In The News

5 Owner Operator Mistakes to Avoid

With increasing demand for expedited trucking in recent years, savvy owner operators are poised to take their business to a higher level. Yet, with long sit times between loads, extended stretches away from home, and volatile income from week to week, just one mistake can sink your dream as an expediter.

So, how can you keep your business on the road to success?


 
Veteran expediters Linda and Bob Caffee recommend that owner operators avoid these five mistakes.

1. Purchasing a truck your business can’t support.

“If it’s your first expedite truck purchase, don’t buy a castle,” says Linda. “You need to learn expediting first. And to do that, get a vehicle you can afford because you're going to make mistakes when you first start. There’s always a learning curve.”

She recommends calculating your expenses before choosing a truck. “You have to realize that the price of your vehicle does not set freight rates. You have to figure out what the freight rates are and how much you can make per month. Then you can determine how much truck you can afford,” says Linda.  

2. Purchasing a truck that does not fit a carrier.

“We tell people to get qualified with a carrier and then go look for a truck,” says Bob. “Not all carriers have the same requirements for the truck – the equipment you carry, whether to go with a reefer (refrigerated body) or dry freight body, liftgate specifications, and that kind of thing. Changing options here and there could change the price of the truck as much as $20,000.”

3. Spending the paycheck as soon as you get it.

Being an owner operator is about running a business, and there is no guaranteed paycheck.

“The money in expediting is very volatile. You can make several thousand dollars one week and the next week only make a hundred dollars. Don't spend all that you make; put it away,” says Linda.

How do you hold yourself in check?

One approach is to set aside money each week for maintenance costs. “It's generally recommended in the industry that if you buy a new truck, take 4 cents per mile for every mile you run and put it in a savings account for maintenance. If you buy a used truck, that could be 8 to 10 cents,” Bob advises. “That's something a lot of people don't think about. They think, ‘I just got a $6,000 paycheck,’ and they go out and buy a boat. But if you don't have money in an account that you can access to pay for maintenance and other expenses to keep your business going, you’re taking a huge financial risk.”

4. Squandering home time.

As an expediter, you’re often spending long stretches of time away from home. So, the natural inclination for owner operators is to use home time as “off time.” But this can be a costly mistake, says Linda.

“Plan to use your home time to take care of things about your business that are hard to do while on the road, such as maintenance on your truck,” says Linda. “A lot of times you go from being a driver to an owner operator. And when a driver goes home, they get to go home. But as an owner operator, that is a luxury we don't have. Our truck is our income. And, as such, our truck has to be taken care of first. It’s part of your business. And your business does not have an off time. Just because you go home doesn't mean your business quits.”

5. Fuel-wasting driving habits.

According to fueleconomy.gov, aggressive driving – such as speeding, rapid acceleration and harsh braking – reduces fuel efficiency by as much as 33 percent at highway speeds and 5 percent around town. These are all driving habits that owner operators can control … and improve.

Linda’s tips: “Don't drive your truck like you stole it. Drive it for fuel mileage. Drive slower. Drive like you have an egg under your foot. Don't idle.”

Says Bob: “When you're leaving a light or stop sign, don't make it a drag race to the next one. Even when these trucks are empty, it takes a lot of fuel to get them rolling.”

Since fuel is your biggest expense, your driving habits directly impact your profit potential.

The Bottom Line

While expedited trucking can be a lucrative business for owner operators, there’s also very little margin for error. Improve your odds for long-term success by avoiding these five mistakes.