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Becoming an owner-operator is an exciting step in your trucking career. You now have the opportunity to be your own boss, make more money, pick your own loads, and choose when you want to take time off. However, this type of career isn’t for everybody. There are many things you have to consider before making the jump from company driver to owner-operator. Here are five things all truck drivers should know before owning a trucking company. Are you a self-employed truck driver that needs help with your taxes, accounting, or bookkeeping? Click here! Know how much it is going to cost Starting a trucking company isn’t a cheap investment. There are a lot of upfront costs you’ll have to pay before you’re able to start driving. Some of these costs include the down payment on your truck, your license, plates, insurance, and permit fees. After these initial costs, there are other expenses you will face each month. These include fuel, maintenance, food, etc. It is important you know how you are going to cover these costs before your business starts making money. The first six to 12 months will be difficult as you are trying to earn the money back that you spent on the initial investments. One of the things ATBS does with each of their clients is help create a profit plan. This will help you keep track of both your business expenses and personal expenses. This way you will know how much money you’ll need to make each month to break even and make a profit. The number one reason why new businesses fail is due to inadequate cash flow. Before you get started with your business, make sure you’re ready for this investment. Know how you are going to be taxed One of the biggest differences between company drivers and owner-operators is the way they are taxed. Many first-time owner-operators don’t realize they will have to start paying taxes on a quarterly basis rather than having taxes automatically withheld from their paycheck by an employer. ATBS recommends that drivers set aside between 25 and 30 percent of their weekly income for quarterly taxes. This means you should keep all business receipts and documentation so that you are able to easily track your earnings. Know who your customers are going to be When you start your own trucking company, chances are you will lease on to a carrier. This means they will provide you with potential customers rather than you having to go out and find them on your own. This doesn’t mean it’s still not important to know who your ideal customer will be. First off, your customer will be determined by what type of operation you are. The type of customer a flatbed trucker will be delivering to will likely be different than that of a dry van driver. When you know your operation, you will know who your typical customer is going to be. You will also want to determine how you can create value to your customer. Know what you do best and use that to your advantage. While being leased on to a carrier, you may have little control over the rates. However, you are able to determine other things about your operation that make you stand out from the crowd. When you have decided how you are going to be unique, you will be able to find, and keep, customers who like how you operate your business. Know the rules you have to comply with Before you get started as an owner-operator, you’re going to need to know the rules and regulations you’ll need to comply with. Your truck must meet CSA safety standards in order to keep your business from being shut down. Each driver is required to have a working Electronic Logging Device (ELD) in their truck. This will help you keep track of your Hours of Service each week. Finally, the CSA has a list of physical qualifications you must pass in order to qualify as a fit driver. It is necessary for any owner-operator to know all of these rules and regulations before they begin driving. Know that owning a trucking company is hard work Owning a trucking company is a lot of work. That’s not much of a secret. You spend a majority of your time behind the wheel, and when you’re done for the day all you want to do is relax. But as an owner-operator, you’re also a small business owner. That means no matter how tired you might be, you still have a business to run. Outsourcing some of the day-to-day tasks will help reduce your workload and allow you to focus on what you love...driving your truck. ATBS has helped over 150,000 owner-operators with their accounting, bookkeeping and tax preparation. If you’d like to learn more about how we can help you get your business off on the right foot, give us a call at 866-920-2827.

Not only are most Americans' refrigerators and cupboards full of junk food, but so are our highways. While driving the highways across the country, how many signs do you see for healthy food options? Probably not many if at all! Truck stops are full of McDonalds, Chick-fil-As, and Taco Bells among others. Not only are most of the food options full of empty calories that cause weight gain, they are mainly comprised of carbohydrates and sugars. Carbohydrates and sugar aren’t entirely bad for you if you consume them within reason. However, if your afternoon snack consists of a Twinkie, bag of potato chips and a soda then you might have more problems than just your expanding waistline! A diet full of too much carbohydrates and sugar can lead to many health conditions such as obesity and diabetes. Too much sugar can also lead to sleepiness, which is obviously not good for you if you still have a 5 hour drive to your next off-load. When we feel tired and need a little mid-afternoon pick up, we have a tendency to reach for a can of soda or candy bar. The sugar gives us a quick burst of energy, but then it fizzles as quickly as it came, leaving us more tired than before. Several studies have indicated that protein-rich foods can increase cognitive performance and leave us feeling full longer. But how can I carry steak and fish with me while on the road? Protein can be found in a wide range of food products, not just animal meats. You’d be surprised what you can actually snack on while driving that doesn’t need a grill and freezer to stay fresh. Just grab a small cooler and fill it with ice and whatever might be your fancy from the below list of healthy, protein-rich snacks! 