tradelines
• How to keep your credit scores above 700 (The magic number)
• Value of your work history
• Loans vs. Finance lease vs. Residual lease

More than likely your biggest initial cost outlay will be the tractor you are going to run.  While you may have been running a certain model tractor, engine and drive train provided to you by your carrier it may not be the best fit for your business model.   

What are the returns on investment for fairings, boat tails and other mileage enhancers?  Know the demographics of where you are planning on running and which engines and drive trains are best.  Know how to find the “sweet spot” of an engine to get maximum mileage and the least wear on an engine. 

If looking for a used truck what should you consider?  How do you tell the engine use and where should you look on the tractor for unusual wear and abuse?

How do you tell if the dealer is representing the truck honestly and what must they provide.  Is it better to lease or buy?

Don’t let your initial investment destroy your bottom line.

• Detention pay
• Get more miles
• Sign-on bonus
• Home more often
• Dedicated routes available
• Safety bonuses
• Mileage pay or a percentage of the load
• What questions should I ask of a recruiter and where do I look for factual information? 
• Learn some of the tell tale signs that the carrier may not be the one for you before you get into a lease; as you could lose everything very quickly.   

Confused as to who to lease on to?  Learn how to cut to the chase and determine which carrier/company will help you reach your bottom line success. 

The Leasing Regulations that all motor carriers must abide by are listed in 49 CFR 376.12 of the Federal Motor Carrier Safety Regulations.  The responsibilities of both the lessee and the lessor are spelled out; however, we also know that this is one of the most violated sections of the Regulations. 

The FMCSA does not normally enforce these regulations so it is imperative that you understand your rights and obligations under a lease. This is a legally binding agreement that you operate under when leasing on to a carrier.  There are many nuances that can trip you up and get you in trouble and you need to know your rights under the leasing regulations.  This module will walk you through a compliant lease and inform you of what to look for and what to negotiate. 

“Know when to walk away and when to run!”  This is generally true when the carrier wants to put you into a lease purchase program.  Learn why if it sounds too good to be true then it probably is.  There generally is no bottom line under a lease-purchase through a carrier or carrier affiliate.

You know what you must have to operate legally as defined in CFR 49; 387.7--387.419, but what do you need to protect yourself and your business?

You will learn the difference between what is required and what optional coverage's you should consider.   

Did you know that if you are leased to a carrier and you are not under a load you probably are not covered under the carrier's liability if involved in an accident? Do you know the consequences of hauling a load and not having enough cargo insurance for the full value of that load? 

One such claim and you will never have to worry about your bottom line again.

Even though the Motor Carrier Safety Reauthorization Act 2005 eliminated the requirements to designate whether you were a common or contract carrier you still must declare a preference.  There are advantages and disadvantages to each depending on your business model.

There are various government forms that must be filled out correctly (FMCSA states that well over half of all filings are inaccurate and never get processed). How you fill out these forms will dictate the legal operation of your business and determines the cost of your insurance.

There are cost savings through changes you can make in your authority filings, or maybe you are looking to lease on to a carrier for awhile and need to know how to revoke your authority so that you can reinstate it at a later date.

Initially you may have indicated you wanted to list all 48 states to operate in but now find that you only run in 10-12 states; by revising your authority filings you may save yourself money.  You also may wish to revisit your insurance coverage, to see about saving on insurance, permits and other licensing.  You may be thinking of incorporating and need to be aware that some states demand a fee from all incorporations doing business in their state.

You may be looking at getting your broker authority and need to know the right way to do it and the up side and the downside of brokering.

Other topics covered include:

• Intrastate authority (Required in some states but not all states)
• What permits are needed in specific states in order to operate
• How to file a BOC-3 (Required in every state selected to operate in)
• Insurance requirements for selected cargo and operation classification
• UCR, IRP and IFTA requirements
• Dispute period
• Broker, Private carrier, Freight Forwarder  and Exempt authority (Split operations)
• Revocation of authority and reinstatement procedures
• International freight exemption on DOT numbers
• Cost of authority

It’s your bottom line and every penny counts!

