In trucking, an owner-operator is a small business owner self-employed commercial truck driver who operates his own vehicle to transport goods for its customers and, at the same time, runs the day-to-day operations of his own company on his own.
Owner-operators are independent contractors who can be their own boss and set their hours. They are free to select the loads they want to haul.
Most owner-operators start by working for a company
First, to gain experience, most owner-operators start as company drivers. After they get more confident with trucking operations, they decide to become small business owners.
Don't take lightly the decision of becoming an owner-operator. The owner-operator career path may include tasks related to business setup, accounting, the type of vehicle, licenses, permits, etc.
What do you need to become an owner-operator?
To become an owner-operator, a driver will need to obtain:
- A commercial driver’s license (CDL). A commercial driver’s license is required to operate large, heavy, or placarded hazardous material vehicles.
- USDOT number. The Federal Motor Carrier Safety Administration (FMCSA) assigns a unique identifier when collecting and monitoring a company's safety information.
- Motor carrier or MC number. The FMCSA’s operating authority to haul regulated commodities.
- Insurance. The FMCSA requires owner-operators with authority to have liability coverage.
Once owner-operators have the above requirements, they need to decide whether to buy or lease a truck based on the kind of business they want to operate.
They also need to start building a customer base, which is often the hardest part.
To alleviate the initial challenge of finding loads, drivers might join a load board to find loads to move.
Once a driver makes connections and builds their business and reputation, it becomes easier to find contracts and work independently.
Work options for owner-operators
When it comes to work, owner-operators have two options.
- First option, is to work under their own authority.
That means that they can search for loads through load boards and tracking apps and decide on their own which load they want to go with.
At the same time, owner-operators are responsible for each aspect of running their business from driving, to accounting, to safety, to administration, etc.
- Second option, is to work under another trucking company's authority.
In this case, owner-operators can lease their equipment to a larger trucking company, which will do most of the administrative work such as dispatching.
Also, the trucking company takes a small percentage from the gross of each load that the company finds them.
The company provides all permits necessary for operating, insurance, and even trailers.
In the case of running under a trucking company's authority, the company takes care of many things. The owner-operator, mostly, needs is stay safe on the road.
Owner-operator vs. company truck driver
There are many differences between an owner-operator vs a company driver. Check the link to see the entire list.