Advice to new owner/operator

[JimT]

(Sorry, this will be long, but about as detailed as I can make it. I get asked these questions a lot and will probably refer people to this post in the future, since I usually refer them to this site anyway. Also, I'm not trying to brag in any way, just giving honest information accurate to the time of posting)

A little late to the party here, but I'm O/O (BCO) with Landstar and here's what I can tell you (nothing truly top secret here, but I do share some hard numbers):

100% owner-op, even the Agents (basically in-house exclusive brokers) are independent contractors so success is a mutual thing.

Revenue:
Tractor gets 65% of the linehaul, 100% fsc, tolls, tarping. There's other stuff, but that's the most common.

Trailers - Landstar only has company owned dryvans. All other trailers are either owned, rented or leased by the BCO. If you pull a company dryvan then theres no additional revenue there. If you have your own dryvan it gets 7% of the linehaul. Most other trailer types get 8% of linehaul. Company has other types of trailers available to rent, such as flatbeds and stepdecks. I've been paying $180 a week to rent a 2012 48x102 Fontaine Revolution52 all aluminum Flatbed directly from Landstar. They pay for 100% of all maintenance and repairs for the trailer, even trailer road service. Only real downside is I'm not supposed to work on or modify it. All-in-all the trailer generates several hundred per week in revenue above the cost of rental, so it works.

Plates/permits:
You can get your own or let them. My tractor is registered for 80k lbs and runs $1700 / year through Landstar. Permits are an additional $200 / year. These are deducted over a bunch of weeks (18 weeks i think) but can also be paid off in full by request.

ELD:
Buy it from Landstar or use one you already have if it's one of the approved systems. Currently you can choose between Keep Truckin or Omnitracks. Keep truckin is cheaper but you need to supply a phone or tablet for display. Omnitracks is one of those big monolithic units similar to peoplenet. Costs more but it's all inclusive. Personally and from talking to other drivers, I thing Keep Truckin is a much nicer solution and more driver friendly. I paired mine with a cheap samsung tablet that never leaves the truck. There is supposed to be a 3rd option coming soon, don't remember the name.

Also, there is a monthly $26 airtime charge for the ELD. Not sure if it's different for the omnitracks units.

Insurance:
These are my costs, purchased through Landstar. You can shop around and get your own as long as it meets their requirements. Your's will probably vary depending on your equipment, driving record, CSA score, state of residence and chosen options.
Monthly: $193.20 for Physical Damage
Weekly: $31.62 for Unladen Liability
Weekly: $31.38 for "Contractor Protection Plan" it's similar to a workers comp type of insurance and allowed instead by my state of residence.

Other:

$3.69 weekly for utilization of the Landstar network. That includes their website, loadboard and phone calls/push notifications/email load alerts.
They used to charge for electronically submitting trip mileage and some other stuff but they did away with that after the ELD's started tracking that for you.
They will handle fuel and mileage tax reporting for you unless you choose to do it yourself. No extra cost. Refunds or deductions for these appear on your settlements.

You need Hazmat and Tanker endorsements. You can sign on without them as long as you add it within 90 days, I think. Hazmat freight almost always pays higher then general freight and liquid in large totes (hazmat or not) falls under the tanker endorsement. TWIC is helpful if you plan on hauling out of ports (plenty of loads like that), but it's totally optional.

Escrow:

There is a $500 required escrow that is slowly deducted from settlements when you first start until $500 is reached. Honestly, I asked but forget what they actually might use this for, but if/when you part ways it is fully refunded. It also pays interest monthly.

There is a voluntary maintenance escrow available. I'm not part of it so I don't know any details.

All-in-all I average about $200-$300 per week in settlement deductions (including my flatbed rental) with permits/plates and tire purchases making it temporarily higher (more on tha below).