1. Fruit with Nut Butter No one can go wrong with the classic apple and peanut butter snack. Peanut butter contains about 8 grams of protein per 2 tablespoon serving. When buying peanut butter look for brands with little to no sugar. If peanut butter isn’t your thing or you’re allergic, almond butter is a great alternative. Nut butter also goes great with other fruit such as pears and bananas. 2. Veggies with Hummus or Nut Butter Hummus and vegetables go together just like apples and peanut butter. Want a super-easy way to eat vegetables and hummus? Place about 2 tablespoons of hummus in the bottom of a travel mug (preferably one without coffee as that might not taste so good!), and put a handful of vegetable sticks (carrots, celery, etc.) vertically into the hummus. Hummus contains protein, heart-healthy fats and lots of dietary fiber. 3. Hard Boiled Eggs The “incredible-edible egg” is an excellent source of protein and very easy to munch on while driving. One egg has about 5-6 grams of protein and is only about 70 calories. Many truck stops and variety stores offer hard boiled eggs in pouches or you can make your own at home and keep them on ice. 4. Nuts Nuts make great portable snacks, but make sure you eat them in moderation as their calorie count can add up quickly. One ounce of almonds, or about 12 nuts, has 184 calories and contains healthy omega-9 fatty acids. Other great options are walnuts and pistachios (the nut not the ice cream). 5. Trail Mix Trail mix is another easy to eat and healthy option. Grocery stores sell a wide variety of types and you can often make your own by combining your favorite nuts, granola, and dried fruits. If you buy prepackaged trail mix, just make sure to read the nutrition labels. What you may think is healthy, might not be. Go for a trail mix with lots of natural or lightly salted nuts and dried fruit. 6. Yogurt (or Cottage Cheese) with Granola and/or Berries Are you looking to get your protein fix fast? A cup of Greek yogurt contains upwards of 17 grams of protein! Choose plain (way less sugar) and add a little granola and/or some fresh or frozen berries. Strawberries, raspberries, blackberries, and blueberries are all low-glycemic fruit and contain many vitamins. Not a fan of yogurt? Try cottage cheese! 7. Deli Roll Ups or Veggie Wraps Deli meats and cheeses are easy to purchase at a grocery store and can be stored in a cooler with ice. Sandwiches no longer need to be made with bread. Just pick one or two meats (turkey, chicken or ham work great) with one slice of cheese and roll it up and eat it. If you want to add a little color to the sandwich, roll it up in a piece of lettuce and add a slice of tomato or your favorite veggies. Alternately, you can fill a mini-pita pocket or wrap with a bunch of your favorite veggies for a nutrient-packed sandwich option. You can prep for this snack in advance by buying precut veggies or cut them up yourself prior to leaving your home or truck stop. 8. Beef or Turkey Jerky Beef or Turkey Jerky can actually be healthy for you! Plus it’s super easy to buy on the road and doesn’t need to be kept cool. Just make sure to avoid the sodium and sugar heavy brands as those can become rather unhealthy quickly. The low-sodium and natural brands are a great source of protein with a one ounce serving containing 9 grams of protein! 9. Tuna Pouch Tuna now comes in easy-to-eat portable pouches. You don’t need to drain the excessive water and each pouch packs about 16 grams of protein. The healthy Omega-3 fatty acids in the tuna fish may reduce coronary heart disease too. 10. Mini Cheese Plates Cut up a small piece of cheddar cheese or even a sting cheese stick and put it in a small cup or bowl. Add in a few almonds or walnuts and a few slices of apple or berries and you have yourself a quick and healthy snack. Cheddar cheese is high in protein and calcium. Eating healthy on the road shouldn’t be hard. With a little prep work and a cooler of ice, you can bring along a few healthy and delicious snacks, that are good for your heart, friendly to your waistline, and will help keep you alert longer. Be sure to consult a healthcare professional before starting a new health regimen. Source image 1: https://www.flickr.com/photos/serdal/ Source image 2: https://www.flickr.com/photos/the-travelling-bum/ Source image 3: https://www.flickr.com/photos/heatherjoan/ Source image 4: https://www.flickr.com/photos/andreelau/

As a lease-purchase owner-operator, there are many things to consider when deciding what company to lease onto. Even though you are technically the boss of your own trucking company, the carrier that you pull for still has an effect on your career. You want to make sure that you’re happy with the trucking company you are driving for and that they are allowing you to be successful. Whether you are a first-time lease-purchase owner-operator or you have been one for a while, consider these things when deciding which lease-purchase trucking companies are worth driving for. Where do they typically run? When deciding what trucking company to drive for, you will want to align what part of the country you want to drive with the part of the country the carrier specializes in. If you want to drive along the west coast in order to be close to home, it would not be beneficial to lease onto a carrier that typically hauls freight in the south. Even though you would be able to find loads in most of the country, your options would be slim compared to a carrier that focuses on your preferred area. What type of operation do they run? The type of operation is another decision that you should make early in the decision-making process. This will help simplify your search and minimize the number of trucking companies you have to choose from. The three most common types of trucking operations are dry-van, reefer (refrigerated), and flatbed. Each type of trucking operation has its own pros and cons so it will be worth researching what works best for you. Also, as a lease-purchase owner-operator, chances are you already have experience with at least one of these trucking operations. Use that experience to help you make your decision. Simply put, if you want to haul a dry van, look for a carrier that specializes in dry vans. How many miles do you expect to get? The number