The trucking industry is used to transport goods all over the country. Whether shipping from manufacturers to wholesalers and dealers or between companies and subsidiaries, trucks are often the most efficient and economical means to do it. Large commercial trucking companies may own a fleet of trucks and hire licensed employees to trek them locally or cross-country, or they can subcontract with self-employed truck drivers that lease or buy a semi truck of their own, called owner operators.

These entrepreneurs will drive their trucks, and sometimes purchase or lease additional semis, hiring other individuals to drive for them as well. Owner operators are self-insured and may contract out to one individual company or have several different clients. They may be licensed for either general container hauling or specialized cargo, such as hazardous materials or livestock.

The Basics

In the trucking industry, it is more profitable for the driver to carry cargo at all times, since he or she is paid for the time spent on the road while delivering goods. Hauling jobs are often strung together from destination to destination to minimize the amount of load-free driving that is done. As a result, owner operators that participate in commercial truck leasing can pay for their semis faster when they have paying loads, rather than doing individual one-way trips.

Not all trucking jobs are long hauls; some companies service the local area exclusively. Distribution centers and manufacturers can send out shipments to shorter distances, where several trips of varying shipments can be completed in one day. Manufacturers of different goods have the ability to set their own prices for each trip, making it possible to negotiate for the best fees possible.

Pluses and Minuses

One advantage for larger companies contracting with owner operators is that they can pick and choose when to use each trucker, even assigning different owner operators to specific runs or clients for consistency. Rather than having to keep a set number of employed drivers busy at all times, the company can subcontract out jobs as needed, since product demand can be sporadic. As busyness waxes and wanes, the larger companies can bring in other owner operators when necessary, depending on how the contracts are set up among them.

A disadvantage to using different owner operators is the competition created by these individuals going elsewhere for work and not coming back. As in most industries, the best workers get snatched up, and smart contractors will do whatever is necessary to hang on to the cream of the crop through bonuses, perks and plum assignments.

Some drivers may have an owner operator lease through the company that carries all of their contract work. These individuals are responsible for maintenance and upkeep of their own equipment, while a certain amount of their earnings are set aside each month toward the lease or ownership of the truck.

For the actual owner operators themselves, the advantages of this position include being their own boss, working as often or as little as desired and choosing which partnerships to entertain or discard. Some disadvantages to being an owner operator are having to sometimes work many hours to keep up with expenses and losing work and income when equipment breaks down.

Source by Jeremy P Stanfords

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