The Trucker Newspaper - November 15, 2018

28
Cliff Abbott
cliffa@thetrucker.com
For many owner-operators, it’s a simple decision.
Leasing your equipment to a carrier can
provide many benefits. One of the biggest is
that much of the “business” of your trucking
business — the sales, billing, collecting, permitting,
compliance, tax filing and other essential
tasks — are handled by the carrier.
For owners that prefer concentrating on
driving and maintaining their equipment, it can
be an arrangement that benefits both owner and
carrier.
Leasing to a carrier has a negative side, too,
however. While you can make more decisions
about your own truck, you’re still subject to
many carrier rules, especially those that deal
with compliance.
Before you even speak with a carrier about
leasing on, make a list of the things that are
important to you.
Compensation rates and carrier chargebacks
are important, of course, but there is so
much more for an owner to be aware of.
For example, will you be happy adhering to
a carrier-imposed speed limit? You may own a
triple-digit tractor but if your carrier restricts
you to 60 mph, will you be frustrated?
Telematics is another key area to consider.
You may benefit from a satellite or other communications
unit in your tractor, but will it
be connected to the engine control module in
your unit? What will it report to the carrier,
and when? Safety departments have access to
a wealth of information about their company
trucks, including location, speed, hard-braking
or other incidents and much more. How much
data will be collected about your driving habits,
and how will it be used?
In-cab video recorders are prevalent in
the trucking industry these days. Some carriers
exclude lease operators from their video
safety programs, some demand the same
video coverage and reporting, and some fall
somewhere between those extremes. If you
aren’t comfortable with camera systems in
your truck that may record video of you while
you’re driving, possibly including sound, in
addition to the view of the road ahead, it’s
best to find out before you’re sitting in an orientation
class.
A key part of your decision will be your carrier’s
policy on forced dispatch. Under the very
definition of “independent contractor,” you
must be afforded the opportunity to choose the
loads you will accept. At many carriers, however,
you’ll be expected to run “the system,”
meaning you’ll be dispatched as needed. Terminating
your lease in retaliation for refusing a
dispatch (or multiple dispatches) can open the
PRESENTED BY MYSTIK LUBRICANTS
Leasing your equipment to carrier has benefits, but there are many cons to be considered
carrier up to legal issues, including payment
of worker’s compensation premiums and employee
payroll taxes. Most carriers won’t make
that mistake. They can, however, punish an independent
contractor in other ways, like offering
the worst loads or withholding dispatches.
Contractors who see their income dwindling
often become more willing to comply with dispatcher
demands.
Some carriers offer the lease operator the
opportunity to choose, allowing a choice from
all loads posted on a load board or at least a
choice of 3-5 available loads.
A key part of your decision of whether
to lease to a carrier will be that carrier’s
policy on forced dispatch. Under the very
definition of “independent contractor,”
you must be afforded the opportunity to
choose the loads you will accept. At many
carriers, however, you’ll be expected to
be dispatched as needed.
Another sticking point is exclusive use of
equipment. Can you use your truck to haul for
someone else, or yourself, when you’re not on
duty with the carrier?
Compensation rates are usually high on the
owner-operator’s list of considerations, but
there’s much more to these than meets the eye.
Does the carrier charge for use of their trailer,
for example? Is the contractor expected to pay
for on-road repairs to tires or other trailer components?
Ask about fuel cards, too. Some carriers offer
great discounts on fuel and other services
if the owner-operator fuels within the network,
but some charge exorbitant fees for use of the
card. Make sure you understand the pros and
cons of using the carrier fuel card. You may
find it less expensive to choose your own fueling
locations.
Maintenance is an important, and expensive,
part of truck ownership. Some carriers
offer discounted rates for parts and labor for
work done in their own shops or at vendors in
the network. Others depend on the contractor
to take care of everything.
Finally, fuel saving technology is saving
tons of dollars for carriers and can have the
same impact on the truck owner’s budget.
Trailer skirts, for example, can improve fuel efficiency
by 4 percent, according to manufacturers.
Underbelly “scoops,” wind diverters and
aerodynamic “tails” can further increase efficiency,
as can flow-through mud flaps and lowprofile
tires. Saving 10 percent of a $15,000 to
$20,000 annual fuel expense has a significant
impact on the bottom line of the business. Be
sure to ask about the carrier’s efforts to increase
fuel mileage and how you will benefit
from them.
Owning your own tractor can definitely increase
your freedom to make decisions about
your business but leasing to a carrier means
you’ll exchange some of that freedom for the
security a lease provides.
Be sure you ask the questions and fully
understand the benefits and watch-outs before
you sign the lease agreement. 8