of miles you can expect to run will be determined by you and the trucking company you are leased on to. As an owner-operator, you choose your own schedule, so you will have the most control over how many miles you run. However, the type of freight and areas the company hauls will have a big impact on your miles. If you like lower miles, choose a company that has a short length of haul with many regional runs. Large pools of dropped trailers will also help you be efficient in this type of operation. If you like longer lengths of hauls with more miles, choose a carrier that hauls more transcontinental freight. These are often refrigerated carriers. If you like physical exercise and high involvement loads, you may choose a flatbed carrier where miles are much lower. How much do you expect to make? Similar to the number of miles you expect to run, the amount of money that you expect to make is also controlled by you and the carrier. You control how much money you make by choosing what loads you haul. The carrier controls how much you make through either a cost per mile (CPM) lease or a percentage lease. A CPM lease sets the exact amount of money that you get paid for each mile you drive. For simplicity, let’s imagine you drive 1,000 miles at $1/ mile, you earn $1,000. A percentage lease gives you a percentage of the revenue you earned from hauling the freight. If the freight you haul earns $1,000 and you earn 70% of that revenue for yourself, you earned $700. As a lease-purchase owner-operator, you should know that it is not just about how much money you earn, but also how much money you spend. There are many expenses that go into being an owner-operator and we go over many of these expenses in our “5 Biggest Owner-Operator Expenses” article. What are some of the incentives? The last thing to consider when trying to decide what trucking company to drive for is the incentives offered. These incentives are used by trucking companies to get drivers to select their company over the competition. Different incentives that are sometimes offered to drivers are sign-on bonuses, a zero money down payment on the truck, fuel discounts, maintenance discounts, referral bonuses, etc. Many trucking companies offer similar incentives so your decision should not be made solely on this. If you’re having a hard time deciding between two or three companies, take a look at the incentives and see which company offers the most, or the best incentives. This may help make your final decision. Are you ready to choose your lease-purchase trucking company? Keep these things in mind the next time you are deciding what trucking company to drive for. These decisions will help you be a successful driver and more importantly, a happy driver. If you have any questions about your decision-making process, feel free to give ATBS a call at 866-920-2827, or visit our website at www.atbs.com.

By: Mike Hosted, VP, ATBS From May 2020 until April 2022, we saw the biggest and longest freight boom in the history of trucking. Most great freight cycles are here and gone in 6 to 12 months, but because of many extraordinary factors like the COVID-19 Pandemic and government stimulus, this past booming freight cycle lasted two years! This caused an unprecedented number of ICs and trucking companies to obtain their own authority and move to the spot market to cash in on the record freight volumes and rates. However, as we stated in our article back in April, “the times were a changin”. Since April, we’ve seen: Fuel spike to nearly all-time highs. High volumes and rates in the spot market evaporate to pre-COVID levels. Maintenance costs continue to soar and parts remain scarce, which is causing much longer than normal downtime for repairs. Purchasing a new or used truck continue to be unbelievably expensive. AB5 became codified in California. Labor shortages causing headaches and delays at shippers and receivers. And now, contract rates are starting to drop. What a list of hurdles and changes! For the seasoned veterans out there, you know that trucking is cyclical and will always have its ups and downs. However, this last freight boom brought many new faces into the IC world of trucking. Those newer folks have never seen a downturn and therefore may not know how to manage their business in a down market. Yes, some will fail and go back to being a company driver or even leave the industry altogether. However, for those who want the American Dream of owning their own business… now is the time to dig in and make your business as efficient as possible while taking some extra steps to ensure success! It’s really time to get back to the basics. Any football fan can relate that it’s time to focus on “blocking and tackling” to push your business forward. Getting back to business fundamentals 101 will not only keep you afloat now, but set you up for even better success when freight gets back to great levels in the future! So what can you do right away? Don’t Panic, Rates are Down Everywhere The grass isn't greener on the other side and changing carriers is extremely expensive when you factor in downtime. Expand your area of operation and go places others don’t want to. A significant number of drivers now have the mindset that they won’t go to certain areas of the country. That can really shrink the availability of good-paying loads. Re-explore and be open to going into more difficult markets while having an understanding of your cost per mile and the time it takes to get in and out of there. Understand Your Profit Plan and Update Your Numbers. Now is the perfect time to take a step back and evaluate your profit plan. Putting together your revenue forecast, fixed costs, and variable expenses can help you identify where to make financial changes quickly. If it is done correctly, you can also understand your break-even point, or how much revenue you need to generate to pay your trucking and home bills. You can also identify your needed tax savings quickly to make sure you don’t fall behind with Uncle Sam. Reduce Your Biggest Cost Right Away! Fuel is the highest cost for almost every truck. Luckily, it’s also the cost you can control the most. Habits and the latest fuel technology are quick additions to reduce your biggest cost. Remember every dollar you save on fuel goes directly into your pocket! What