Money:

Landstar uses Comdata. All settlements are deposited to your comdata card weekly based on the day of the week you officially are hired. My day is Friday and by Noon the funds are available to do as I wish. Any BOL's completely submitted by Wednesday afternoon (2 days before your settlement day) will be paid out. I usually leave enough for about a weeks worth of fuel then deposit the rest to my business bank account. Comdata has small transaction fees such as $1.75 to load money onto the card (such as a pretrip advance and your settlement pay) and $1 for bank deposits. Haven't used any comchecks or cash advances so not such on the fees for them.

Dispatch:

This is all you. No one will ever tell you what to do or when to work. Work your butt off, schedule your next 5 loads in advance or just go home and park the truck for a couple months, it's all up to you. You search the load board, make the calls to agents and choose to take a load. Eventually you will build up connections with agents who will call you BEFORE they post something to the load board. These are the best loads. It took about 2 years before I found the right agent with the right loads for me, though I have a couple dozen agents for flatbed loads saved to my contact list that I will try before even looking at the load board. Most loads are direct customers, but there are plenty of agents who post loads from other brokers. While not usually ideal, these loads can be helpful if you find yourself in an area without good direct freight. The loadboard will often appear full of these broker loads - remember the best loads rarely ever get posted to the board and the ones that do are often booked pretty quickly, thus leaving the less desirable loads to sit on the board. Many guys see this and think that everything is crap when in reality they just don't know how to build relationships and sell their business.

Rates:

So, you want to know how much you'll make? Well, there's no easy answer here. Load board posts for brokered loads will typically fall around the DAT average for the area/lane. NOT usually the best freight. Direct customers will vary by contract. But, $3-$4/mi is typical. Once you establish yourself, make some good connections, you'll eventually find the good stuff paying $6-$14/mi, depending on the market and length of haul - shorter hauls typically have high rates per mile. For instance I did a 123mi run from CT into Brooklyn, NYC the other day, 1 stop, hazmat, no tarp, for $1900. I run flatbed but have talked to dryvan guys and gals seeing these rates as well. There's also a healthy heavy haul division that pays just as well as you might expect. I don't do heavy haul (oversize or overweight) so I can't say exactly where those rates average, but they're always higher then the same lanes for legal loads.

That's pretty much it. You do your thing, they pay for passing tractor and trailer DOT inspections every 120-days, submit a record of maintenance every 120-days, pay your 2290 every year, do the occasional random drug test, maintain your CDL and med card and drive safely and they basically leave you alone. If I park the truck for too long they sometimes call to see when I'm coming back since deductions are accruing weekly without revenue, but otherwise it's no-hassle.

Discounts:

TA/Petro offer by-far the biggest fuel discounts when paying with you comdata card. Supposedly Ambest also has good discounts by my experience has shown otherwise. Pilot and Loves discounts are so small they may as well not even exist.

While not strictly Landstar related, with the TA/Petro discounts I typically spend between $800-$1400 / week on fuel. All depends on # of fuel ups, current prices and number of miles that week. Typically I'll run 2,000-2,500 miles between PA and CT/MA/NH/RI/NY/NJ with tank mpg ranging 6.8 on the low end to 8.2 on the high end (about 7.6 average).

Tires can be purchased through Landstar's LCAPP program. Call ahead for approval and give the number to the participating (national tire account) service location and all the costs will be billed to LCAPP/Landstar then taken out as weekly deductions on you settlements. When I replaced my 8 drives over the winter I got m710's and m713's for like $350 to $370 each, then paid $200/week through settlement deduction.

Finally, this may or may not interest you, but Landstar has cross border operations. Both Canada and Mexico. They also have a full facility, I believe in Laredo, dedicated to cross border shipments. This has been a growing sector for the company and I don't see it slowing down under the current government administration. I've been down in Texas a few times and can tell you there is plenty of freight down there, but it also moves fast!

If you're looking to do power only then there are plenty of those loads, or you can pull a company dryvan. Or rent a flatbed or stepdeck and make more money. Lots of options to fit your style. I personally like being left alone to do my thing and that's what drew me to Landstar over other companies and it's why I'm planning to stay here for the foreseeable future.