What is an Independent Truck Driver?
What is an independent truck driver? To an extent, it depends on who you talk to. Unfortunately, some companies will describe an independent truck driver as an owner-operator and use the term interchangeably with their lease contractors. This practice has created some confusion regarding correctly classifying truck drivers.
What are the Differences Between Lease Contractors, Owner Operators and Independent Truck Drivers?
Take your pick of any mega-carrier fleet and you’ll find the terms owner-operator and independent truck driver misapplied to their lease contractors. These companies lease their trucks to drivers and keep them on a short leash. They use forced dispatch or give their contract drivers limited options for picking loads and give their contractors very little freedom with scheduling. A contractor’s revenue in this situation is on par with an employee or company driver after the company has applied a mountain of fees.
For terminology’s sake, this classification of driver is more accurately conveyed as “contractor or lease contractor.” The independent part is a mirage for drivers who become mired in this sort of contract as has been seen in the state of California and the legislation and legal issues surrounding this predatory practice. Opposite company drivers and lease contractors are the owner-operators and independent truck drivers.
Owner-operators lease or own their trucks and operate under their own DOT authority. An owner-operator is more than a truck driver. They are also a trucking company, even if it's one guy and his truck. All the paperwork, customer support, load sourcing, cash flow management, obtaining licensure and permits, paying for insurance, taxes, and more all fall on the shoulders of the owner-operator. That can be a lot for one person to juggle, and if one little thing goes wrong, it can spell disaster for the future of the owner-operator's business.
Independent Truck Driver
An independent truck driver leases their truck from a company like Ryder or Penske, or they are making payments on a truck they have purchased, but they do not operate under their own DOT authority. A trucking independent contractor typically signs on with a company like CloudTrucks, where they have the help and support of the company and their tools, assistance with insurance, and back-office paperwork. It’s a happy medium between the freedom of being an owner-operator and similar revenue but easier to manage since you’re not stuck out there handling everything yourself.
What is Different About Becoming an Independent Truck Driver?
Independent truck drivers differ from company drivers, lease contractors, and owner-operators in a few key areas:
Independent truck drivers contract with a trucking company or an owner-operator.
- Independent truck drivers obtain their trucks from third-party companies or truck dealerships instead of leasing a truck belonging to the company they are contracting with.
- Independent truck drivers have more responsibilities and are not entitled to the same benefits as employees (company drivers).
- They are free to make their schedule, choose their work, and pick their equipment (depending on the company they sign up with).
- An independent truck driver usually earns more than a company driver but less than an owner-operator.
- Independent truck drivers do not operate under their own DOT authority. Instead, they operate under the authority of companies like CloudTrucks.
- An independent truck driver is responsible for managing their time and finding loads. The level of responsibility and freedom to choose loads varies from company to company. For example, drivers who work with CloudTrucks have complete control over their load choices.
- The downside is that they may be responsible for certain expenses that are typically covered for employees, like fuel, repairs, insurance, etc.
- Independent truck drivers and owner-operators are operating a business and must manage their finances to keep their business healthy.
The entry requirements to switch from company driver or lease contractor to independent truck driver are less demanding than becoming an owner-operator.
The additional expenses and demands of working as an owner-operator include:
- Responsibility for obtaining their own authority to operate.
- Registration, filing, and payment of fuel taxes (like IFTA - note that each state has their own IFTA information on their State's .GOV website) and road taxes (like the Heavy Highway Vehicle Use Tax).
- Obtaining state permits.
- Paying for equipment and load insurance.
- License plates including IRP and apportioned plates.
- All truck and trailer expenses including repairs, towing, etc.
Becoming an independent truck driver can be a rewarding and enjoyable way to expand your driving career with many of the same truck driver benefits and fewer potential problems and office work that an owner-operator faces. So, what can an independent truck driver expect to earn?
Independent Truck Driver Salary Expectations
- The average annual salary for independent truck drivers is around $160,000, with top percentile earners making upwards of $300,000 (Source: Indeed).
- Company drivers and lease contractors are limited in their earnings by salary maximums set by trucking companies, while independent truck drivers are free of salary caps.
- Independent truck drivers are in total control of their earnings, making as little or as much as they want while avoiding some of the overhead costs and regulatory obstacles that come with being an owner-operator.
- Independent truck drivers are free from the predatory fee schedules used by companies that employ lease contractors.
Independent truck drivers at CloudTrucks enjoy the following perks:
- Load payouts are listed on every trip request.
- CloudTrucks believes in transparency, meaning you'll never be hit with hidden or unexpected fees.
- The most competitive rates in the industry allow you to keep more of your hard-earned revenue.
- CloudTrucks takes a smaller percentage at 18% per trip. This also covers your auto liability insurance and cargo insurance.