do you need to set up for more long-term success? Monthly Financials (P&Ls) A good business always tracks its financials and monitors them at least monthly. Now that you’ve set up your new profit plan and know what it takes to be successful, make sure you have a scorecard to monitor your progress. A profit and loss statement can be compared to your profit plan to make sure you are reaching your revenue and expense goals to hit the bottom line you need to achieve your own personal success. Change Your Revenue Mindset Consider running lanes and routes you haven’t previously. Don’t just focus on the highest rate per mile; focus on generating the most revenue per day over a sustained number of days. This may include accepting some substandard rates that get you into a market where rates are higher. Don’t sit and wait (layover) hoping for a better rate the next day. The average O/O has business and personal fixed costs of $240/day. If you sit two days waiting for a load that pays more per mile, you’ve dug yourself a hole of $480 that is harder to get out of. Make Sure You are Saving Enough for Repairs Maintenance is the #1 reason for IC failure. It’s not always the cost of the repair itself that causes a business to fail, but often can be the extended downtime associated with the repair where you still have fixed costs and home bills to pay without generating revenue. You need to make sure you have an in-depth and personalized maintenance plan for your truck. Our average IC is saving between 12-14 cents per mile. Be More Frugal Sometimes the best way to have better cash flow in tough times is to really really watch your spending. Shop around for the best price on fuel. With a carrier, that is often what the fuel routing software tells you. Check on your insurances to make sure they are appropriately assessing the value of your truck. Most importantly, when times are tough, be frugal with personal spending on the road. Eating at restaurants has become very expensive and is a great way to increase spending quickly! The bottom line is that things in trucking took a major downturn here in the last six or seven months. For some of us, this is just another cyclical event that we’ve been through before, and we’ll survive this one too. For those of you who are newer to this world, we need to focus on getting back to the basics. Tighten your financial belt, start making changes today, have a more in-depth long-term plan, and work a little harder. Tough times can easily be defeated with hard work, and it will always set us up for better success when things turn around like they always do! At ATBS, we have worked with owner-operators for almost 25 years with the purpose of helping our clients become more successful business people and save money on taxes. If you feel alone and down about the market, give us a call and we will fight with you to come out of this stronger than ever. Ready to get started? Visit www.atbs.com or call (866) 920-2827.

Recently, I had the privilege of getting an inside look at how ATBS, a corporate tax and consulting company, functions. Being a truck driver, I definitely felt out of my element, however, I did see how this professional corporate atmosphere may appeal to certain people. Today, I will talk about these demographics and how they interact with each other. This is just a personal observation, but office workers are more likely to have a formal education, as opposed to drivers who usually don’t. Generally speaking, people who go to college tend to have more liberal/ progressive values, as do people who live in cities. This contrasts with the average driver, who tends to be blue-collar and holds traditional, conservative values. Why highlight these values? To better understand our coworkers and customers, we should acknowledge and celebrate our differences. This is what’s at the heart of the value of diversity. A shared goal we have is to grow together and create a thriving business that serves our community. Any feelings of animosity or disdain should be acknowledged and released, keeping in mind our shared goal of cooperation. Remembering that it’s “us versus the problem” helps reinforce this notion. To combat any team or tribal biases, it’s good to keep respect in mind. Specifically, respect for someone’s freedom to choose their values and beliefs without the need to persuade them otherwise. Respect and acceptance with a desire to serve is how I choose to show up for my customers. Genuinely empathizing with each other's values, will encourage a better relationship with everyone we do business with. I appreciate ATBS for making the effort to better connect with its customers. They play a vital role in ensuring the success of my business, so that I may continue to provide excellent service to my customers. Thank you for taking the time to read this and remember: United we stand, divided we fall. Sources: https://www.pewresearch.org/politics/2016/04/26/a-wider-ideological-gap-between-more-and-less-educated-adults/ https://www.zippia.com/professional-truck-driver-jobs/demographics/

If your business has elected S Corporation status with the IRS, you have differentiated yourself from your company by making the company a separate entity, or corporation. Therefore, when you (the owner/shareholder) perform services for your business as an employee, the IRS requires you to take reasonable compensation in the form of a wage that will show up on a Form W-2 at year-end. Then, as an S Corp shareholder, you are required to pay Social Security and Medicare taxes on your W-2 salary. However, the benefit of an S Corp is the amount of net income that is produced over and above the amount of the salary paid does not have the Social Security or Medicare tax applied thus saving tax dollars. The IRS wants you to pay yourself a salary that you’d pay someone else to do your job for you. When determining what salary is adequate you must take into consideration the various items that determine fair and reasonable pay. Title of the position, duties of the position, time spent on the job, experience in the position, among other things. It can be up for interpretation, so check with your CPA and other financial advisers to make the best decision. The biggest risk you can take as an S Corp owner-employee is to take no salary at all. It is