May 18, 20184 Comments

What do truck drivers need to have in their permit folder?

Whether we call it a permit book, a paperwork binder or a document folder you keep one in your truck. Have you had an inspection turn south because of missing paperwork? We know we have! We sat down and made this list of what truck drivers need in their permit folder.

MC Authority

It shows your company's registration with the DOT and authorizes you to transport freight. It lists your company name and motor carrier number.

Certificate of Insurance 

The title says it all. It lists your insurance company and policy numbers along with contacts for your agent. Keep in mind there are several policies on the same sheet. They might have different expiration dates, so be sure to check them all.

Truck registration

Lists your rig’s VIN, license plate, make and model as well as info on the registered owner. States issues IRP registrations annually, and they can be valid for single or multiple states. Just like with insurance, expiration dates are critical.

Annual inspection

Certified mechanics fill out these checklists. They confirm your equipment is operational and defect free. Annual means dates are important. Check for expiration. Yearly inspection stickers go on the side of your truck, but you also need the paper from inside your binder.

Lease agreement 

If you are an owner operator or drive a truck not registered under your company’s name, you need a lease agreement. These vary between a single page and multipage contracts. It's a document listing equipment ownership and lease terms.

IFTA

You need both stickers and a cab card. Both need annual updates and show company information and expiration dates. IFTA stickers change colors annually making it easy to spot outdated ones

Oregon permit 

While most states can check permit status by running your VIN, Oregon requires you to carry a paper copy in your truck. Kentucky and New Mexico no longer need hard copies and New York states now issue stickers. You can read more on the ODOT website.

ELD instructions 

Written instructions on how to operate your electronic logging device. The DOT mandates these have to be kept inside your truck and presented during an inspection.

Backup paper logs 

Again, mandated by the DOT in case of ELD failure. You need at least one week’s worth of driver logs or minimum of seven sheets. 

Hazmat permits

If your company is transporting Hazmat materials, you need to have the proper permits. For non-high-risk shipments, you need an FMCSA hazmat permit that certifies your company has the appropriate endorsements. These permits have expiration dates and can be valid for single or multiple years. In addition to the federal licensing requirements, individual states require separate hazmat permits. These states are Colorado, California, Idaho, West Virginia, Nevada, Oklahoma and Michigan (the last four share a single license). 

Read our guide to hazmat trucking

 

While truck drivers need trailer registration and annual inspections during DOT inspections, we advise against keeping them inside the cab. These go inside a box mounted on the nose of the trailer. We know drivers opt to keep them inside the cab for easy access, but this leads to problems. If you swap trailers, this paperwork stays with you and hence leaves the other driver without documents.

An excellent tip to keep your papers organized is a ringed binder with clear plastic sleeves. It will protects against rips and spills and keeps things within reach.

May 4, 20181 Comment

Different truck insurance explained

4 types of insurance associated with owning an eighteen-wheeler

Owner operators are asking us to have truck insurance explained and what are the charges.

 We found out that many owner operators who want to lease with us, don’t know how different types of insurance coverage work. There are four main types of insurance that trucking companies and owner operators should be familiar with.

Liability Insurance

This is the most important from a legal standpoint. Without it, a trucking company cannot legally haul freight on public highways, making the company MC (motor carrier number) unusable.

As the name implies this type of insurance covers liability in a potential accident. When drivers with bad records apply for work, it is this type of insurance that prohibits the company from hiring them. From their standpoint, putting unsafe drivers in the truck is too big of a liability and the risk of potential accidents with such drivers is too high. Once denied coverage it is illegal to put these unapproved drivers behind the wheel.

Liability insurance covers only the accidents that happen under dispatch. These are during the normal work of the truck. Auto-liability insurance does not cover little personal trips.

The price varies among carriers, but for the most part starts at $500 per month and goes up, depending on the safety profile of the company. We, at Logiflex, implemented eLogs 2 years ago, which resulted in a significant revenue cut (you know paper logs are more “elastic”), but our safety scores improved dramatically and our claims decreased. I will get into more detail about the pros and cons of eLogs in a future post.