Every new carrier will have a safety audit within the first 18 months of operation.  A Safety Audit is not the same as a compliance review but doing poorly on a safety audit can trigger a compliance review.  There are 16 basics (“16 deadly sins”) that if you have any of these violations you automatically fail the review and could have your authority revoked.  Find out what you can do if that happens. 

• Learn the difference between “acute” and “critical” provisions of a safety audit
• Learn what to say and show and what not to say and show an auditor
• Learn the “politically correct” way to handle the audit
• Know your rights  during the audit and your options
• Learn the 6 factors covered/ and the scoring

There may not be a bottom line if you fail the safety audit!

It is vital to your business that you keep accurate and updated records.  Learn not just how to register your truck but some potential pitfalls.  Did you know that if you let the carrier register your truck and you leave that carrier he owns the plate and you cannot drive that truck legally?  

Learn about:

• HVUT
• International registration plan (IRP) Estimation of miles for each state you plan on running in and why this is so important for your insurance
• Unified Carrier Registration—what to do if your state does not participate
• International Fuel Tax Agreement (IFTA)
• Permits required just to drive through a state

Each of these cost you money and need to be a part of your rates to protect your bottom line.

According to the FMCSA one of the highest violations on the Safety Audit/Compliance review is not belonging to a Consortium for drug testing.  If you are the owner and the driver you must comply with the regulations that apply to employers and employees.  There is a fine of up to $10,000 for not being part of a Consortium; you also will not be allowed to operate until you belong to a certified consortium.

You need to know:

• Drug and alcohol prohibitions
• The 7 test required under CFR 49; Part 382—Subpart C
• When a pre-employment test must be done and which ones may be done
• What requirements are there for Post-Accident testing
• When and what constitutes Random testing and how can you be selected
• What constitutes Reasonable Suspicion Testing
• What is Return to Duty Testing/Follow up testing
• When must Directly Observed Test be taken
• What constitutes a refusal to test
• Consequences of failing  or refusing a test

Not knowing can cost your bottom line in a big way.

According to the small business administration over 90% of all small businesses fail within the first year.  The primary reason is the inability to control cost.  In many instances the cost of operating a business is not well known. 

If you have been driving for a company you have not had to adjust your cost to stay in business.  It is imperative that you understand the various cost of operations, both fixed and variable as well as the cost to maintain your home and family.

The average cost of operations for the fixed and variable expenses are based on the surveys done on owner-operators that are members of OOIDA. 

There will be exercises to show how to manage some of the variable cost and even some of the fixed cost.  This is an essential module that anyone thinking of getting their own authority or being leased to a carrier needs. 

You need to know how successful carriers have been able to adjust their routes, build their business with shorter routes, and utilizing more LTL freight.

Know how to look up the rates for produce coming out of the ports in California and how to post your truck on the load boards.

Which states and freight lanes pay higher rates and which do not and why.

What does it take to get Department of Defense loads?  Negotiating a fuel surcharge into your rates is important and sometimes preferable to charging higher freight rates.

This where you arrive at your bottom line.

This is your starting point for your business.  This is where you evaluate all the options before making a commitment to going into business for yourself.  The business plan is where your dreams must coincide with reality.   

Is your business plan a blueprint to success or a road to failure?  You need to determine if getting your own authority is right for you and to do that you need to know what are the cost and expectations for the future.

• Do you know how to read the economic indicators affecting the trucking industry, such as the value of the dollar and consumer confidence index?
• Can you define your short term goals, in relation to your cost of operation (Looking at fixed and variable cost as well as home and family cost)?
• Learn to estimate your gross and net income (which you must do for tax purposes).
• Is it better to get paid a percentage of the load pay or by the mile?
• Determine your assets in contrast to your liabilities.
• Develop a marketing strategy, knowing the freight lanes and how to post your truck on the load boards.
• If your Business Plan is to be presented to bankers and investors the formatting needs to be a little different but always showing that you have planned and examined your options thereby reducing your risk of failure.   

It is time to expand your Business Plan to include all the things you didn't know when you were beginning your business. Keeping in mind your business plan is your blueprint but one that must remain flexible. 