- Independent truck drivers operate under CloudTruck's authority eliminating the costly hassle of being an owner-operator.
- Instant payments upon proof of delivery at no additional costs.
- CloudTrucks takes care of the back-office paperwork so that you have more free time for other aspects of your business.
- The CloudTrucks Road to Independence program provides a path to truck ownership.
- Independent drivers can haul loads they find on their own or let CloudTrucks negotiate with brokers.
What to Consider Before Becoming an Independent Truck Driver?
Becoming an independent truck driver may seem like a daunting choice and it’s certainly not a decision to take lightly. You may find it helpful to evaluate the roles and responsibilities that come with being an independent truck driver and taking into consideration your financial goals, and family or life goals. You may also find it helpful to write out a list of pros and cons of becoming an independent truck driver.
Since we’ve already discussed many of the pros to becoming an independent truck driver, and the responsibilities, that leaves one important matter to discuss and that is the risk factor.
The primary risk associated with becoming an independent truck driver is financial risk. The early stage of your career as an independent driver is the most perilous. You’re starting out with the budget you have on hand and you’re no longer working for a company with deep pockets to cover unexpected events. Furthermore, the health of your company and your ability to remain in business rests entirely on your shoulders. So you have to ask yourself:
- What are my financial risk tolerances?
- Will I responsibly manage my finances?
- Will I be diligent in handling my paperwork?
Once you determine your risk tolerance, and if your answer is yes to the other two questions, then you are in pretty good shape for moving in the direction of becoming an independent driver. However, if you have concerns about how well you’ll manage your finances, or if dealing with the paperwork seems like too much of a hassle, becoming an independent truck driver may not be as desirable under those present circumstances.
How to Find Loads as an Independent Truck Driver
We wrote an in-depth article on finding truck loads with lots of information so, here we’ll summarize the main points. Independent truck drivers have three primary ways to find loads:
1. Through a load broker
Load brokers gained a foothold in trucking after the industry was deregulated in 1980 (Source: Freight Broker Training HQ). Forty-one years later, this facet of the trucking industry is beginning to show its age as a way for independent truck drivers to find loads. Technological advances over the past twenty years, like wireless internet, smartphones, and apps, have opened up new possibilities for drivers to find loads. With better options available today, the majority of owner-operators recommend avoiding these aging relics of a bygone era.
- Load brokers charge 25% - 35% or more per load, taking a large chunk of a driver’s revenue (Source: Indeed).
- The driver is still responsible for obtaining all licenses, permits, fees, and taxes.
- Going through a load broker is notoriously inefficient. Delays in negotiating with brokers can range from a few crucial hours to a day or more and come with hefty fees.
2. Freight overflow from local trucking companies
When freight is slow, some independent drivers attempt to catch loads by taking on overflow from larger trucking companies. This method is very hit and miss and drivers are left with taking whatever they can get their hands on if they’re lucky. Additionally, the trucking company will take a cut of the load and the driver is still left to fend for themselves when it comes to DOT authority, licenses, permits, taxes, etc.
The driver has to devote significant time to developing relationships with local trucking companies.
- Ask for any freight overflow they may have and hope for the best.
- You have no control over where you’re going because you’re taking what you can get.
- Finding loads this way is hit-and-miss and unsustainable in the long run.
3. CloudTrucks App
CloudTrucks is a technological leap forward that makes finding loads more efficient. The app enables independent truck drivers to secure consistent loads at better rates. Plus, CloudTrucks uses transparent pricing so the rate you see is the rate you’re paid on every load.
- Leverages cutting-edge technology in the driver’s favor.
- Browse available loads 24/7 and pick the loads you want.
- Run how you want, when you want - guaranteed no force dispatching.
- CloudTrucks provides 24/7 support, DOT authority, fuel and maintenance discount programs, instant payments, and other perks helping you save time and maximize revenue.
The old ways of finding loads, like going through a broker or hoping for freight overflow from other trucking companies, are no longer an independent truck driver's only options. Today's drivers can leverage technology with apps like CloudTrucks to efficiently locate their next load at a better rate.
How to Become an Independent Truck Driver
In 2022, having a successful career as an independent truck driver will demand a combination of business sense, industry expertise, and a solid work ethic. Truck owner-operators must first have a thorough awareness of the trends influencing the transportation industry. In order to establish themselves as a dependable and trustworthy provider of trucking services, they will need to be proactive in their networking and marketing efforts.
CloudTrucks makes it easier for you. We are dedicated to empowering drivers who are ready to step into the future of trucking. Once you’ve decided that you’re ready for independence and to put your driving career in the fast lane, head over to our Getting Started page today. It’s that simple.