In a nutshell, when it comes to liability insurance,the safer the company the lower the premium.

Physical Damage

Covers the damages on the insured equipment. If we have an example with insured bobtail and uninsured trailer. In a potential accident the insurance company will pay for the first without covering the second.

The formula, calculated as percentage of the value for which the equipment is insured, is as follows: truck value x (policy percentage) / 12 = monthly physical damage payment. If we put in some numbers it would look like this: truck valued for $50,000 with insurance rate of 3%, in the formula, we get 50,000 x 0.03 / 12 = $125 monthly payment. Sometimes the driver can bargain a lower percentage. There are plans where you pay 25% upfront and the rest of the amount splits in 9 equal payments. Not paying anything in the last three months.

Some drivers are tempted to insure their equipment for a price higher than the actual value, so in case of a total loss accident they get more money than the truck is worth. Don’t do that!!! Insurance companies would only pay for the market value of the equipment.(You know when something happens with the batteries and the truck burns down). On the other hand, if the value of the truck on the policy is below market value, the insurance company will only use the reported value amount instead the actual market value amount.

Cargo Coverage 

As the name implies, this type of insurance covers the cargo that is transported in the trailer. It is usually very cheap — about $50–100 a month. If you are an owner operator who leases to Chicagoland carrier, most likely you know $700-900 “cargo” insurance per month(or $170 or so per week).

The lingo name of this truck is "bobtail". If it hits one of the surrounding cars, the claim will go under Bobtail Liability policies. Dispatcher did not authorized the driver to take it to that parking lot.

Bobtail Liability

When owner operators purchase physical damage insurance, they are also asked to add bobtail liability coverage. It usually costs just a few dollars per month. It covers potential accidents when the driver is using the truck as a personal vehicle. Example would be  driving bobtail to and from movie theater, buying groceries, etc.

Many trucking companies would require owner operators to show proof of such coverage before leasing with them. This way carriers protect their liability policy from potential claims that would happen during non-dispatched driving.

There you have it - truck insurance explained. For all documents that need to be in your truck folder read here.

May 4, 20184 Comments

Steps to Become a Truck Owner Operator

The origin of being your boss

Many company drivers dream to become an owner-operator who has their truck and drive for themselves. After all, America is the land of opportunity, and good trucking service is always in demand, so there is money to be made by working for oneself. Most of the drivers that fail in owning a truck do that because they are not prepared for all that will come towards them. We have seen excellent drivers losing their savings and owing money because they were surprised by some of the expenses that come with buying and operating a truck. Future owner-operators must think about their cost of the commercial truck, type of trailer, revenue per mile, truck insurance, etc. The list is long.

We hope that this article will help, the future owner operator. Better to read it now, than to pay the high price of learning it down the road.

Brand New Freightliner Cascadia Owner Operator Specs Bobtail Truck

First things first - Cost of commercial truck

You need a horse. There are two ways — you can buy or lease.

Buying a truck is easy

Walk in the first truck dealer you see, and the salesman will do everything possible to sell you one and help you finance it if you have any credit history. You should consider how much the monthly payment will be for that truck. A long time ago a friend of mine told me that a truck without a monthly fee does not exist. If you buy a brand-new truck you will have the apparent loan payment, then immediately after you pay it off, there will be a new payment in the form of higher maintenance expenses.

The cost of a commercial truck, in that case, would be the price + the accumulated interest. From a tax perspective,  the owner-operator can write off the insurance as an expense along with the depreciation of the truck.

Leasing a truck

As a future owner-operator, you can rent a vehicle from Penske/Ryder, as well as most of the big dealers like Freightliner, Volvo, Peterbilt/Kenworth, and International, or even most of the truck financing companies. The first two companies would charge a certain amount per month + charge per mile. They will cover most of the maintenance. However, they will not cover damages due to driver’s fault, which includes anything from a flat tire due to nail, cracked windshield or even if someone breaks your mirror at the truck stop and runs away, etc.

