Working in the trucking industry you tend to meet a lot of semi drivers. The other day it occurred to me whether a lot of these drivers are employed or actually independent contractors. I decided to dive in and find out.

Are Truck Drivers Independent Contractors? Turns out according to Globecon, that 350,000 truck drivers or about 9% are referred to as “owner-operators”. These drivers average an annual salary of $50,000 dollars.

Thanks to the ALA (Alltrucking.com) we know there are 3.5 million truck drivers driving in the United States. With that number in mind why are only 9% of drivers independent? Let’s break it down.

What Does It Take to Be an Independent Contractor?

Going back to the article from Globecon, there is some great information on this. The decision to become an owner-operator could lie in several factors, one being the value. Independent drivers can earn a substantial income striking out on their own.

Gong independent however can have its drawbacks as well. When a driver makes the decision he is also deciding to own and operate that semi, to repair it whenever it needs, and to provide routine maintenance.

Weighing the drawbacks however to the advantages even I could get on board with owning my own “big rig”. Owner-operators set their own hours, their own routes. They decide when to take breaks and where they park at night, or day depending on their schedules. Drivers also pick their loads which would be a nice little perk.

Earning Potential

From experience I know when owner operators are down they are losing money. At one point in time in our own repair shop, a driver reported losing up to $5,000 dollars a day due to his truck not being able to move. On the other side of this spectrum $5,000 dollars a day turns into 1.2 million in a year! All for traveling the country.

That is some serious dough independent drivers can bring in, but that also means a whole lot of time spent away from home. Now drivers that have decided not to settle down yet could most certainly make this a perfectly good lifestyle. Driver’s with families, however, tend to make a lot less, so they can be home every so often.

A lot of times drivers will run two to three weeks at a time and then spend about a week home, depending on their schedules or the loads that are available. I know this because we take care of a lot of family-minded drivers and when their truck is getting worked on some of the time could be while there home.

Independent Contractor and Mechanic?

Being an owner-operator, however, could also mean being your own mechanic as well. Quite a few drivers learn to turn wrenches themselves to minimize maintenance fees while on the road. Doing their own preventive maintenance could save themselves hundreds of dollars a year.

Even more expensive repairs could be saved by buying their own parts and replacing themselves as well.

Labor rates at most dealerships and repair shops are usually high, not to mention the costs of a possible:

Hotel
Food
Entertainment

And whatever else they may need while waiting for the repairs to be done.

Driving for yourself seems like it has its pros and cons just like every other job out there. Compared to a regular 9-5 however, the peacefulness of driving in a big ole semi may seem nice to some. Companies themselves are also able to cash in on benefits to owner-operators, next we’ll take a look at how that is so.

Companies Hiring Independent Drivers

Owner Operators can be a big advantage to companies as well. Hiring an independent contractor rather than hiring employees really can cut down on the bottom line. Just as there are costs to be an independent contractor all those costs can fall on to the company if they hire as a fleet.

It is advantageous for a company to go ahead and hire independent contractors for several reasons;

Lower payroll, by not employing so many drivers they can just worry about a one and done payment
Due to the driver being an owner-operator no maintenance costs or fuel costs. Everything is the driver’s responsibilities

Once the contract is complete it’s done. Both sides can part ways
Companies look good to their end customers, while also promoting themselves and the driver
Companies would only need to ensure the load being carried not the driver

In some cases, the company may not even need to find a trailer to haul their goods as the driver may own that as well.

Looking at the advantages is good but how could an independent contractor negatively impact a company? Here are some listed below.

A driver could be irresponsible or procrastinate potentially making the load late

In the event, there is an accident the load may be completely totaled as well
Companies have no control over where or how the load gets there once it leaves the terminal
Payscale may be higher due to owner-operators rates

Company may receive bad reviews if the owner-operator doesn’t perform to expectations
The driver may not care for his truck as well or have a truck that is less than roadworthy causing potential downtime

As you can see there could be benefits and downsides to both sides. Owner-operators, in general, are operating a business themselves so in most cases will hold a higher standard, but with that comes a higher cost. At the same time however, not every owner or independent contractor may share the same ideals, which could lead to problems down the line.

Looking Out For Yourself

Companies themselves should use and access all the available resources they can to determine if an independent contractor is worth the expenses it could create. Determining driving record, previous track record, and how their business is run could be the deciding factor between outsourcing their deliveries or hiring a fleet. Some companies may give owners a chance while others want to keep a tighter grip on the rules.

It is also up to the driver to see if the company is reputable as well. Determine if they have good loading times. Also, investigate their background if they are forgiving in the unforeseen happens? What are the contingencies they have in place, as well as what sort of budgets do they have established to pay independent contractors? The company could also be a risk to drive for depending on how it is run.

Both companies and drivers can protect themselves by having clear conversations on what is expected and what won’t be tolerated. It is both sides responsibility to be sure it is a good fit for them and their needs. Through networking and a little research, both can have a happy and successful business relationship. Moving on we can see how these independent contractors actually find that work.

How Do Independent Drivers Find Work?

A quick google search reveals there is no shortage of jobs for the independent driver. With the wealth of knowledge the internet brings, even drivers on the road can find their next job. Sometimes even before they are done with the first.

Websites such as:

ZipRecruiter

Indeed
GlassDoor

All these websites have many options for the owner-operator. Savvy drivers can connect different deliveries and pickups all in the same region, perhaps even in the same town! Now that’s some convenient workloads.

As an independent contractor, you set your own routes and you are your own dispatch. Keeping an eye on similar loads, and routes could yield to guaranteed loads no matter where you’re going. Good planning and record-keeping could really boost profits.