relatively simple for the IRS to develop a report of 1120S returns with no owner’s compensation and net profits or distributions, which means it’s hard to hide from the IRS if you aren’t paying yourself a salary. This is a red flag for the IRS and creates an easy court case for the IRS to win if you happen to get audited. In the case of an audit, the IRS will have an easy time having the courts side with them when no or too little compensation has been paid. After they win the case, the IRS will likely choose a salary for you that is more than you would have allocated for yourself, thus requiring more Social Security and Medicare taxes to be paid, not to mention steep penalties and interest which will make it extremely difficult to stay in business. Therefore it’s best for you to decide your own salary, pay yourself that salary and lessen the chance that the IRS will step in and decide it for you. In closing, you can’t have the best of both worlds. You can’t minimize tax by becoming an S-corp and also not pay yourself wages through a W-2. By doing this you are completely avoiding Social Security and Medicare tax which is a slam dunk case for the IRS to win. Questions? Give us a call at 866-920-2827 or send us an email at info@atbs.com.

Hiring an employee, even a team of employees, is exciting for your business. As an employer, it’s important to be aware of your new responsibilities. In this article, we identify the key steps when hiring a new employee, setting up payroll and the necessary tax withholdings. Step 1: Forms. On the first day of employment, you will want the employee to complete form W-4. This form helps the employer determine the accurate federal income tax to withhold from their paycheck. Be sure to indicate whether you are hiring an employee or an independent contractor. This status clarifies how you withhold earnings and pay employee taxes. If you hire an employee, taxes are withheld from their paycheck. The employer provides a W-2 each January to its employees. On the other hand, if you hire independent contactors, you do not withhold tax from their earnings. The contractor is responsible for calculating and paying their own tax. Step 2: Payroll Process. There are decisions to make when it comes to payroll operations. The first thing to consider is how often you will provide a paycheck. Second, you need to determine how much you will pay in terms of employee wages. Finally, you will need to work through the taxes to withhold for W-2 employees. This process requires that you set-up an Employer Identification Number [EIN] with the IRS. Click here to learn more about the EIN. Payroll is an extremely important process and a big responsibility so you will want to find a process that makes sense for you whether it’s in-house, off-the-shelf software, or a payroll service. If you choose to manage payroll, this will require your time and a detail-oriented mentality. If you don’t have much time, you might consider outsourcing the process to a payroll company. At ATBS, we offer high quality payroll services at a competitive price. We partner with the nation’s largest payroll company giving our clients peace of mind that their payroll service will be impeccable and all filing deadlines will be met. With so many clients using our payroll services, ATBS can provide payroll services at a tremendous discount. Step 3: Payroll Taxes. When hiring a W-2 employee, you must remember the federal, state and other local laws surrounding payroll tax. As the hiring entity, you will be responsible for this. A Payroll Service can walk you through this part of the equation and ensure you are compliant. In addition to taxes, you will need to withhold a portion of the paycheck in order to cover income tax, social security, unemployment taxes and Medicare. For information on each withholding, you can speak to your ATBS business consultant. Step 4: Reporting. The earnings and withholdings need to be reported and you will want to be sure and report the following: 1. Quarterly Payroll Tax Return [Form 941] 2. Form W-2 provided to your employee[s] 3. Federal Tax Deposits 4. Form 940 or 940EZ, the annual Federal Unemployment [FUTA] Tax Return 5. Form 945, Annual Withheld Federal Income Tax Step 5: Maintaining Records. Proper record keeping is fairly straightforward and you will want to retain the W-4s and W-2s for three years on all current employees and any employee who has left. All tax filings and records of tax deposits should be stored in a safe manner and accessible by the employer for a minimum of four years. When you partner with a Payroll Service company, you can ask about record keeping as part of the service. At ATBS we partner with small business owners at every stage of their business growth, from sole proprietor to small business owner. Payroll is a natural element of business growth and can play a key role in providing your clients with the best product or service possible. Source: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Payroll-Professionals-Tax-Center-Information-for-Payroll-Professionals-and-Their-Clients

If you’re considering making the jump from being a company driver to an owner-operator truck driver there are several things that you can do to help become more successful. Start by creating a business plan. Before you decide to go out and purchase or lease a truck, take the time to put your personal finances and financial goals down on paper. Understanding and knowing where you are financially is extremely important. Next, you need to operate from the mindset of a business owner. This is your truck, this is your business, and responsibility now falls on you. Last but not least your driving habits need to be fine-tuned. The little things matter more now and every detail has the potential to affect your bottom line. Changing from A Company Driver to An Owner-Operator Truck Driver Create a business plan Creating a business plan is one of the most important steps you will take as a successful owner-operator. The plan you create serves as a financial road map that allows you to track your income and expenses over time. When you know your operating cost per mile, you are able to calculate how many miles you need to drive each week to cover your expenses in order to break even. This is known as your breakeven point, the point