Starting Your Trucking Authority vs. Leasing Your Truck to Another Company

Written By Enis Mahmutovic

When diving into the trucking business, every owner-operator's critical decision is whether to start their own trucking authority or lease their truck to an established company. While owning your authority might seem like it offers more freedom and higher profits, the numbers often tell a different story. Here’s a detailed look at the costs involved and why leasing your truck might just save you a ton of money, especially with a company like Usora Express.

The Costs of Starting Your Own Trucking Authority

Starting your own trucking authority is neither simple nor cheap. There are numerous costs to consider, both one-time and annual. Let’s break it down:

First, you’ll need to form an LLC, which can cost anywhere from $50 to $500. Then there’s getting a Federal Employer Identification Number (FEIN) which, thankfully, is free. However, that’s where the freebies end. You’ll need to register with the FMCSA, which costs $300, and complete a BOC-3 filing for another $50.

One of the biggest expenses is insurance. Depending on your driving record and other factors, insurance can cost between $10,000 to $50,000 annually. And don’t forget the down payment, which can range from $2,000 to $10,000.

Then there are smaller but essential expenses like drug testing (up to $300 a year), electronic logging devices (ELDs) which cost about $30 to $50 per month per truck, and subscriptions to load boards like DAT, costing around $180 per month.

You’ll also need to factor in the costs for fuel cards, dispatching services if you can’t find loads yourself, clearinghouse queries, and the maintenance of driver qualification (DQ) folders. And let’s not forget about IFTA licenses and taxes, permits for different states, and fines, which can range from $0 to $2,000 annually.

Keep in mind most brokers will not want to work with your new authority for the first 6 months up to a year. This can be very hard in already low paying trucking market.

Ongoing Annual Costs

Assuming your trucking company brings in about $200,000 in revenue, here are some rough annual costs:

  • Insurance: $30,000

  • Factoring fees: $6,000 (2-3% of revenue)

  • Drug consortium: $450

  • ELDs: $480

  • DAT subscription: $2,160

  • UCR fees: $37

  • Clearinghouse queries: $1.50

  • IFTA taxes: $1,200

  • Permits for NY, KY, OR, NM, CT: up to $1,000

This brings the total to approximately $41,328.50 annually, not including additional costs like dispatching fees, fines, or the risk of brokers not paying.

The Perks of Leasing Your Truck

Now, let’s talk about leasing your truck to another company. It’s not just about sidestepping those massive expenses; it’s also about simplifying your life. When you lease onto a reputable company, they handle most of the headaches: insurance, permits, drug testing, and even finding loads. You get to focus on what you do best – driving.

Why Lease to Usora Express?

Leasing your truck to Usora Express can significantly reduce your out-of-pocket expenses and simplify your operations. Here’s the cost breakdown:

  • Dispatch fee: 12% of revenue = $24,000

  • Insurance, IFTA, ELDs, Permits, and other administrative costs: $15,600

  • Total annual cost: $39,600

Compared to the $41,328.50 you’d spend running your own authority (not including other potential costs), leasing to Usora Express saves you money and spares you the administrative burden.

If you’re an owner-operator looking to maximize your profits while minimizing stress, consider leasing your truck to Usora Express. With their competitive dispatch fees and comprehensive support, you can focus on driving and leave the rest to the professionals. Don’t let the complexities and costs of running your own authority weigh you down. Make the smart move today and start your journey with Usora Express.

The Bottom Line

Sure, starting your own trucking authority offers the allure of independence and higher potential profits, but the financial and administrative burdens can be overwhelming. On the flip side, leasing your truck to an established company like Usora Express can save you a significant amount of money and stress, allowing you to focus on the road ahead. It’s not just about the dollars and cents; it’s about peace of mind and stability in an industry that’s as unpredictable as it is essential.

When weighing the costs and benefits, leasing your truck to Usora Express often emerges as the more economical and less stressful option. You avoid the steep upfront costs and ongoing headaches of managing your own authority, all while still reaping the rewards of the trucking industry.

Enis Mahmutovic