Benefits of Independent Truckers

Companies that like the work owner-operators do or vice versa tend to remember them. Contractors could continue to get offers from companies many times over due to good work, and on-time delivery. This allows some drivers to stay in certain areas. Such as around home so they can maximize their professional and family life.

For other drivers, this could also mean traveling the country and seeing all the great things there are to see. Going from coast to coast enjoying many different cultures, and sceneries. Choosing to go international by driving to Mexico, or Canada. As well as driving all the way up to Alaska where trucking could be even more profitable.

Finding work is not the only thing to keep in mind. Being independent means other costs and maintenance associated with it. Beyond just getting a CDL, let’s look at what could be needed.

Costs and Maintenance

As we have already mentioned being an independent contractor doesn’t come without some costs. Like any business, these must be considered prior to strike out on their own. Let’s break down just a basic overview of what drivers could expect.

Looking at information collected from KeepTruckin here’s what a driver could expect. Anywhere from $6,000 to 15,000 in initial start up costs depending on the equipment used. That includes being legal and paying your taxes. Later in the article mentions what semi you decide to buy. Whether it be used, or new is a personal choice but could cost far more than $100,000 dollars.

Other Certifications

Drivers choosing to haul other things could also have additional costs to them as well. For example according to PAM Transport getting your hazmat endorsement could cost around $100 bucks. However having this endorsement could provide great paybacks as the loads your able to take increase. As well as the amount you can charge to haul said loads.

There are other endorsements, certifications, and even trainings that one could invest in themselves for. With each one your driving abilities and what you can/can’t do will effect everything in the business. Heavy research will help decide if the return on the investment will be worth it for such qualifications.

All of this could be some serious dough spent towards your business. Taking into account how much you could make however definitely could help you make all that money back. Whatever your goals and passions are in the end could make it all worth it.

Additional Costs

Other costs to consider is maintenance. Such as oil changes, tire changes, if something breaks, a/c and heat, as well as any number of things. Personally in our shop alone I have seen an A/C repair job cost right around $5,000 not counting any other repairs and such.

Below I will include a table of estimates on some repairs and their costs.

Diesel Fuel	$3.28 per gallon	$328 dollars per 100 gallons
Tires	$300 to $1200 per tire	Full set at $500 each = $5000
Oil Change	$100 to $150 depending on labor and filter preferences	Every 25,000 miles, 2 times a year = $300
Truck Lease	$2,000	Due every month $24,000 per year
Average Labor Rates	$80 to $100 dollars per hour	10 hour job = $800 to $1000 not including parts, shop supplies, and other taxes

As the table above indicates there can be some serious costs to being an independent driver. These are just a few basic costs as well not encompassing all that could be needed over the life of the truck itself. Drivers deciding to strike out on their own need to be aware of such costs and how they could affect their bottom line.

Alternatively, drivers who go the route of buying a brand new truck may have the help of a warranty become a factor. A lot of repairs and maintenance could be covered under warranties saving drivers tons of money due to the repairs being covered. Unfortunately, however, even if it is a warranty problem typically as long as the truck is not moving, drivers are not making any money.

Summary of the Advantages and Disadvantages of Being an Independent Driver:

Having already touched on a few benefits to being an independent contractor, lets see an all inclusive list that might appeal to drivers still out there:

Setting your own hours, getting to drive when you want.

Choosing your destinations, whether it be coastlines, or mountains
Higher earning potential
Owning your own semi, and designing it

Choosing what you haul
Whether you want a companion to come along
Knowing your own maintenance and repairs

Always having a place to sleep
Various tax benefits for both the driver and companies
Being able to choose your equip, which could also be safer

Disadvantages of being an Independent contractor;

Costs of maintenance and repairs could run high
Long hours and days away from home

All paperwork and documents fall onto you
Running your own business you must be familiar with laws and regulations beyond having the proper licenses
Any accidents directly affect you and your insurance

May have to make repairs on your downtime rather then seeing family
Unknown circumstances that could rise up and greater stress

Advantages of being a company driver

Equipment is leased to the company and any and all repairs are their responsibilities
Once the truck is parked at the terminal and keys pulled jobs done for the day
Clear routes and deliveries consistently

Little to no paperwork as everything is handled with the company
Guaranteed wages payed on a regular basis
Freetime or off time is all yours to choose what you want to do

Your job will always be there, as well as being able to leave anytime due to no contracts other then being employed
Next to no start up costs, other then proper licences such as CDL, etc

Disadvantages of being a company driver

No choices, wherever the company sends you is where you go
Typically lower wages as your paid per mile
Less home time companies can also schedule long routes farther from home

Could be forced to team with another driver, while you drive he/she sleeps so the truck is constantly moving
Strict companion rules, some companies not allowing any other passengers at all.
At the end of the day your an employee, your boss could be difficult to deal with, other employees as well.

Companies carry reputations for the types of drivers they higher, some of them have a history of hiring inexperienced drivers which overall could reflect poorly on you

There are two sides to every story. Pros, cons, and everything in between. No matter what ventures you go on doing your own research can pay dividends far past any dollar amount. Smart-Trucking has a lot more details and even more great information, as well as more detail on the above points for drivers trying to decide. As well as many more resources that are out there.

Conclusion

With a budding professional driving industry, it seems there are plenty of opportunities out there for everyone. Drivers signing up to be independent contractors could really make some serious cash. Drivers choosing to work for fleets could benefit from fewer concerns. Being aware of some of the pitfalls however, would be a wise decision. Either way, both independent drivers and employed ones keep America moving.

Are Truck Drivers Independent Contractors