where your business expenses along with your personal expenses are covered and every mile driven over that point puts money in your pocket. Change your mindset Too many drivers try to make the transition from being a company driver to an owner-operator and fail to run their truck like a business. These drivers are caught in the “company driver mindset.” They think they are just a truck driver and as long as they drive the miles everything will be alright. Operating from the mindset of a business owner means recognizing the challenges you may encounter and having a plan in place to handle them. Saving receipts and tracking every expense, sending in quarterly estimated tax payments, and planning ahead for potential events such as weather, breakdowns, and tires are just some of the obstacles you may need to plan for. Someone can be business minded with excellent intentions, but without a plan of how to execute your intentions, you are setting yourself up to fail. Create good habits Don’t judge the performance of your business by the size of your settlement check. There are always ways to improve your business’s performance. Changing some habits might put more money in your pocket while running the same amount of miles. Try sacrificing a few MPH for RPMs. In other words, slow down and ease off the fuel pedal to maximize your fuel efficiency. You now pay for fuel, and slowing down just might put some cash back in your pocket. Driving slower also means less wear and tear on your tractor. Take the time to do a really good pre-trip and post trip evaluation of your tractor trailer. The sooner you notice a problem that can be fixed, you can prevent a bigger breakdown later on. This will help to minimize down time, and avoid more extensive maintenance expenses. If you check things thoroughly and regularly, you can schedule repairs during home time and save your drive hours to be on the road and not waiting in the shop. Change happens slowly but surely The transition from company driver to owner-operator is not something that happens overnight. As an owner-operator your primary goal is to make more money. With a business plan in place you can make educated business decisions based on numbers. You’re going to have a lot more expenses and accounting for them will only help plan for the difficult times. Knowing your expenses, being business minded, and practicing good daily driving habits will allow you to create a solid foundation on which to build your business as a successful owner-operator.

This article was originally featured on TeamRunSmart.com. Friday, October 30th was supposed to be judgment day, but it came and passed with no word. On October 30th the Final Rule to mandate the installation and use of electronic logging devices by truck drivers, championed by the Federal Motor Carrier Safety Administration, was supposed to be published. Instead the rule got hung up at the White House’s Office of Management and Budget. On November 17th the rule was cleared, and on December 11th the mandate was officially published in the Federal Register. Why is this ruling so important? Over 3.1 million vehicles across the country will need to be equipped with electronic logging devices to electronically log Hours of Service (HOS) by December 16, 2017. In 2012 the law, Moving Ahead for Progress in the 21st Century Act (MAP-21), was put into effect to help the Federal Motor Carrier Safety Administration (FMCSA) reduce crashes, injuries, and fatalities involving large trucks and buses. Along with multiple enhanced safety standards, the law included a provision calling the FMCSA to develop a new rule requiring commercial motor vehicles to use electronic logging devices (ELD) to record HOS. On October 30th the FMCSA was supposed to announce the final rule about the new mandate. While fleet owners and drivers are still awaiting the final decision, you can still do some prep work to prepare for the new mandate. Changing from paper log books to an electronic logging system will take some time. The new mandate doesn’t affect everyone, but will most likely affect the trucking industry. According to the mandate as it is currently written, all commercial motor vehicles that weigh over 10,000 lbs. and/or vehicles transporting hazardous materials requiring placards are required to utilize an ELD. Compliance requires fleets to equip their vehicles with ELD and keep record of HOS logs for up to 6 months. Fleet owners and owner-operators have multiple options in ELD solutions making the new ruling easy to manage. Fleets that utilize integrated ELD solutions can monitor and keep electronic logs to ensure HOS compliance and give managers and drivers the ability to proof upon DOT inspections . ELD software can also help fleets and drivers reduce HOS violations and improve Compliance, Safety, Accountability (CSA) scores . While it will take some money and work to install an ELD into all commercial vehicles, there are many benefits with ELD Mandate: Receive real-time data: ELDs can send management electronic logs in real-time from anywhere in the country to ensure HOS compliance. Save money with insurance discounts: Insurance rates might go down by providing proof that a fleet or driver is HOS compliant. Reduce administration costs: Paying office staff or another company to manually audit paper logbooks is expensive. ELD systems can save money by reducing staff time and material resources spent on paper records. Improve dispatch processes: Dispatchers and managers can stay informed on drivers’ current HOS availability to better plan routes and logistics to ensure drivers don’t exceed their HOS threshold. Increase driver safety: ELD systems can help prevent tired drivers from getting behind the wheel and reduce accidents, injuries, and fatalities. Improve roadside inspections: Paper logbooks are a pain during roadside inspections, but ELD systems can help drivers quickly and accurately provide DOT or law enforcement officers with current HOS logs. Many fleets and owner-operators will be affected by the final ruling on the ELD mandate so keep your eye out for the final ruling over the following months. While it may seem like a lot of work and money to purchase these devices and switch to a new system, ELDs can help you reduce costs, reduce risks, and increase your overall revenue.