Where can you cut cost without sacrificing efficiency and productivity? How can you increase your profits while minimizing your cost?

Understand how the economic indicators can help you make informed decisions about what to buy and where the most profitable routes will be. Understand the need to keep informed about:

• Gross Domestic Product
• Inflation
• Global market concerns 
• Trade deficit
• Unemployment
• Recession
• Value of the dollar
• Fuel surcharge vs. higher rates

Is it time to incorporate and what type of incorporation is best?

It is imperative that you understand both the value of Load Boards and the potential problems.  There was a time when load boards were for back hauls to help get you home with little or no real revenue or a load that took you from a location where few loads are moving to a place where rates were better and you are willing to possibly lose some revenue just to get moving. Today is much different as posting your truck and using the services of a load board can keep the wheels turning and revenue earning.  Knowing about the NAIS codes and utilizing them can create a solid base for your trucking company.  Sometimes even leased on owner-operators can get their own load, as long as they respect the lease contract and the percentage of load pay or pay per mile rate agreed to in the lease contract. 

If you are planning on operating under your own authority you will probably be dealing with independent brokers and carriers who broker loads.   

At the present time there is little oversight of brokers by the Federal Motor Carrier Safety Administration.  You do have rights under broker agreements but there are no standard broker contracts that are universally recognized. 

Broker transparency is largely absent so it is vital that you learn what your rights and responsibilities are in broker-carrier agreements.  You need to know what you must negotiate into the agreement in order to protect yourself from fraudulent practices and to receive all the compensation you are entitled to.  You will walk through a good broker-carrier agreement.

You need to know:

• Can you file on their bond
• Is their insurance/bond in good standing
• Are they in good standing
• How to file on the bond if the broker fails to pay you.  

Broker rates are not set in stone whether it is an independent broker or a carrier broker they are often open to negotiation.  Always keep in mind if you are relying on brokers to get your loads you are on the road to failure unless you learn some negotiating skills.

Factoring is not something you want to actively pursue but it can be useful and necessary when a cash flow is needed.  There are good and bad Factoring companies and the module provides help in discerning the difference.

You must negotiate to meet your bottom line.  Know when to “hold’em and when to fold’em”, “when to walk away and when to run”.

CSA is supposed to cut down on comprehensive compliance reviews but roadside inspections can and will trigger a more targeted compliance review.  The reviews will remain the same but be focused on the CSA Basic area where deficiencies are noted. It is still necessary to have a compliance review in order to get a safety fitness determination (Satisfactory, Conditional, or Unsatisfactory).  Your safety fitness rating can affect your ability to get loads.

However, while on site the examiner can/will note any problems that exist within your business.  It is predicted that a lot more compliance reviews will be done under CSA but they are to be more targeted.

Most compliance reviews will be a lot of paperwork and how well organized you are in maintaining that paperwork. Know that they will still check for the "16 deadly sins" that the examiner will be looking for in the review.  Know what things are required and what things are not required.  Learn to professionally provide all required paperwork.

In case of a disagreement with the examiner know what your rights are and how to file an appeal.

While it is true that when you applied for a CDL you also granted certain concessions to regulatory agencies and their representatives that may seem unconstitutional.  It is best to get the facts from the experts rather than rely on the “driver lawyers” at the truck stops. 

Common misconceptions will be bought out and discussed.  When is it best to plead guilty and pay the fine and when is it better to have your day in court. 

There will be time at the end for questions and answers.

Most owner-operators run their business from their truck or from home.  You must have a place of business in order to get your authority and that is where the FMCSA will expect to be able to contact you or one of your representatives. For most owner-operators the home is their terminal and business location.  There are things you need to keep at your business if and when DOT comes “a-callin”. There are things that will make everything easier when running an office.  Learn the things required and what things you don’t want at your business location.

Taxes are part of the business and for the owner-operator it can be confusing.  Learn the basics of what you must file and when.  How to estimate your taxes as you pay them quarterly and if you have employees what the criteria is for being an employee versus an independent contractor.

Yes taxes have to be considered for your bottom line.