What is Best for You? Leasing On vs Independent Owner-Operator

December 18, 2021by DATLA LOGISTICS0

Starting Your Career as an Owner-Operator in the Logistics industry gives you a new sense of freedom and opens the road of untold opportunities and possibilities for you. Being an owner-operator, you have Your own Rig to haul quality loads and freights whenever and wherever you want. There are two popular ways of working as an owner-operator in the trucking industry: 1) Leasing on with a trucking industry or a carrier 2) working as an independent owner-operator under your own operating authority. Both these ways have some advantages and disadvantages. Which way is best for you depends on your business needs, goals, and preferences. However, to help you choose between them, we are discussing the advantages and disadvantages of leasing and an independent way of working as an owner-operator. So, let’s get started!

Working as an Independent Owner Operator under Your own Operating Authority

You’re an independent owner-operator when you run your trucking business under your own operating authority. It wouldn’t be wrong to say that you are an independent trucking company. Before discussing the advantages and disadvantages of working as an independent owner-operator, it is important that you have to get the operating authority from FMCSA (Federal Motor Carrier Safety Administration).

Advantages

– When You work independently, You’re Your Own Boss

Working under your own operating authority gives you complete control over your trucking business. You’ll be your own boss, and there would be no one to give you orders. When you get the operating authority from FMCSA, you will be an approved trucking company.

– High Profit

When you work as an independent owner-operator, you don’t have to share your profit with anyone; you’ll get 100% of your earnings. You can earn a high profit if you have a strong connection with shippers and brokers who can get you enough freight to keep you moving. However, you are likely to find shipments or loads on the load board. In any case, everything you earn will be yours.

Disadvantages

It might be strange for you to know that working as an independent owner-operator has more disadvantages than advantages.

– You’ll have to find loads

There will be no one to find loads for you when you work independently. You’ll have to develop connections with shippers and brokers to consistent freight and loads.

– The Operating Costs are high when you work independently

According to law, an owner-operator working under its own operating authority must carry liability insurance with a minimum coverage up to $750K, depending on the type of trucking equipment. You’ll also need other types of insurance like cargo insurance. When you work independently, you’ll have to pay more for tires and fuel.

– You have to manage Your back-end business operations

Trucking business back-office operations such as paperwork handling, billing, dispatching, IFTA reports, registration, brokers credits, and bookkeeping will complete your responsibility when working as an independent owner-operator. Hiring a good truck dispatching company can help you with all of your paperwork and dispatching.

Leasing on to the Authority of a Logistics Company or a Carrier

All disadvantages of working as an independent owner-operator are advantages of leasing with a logistics company. There are many logistics and trucking companies that lease owner-operators by offering a wide range of benefits and perks to them.

Advantages

– Low Operating Costs with continuous loads and freights

If you’re working as a leased owner-operator, finding loads and freights is not your headache anymore because it’s the responsibility of your leasing logistics company. The operating cost of running your business will be low because the handling of back-end operations and dispatch services are the responsibilities of the logistics company you lease with. All types of insurance are the responsibility of your leasing company.

– Fast Payout

While working for a trucking company, you will be paid on a weekly basis. Some logistics companies even offer daily payouts to their owner-operators.

– Steadfast back-office support

The logistics company takes care of billing and paperwork for you, so you can only focus on making deliveries. You will also be provided with fuel discounts on the go.

Disadvantages

  • The logistics company or carrier you lease with takes a share of your profit in exchange for providing you with all the support and dispatch services.
  • Leasing with a carrier offers less freedom and flexibility as compared to working as an independent owner-operator.

 

Datla Logistics is a truck dispatching and freight shipping company. If you’re looking for truck dispatching services or freight shipping, contact us today!

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Founded in 2018, DATLA LOGISTICS is a veteran-owned dynamic logistics company specializing in providing reliable, dependable, state-of-the-art advanced technology-based Freight Shipping and Dispatching Services nationwide.
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