If you are thinking about becoming a lease-purchase owner-operator, there are a few things to consider before signing an agreement. Leasing a truck is a big commitment and you want to make sure you are entering into something that will work for the long term. In order to help make this decision a little easier, check out these things we suggest you know before signing a lease-purchase trucking agreement. Know what your monthly truck payments are going to be Leasing a truck through a carrier means you will commit to making monthly payments to the carrier in order to drive the truck. Carriers should clearly state how much the monthly payment is going to be and when you have to start making payments. If a carrier is not clearly stating the amount of the monthly payments, you should not sign an agreement with that carrier. Some carriers also offer different truck payment options depending on the truck model and age. Knowing how much you can afford each month is something you must understand before signing a lease purchase trucking agreement. It can also be one of the more important factors to determine which lease is right for you. Know how long the term is Another important thing to know about the lease-purchase trucking agreement is how long the term of the lease is. It is common for carriers to have lease terms between one and three years. After the term is up, you may have the option to start up another lease agreement with the carrier, or walk away. Some carriers may also provide the option to purchase the truck after the lease term is up with the monthly payments you have been making applied to the purchase price. A lease-purchase agreement is a contract between you and the carrier or the carrier finance subsidiary. Most carriers will not allow you to simply walk away from a lease-purchase agreement whenever you want. That means it may be difficult or costly to get out of an agreement before the term is up. This makes knowing the term of the lease agreement even more important. Know what costs will be covered by the company As a company driver, you are an employee of the carrier you pull for. This means they will cover the costs that come with driving a truck. As a lease-purchase owner-operator, you are the boss of your own trucking company. This means you will be responsible for the majority of the costs. However, some carriers will offer to cover a few of the costs in order to incentivize you to sign a lease-purchase trucking agreement with them. One of the more common cost coverages you will see is a truck warranty. This coverage can save you from catastrophic maintenance costs so it's important to understand what is covered. Some of the other costs that may be covered by your carrier are license and permit fees, Federal Highway Use Tax (FHUT), Qualcomm fees, trailer fees, and cargo insurance fees. There are many costs associated with being an owner-operator, so any costs that are covered by the carrier are helpful. Know what kind of truck you will be leasing The variety of trucks you have to choose from differs from carrier to carrier. Some will offer new trucks while others will offer three to four year old trucks. Many carriers offer only one brand and model of a truck while others offer two or three. Aside from spending most of your time in the truck, knowing what kind of truck you will be leasing is important for two reasons. If you are leasing a truck that is older, the cost of maintenance will typically be higher. The other reason is if your goal at the end of the lease is to purchase the truck, you won’t want to purchase an older truck that will cost more to maintain and upgrade. These are just two of the more important reasons for why you should know what kind of truck you will be leasing. Ready to sign a lease-purchase trucking agreement? Hopefully, you find this information valuable when deciding which carrier you want to lease a truck with. These are all things that are very important for you to know before signing any contract or agreement. If you have any questions or concerns about signing a lease-purchase trucking agreement, feel free to give us a call at (888) 640-4829.

For any business, the formula for increasing profits is pretty simple - you’ve got to maximize your revenue and minimize your costs. And while it’s important to maximize your revenue, managing costs can have an even bigger impact on your profitability, here’s why. ATBS’ data shows that the average owner-operator has a profit margin of 44%. That means if you generate $1.00 in revenue, only $0.44 goes into your pocket as profit. However, if you reduce your costs by $1.00, one hundred percent of that $1.00 goes into your pocket as profit. That’s why managing costs is so important. On the cost side, there are two kinds of costs: Fixed Costs (FC), and Variable Costs (VC). The easiest way to think about these costs for owner-operators is to remember that fixed costs are the expenses you pay regardless of whether your truck is moving or parked i.e. truck payments, insurance, FHUT, etc. And variable costs are the expenses that you only have to pay when your truck moves i.e. maintenance, fuel, etc. The single biggest expense for owner-operators is fuel, and how you choose to manage fuel can have a major impact on your profitability and your quality of life. To understand the impact of fuel, we begin with some of ATBS’ exclusive industry data. In 2021, the average owner-operator worked 240 days, drove 95,763 miles, and made $0.74/mile in profit. In addition, the average VC (not including fuel) was $0.15/mile, and the current average cost of diesel fuel is $4.85/gallon. Using these numbers, if your truck averaged 6.5 mpg, you would spend $71,454 on fuel for the year. Here’s how the math works: (95,763 mi ÷ 6.5 mpg) x $4.85/gal = $71,454. Likewise, if your truck averaged 7.5 mpg, you would spend $61,927 on fuel for the year. So the difference between 6.5 mpg and 7.5 mpg is equal to $9,527 ($71,454 - $61,927 = $9,527). And as we know, when you reduce costs, 100% of those cost savings go straight into your pocket as profit. The math gets more complicated, but here are a few different ways to think about all of this: *Improving your fuel economy from 6.5 mpg to 7.5 mpg improves your profit for the year by $9,527! *At 95,763 mi per year, $9,527 in profit is equivalent to a 10 cents per mile pay increase! *If you operate your truck at 7.5 mpg instead of 6.5 mpg, you can run 15,395 fewer miles per year and still make the exact same profit! *If you operate your truck at 7.5 mpg instead of 6.5 mpg, you can work 39 fewer days per year and still make the exact same profit! As you can see, managing your fuel economy and fuel costs can have a significant impact on both your profitability and your quality of life. We used 6.5 mpg and 7.5 mpg simply as examples. Regardless of where your current mpg is at, the more you improve it, the greater the impact! To read the previous article in the series, click here!

Nothing can dampen your day like a roadside inspection. They are a fact of life for owner-operators and independent drivers. A DOT truck inspection may seem like a nuisance, but it's important. Roadside inspections serve as an on-the-spot safety check-up for commercial motor vehicles and drivers. With new technology, inspections can happen practically anywhere along the highway, rural roadways, truck stops, and rest areas. So it’s best to be ready for them! There are several types of roadside inspections with the most common being conducted by Commercial Vehicle Safety Alliance (CVSA) and DOT-trained inspectors. The CVSA has six different levels of roadside inspections with varying degrees of detail. Level I is the most common and involves the examination of documents and a detailed vehicle inspection. It normally takes about 30 minutes to complete this type of inspection, which might seem like an eternity when you’re on a tight schedule. However, if you plan ahead and prepare, you’ll pass your roadside inspection with flying colors in no time! 1. Keep documents up-to-date and readily available A “typical” Level I inspection requires a review of your driver’s license, medical examiner’s certificate, driver’s record of duty status (log book), documentation of annual inspection, hazardous materials paperwork, and permit credentials. Your log book should be current to the last change of duty status, but inspectors might review up to seven days. Andy Blair , a DOT-certified inspector, suggests making your documents easy to inspect. Place all your documents in a binder or folder so the inspector can quickly go through everything at once. You’ll look organized and professional and will probably be on your way faster. 2. Be professional and courteous to your inspector This should go without saying, but attitude counts. Inspectors have the discretion to inspect who they like. If you make inappropriate or rude remarks you’ve probably just increased your chances of being chosen for an inspection. Inspectors don’t have quotas for handing out citations, but they do have to conduct a certain number of inspections each day. You’ll get picked someday. It’s just part of the job. Just smile and be polite to your inspector. 3. Keep your truck clean and know where everything is kept Your truck cab doesn’t have to be immaculate, but it should be relatively clean. If your truck cab looks like a mess then you’ve probably increased your chances of an inspection. When Blair sees a truck cab that just looks and smells bad, he thinks “This guy really doesn’t keep after things too well. The chances of me finding something wrong with the truck are probably better.” Keep things as tidy as you can while you’re on the road. You should also keep the outside of your truck in working order too. Inspectors will look at things like brakes, tires, windshield wipers and much more. Before each trip make sure you check your lights to ensure they are all in working order. Look at your tires for baldness or sidewall damage. Any tire damage is usually an invitation for a thorough inspection. Additionally, know where the fire extinguishers and emergency triangles are kept. 4. Be aware of the “Out-of-Service” criteria Out-of-service violations are serious and need to be addressed immediately. If you attempt to leave before an out-of-service situation has been fixed, you could face disqualification and large fines. Know the out-of-service criteria and check the items when you conduct your pre-trip check . Items include the brake system, coupling devices, frame, fuel system, tires, and many other items. Roadside inspections are part of the job. They can happen anytime and anywhere. Inspections may be annoying and time consuming, but are important to ensure your safety and the safety of others on the road. So instead of waiting until the next time you are stopped, start by cleaning your cab now, organizing your documents, and brushing up the out-of-service criteria. Be professional, polite, and smile and you’ll be on your way to passing your roadside inspection with flying colors! This article was originally featured on TeamRunSmart.com .