The other type of lease is called “Lease to buy” by lenders. It works similarly to a loan, but the truck is owned by the bank until you “pay it off.” Essentially, you are paying rent (lease payment) to the bank, which in the end transfers/sells it to you for $1. The sales pitch for such loans is that you can write off the payments as an expense and pay fewer taxes. If that is the only reason to choose it — don’t. It is true that a lease payment of $2000 a month can be written off at the end of the year and a loan payment of $2000 cannot in the same way. However, when you have a lease payment the maximum that you can write off is $24000, compared to the loan type, where you can write off depreciation and interest.

Owner Operator Financing

Next time when you have to talk with a loan officer for financing a trailer, for example, they will look at your financials or tax returns. It is much better to have depreciation expense than lease expense if you want to get a better loan rate.

A few things that the financing agency will ask you are — how much experience you have as a truck driver, how much (if any) experience you have as an owner-operator and for which company you will be driving for. The first question is so they determine whether you can drive a truck. The second is to determine if you can operate a business, and the third one is for them to know that you will be doing actual work with the truck.

      After all the paperwork is done, and you are ready to drive off the parking lot, you must show the dealer and the lender proof of insurance.

Owner Operator Insurance

Big rig truck insurance is very different than car insurance. Future owner-operators must know what they are paying for. Check this article for more detailed information.

 Registration 

To haul any load on public highways, you need to have a truck registration. This is the next costly part of owning a truck. The plate can be a state registration or IRP (International Registration Plan). The first would permit you to drive only in the state where the truck is registered. It is usually more expensive than the other, but you don’t need to pay IFTA (International Fuel Tax Agreement). The second permits you to haul freight in North America (hence International Registration Plan) except for the Mexican and Canadian provinces that don’t border with the US.

Permits

We have seen drivers that take money from IFTA, but for the most part, it is around $100–200 per quarter. State permits depend on how much you drive through OR, KY, NM, and NY. Oregon charges you $0.1638 per mile driven in the state. You can offset the extra charge by fueling there since fuel is cheap. NM, NY, and KY charge around $0.05 per mile driven in the state. Other states don’t have such charges, but they do have toll roads, so one way or another you pay. You can read about all the permits in your truck folder here.

ELD Device

After December 18th, 2017, the trucking industry changed. Owner-operators should know how to choose their elog device or go with the trucking company they decide to work for. The

Pick up the right freight segment

The horse is here, but where is the carriage? There are four main freight types and everything else we will put in the group Other Freight.

Dry Freight

This is the most common freight out there and the easiest to haul. Most of the TL carriers include this type of service in their business model. Dry Vans are the cheapest trailer to buy, maintain and load. Most of the time you spend on the road. Almost all companies that pay per mile pull exclusively dry vans. However, dry van loads do not pay as the others.

Refrigerated or temperature controlled

For this type of freight, you need a reefer trailer. It costs twice as much as a dry van trailer, and you need to maintain the reefer unit. It is like having another car attached to the trailer all the time. Oil changes, belts, AC compressor, etc., are things that you need to be aware of and concerned about. Majority of the loads are foods, which means extended pickups, deliveries and special appointment hours. Reefer is easy to load like a dry van, but you must sleep with the unit on most nights. Some drivers are ok with it; others hate it. You make more money with the reefer loads, but you also have more expenses.

Flatbed Freight

Crane or forklift load that type of freight from the top or the side of the trailer. The most commonly used trailers are Flatbeds (obviously), Step Decks and Conestoga. Flatbeds cost almost as dry vans, where step decks and Conestoga are around 10k more expensive. However, as an owner operator, you must buy more supporting equipment — chains, straps, tarps, to name a few. You must also use the equipment, to brace and strap the load. Chains are heavy, and you should move them around when you are securing steel coils. Tarping is not fun for many drivers as well. However, you are getting paid better for the loads.

Hazmat Freight

Тhe previous three load types can be Hazmat as well. That means that they need to follow the Hazardous Material Transportation Regulations. Most of the time this type of freight is loaded in dry van and reefers, but occasionally you will see a flatbed with such cargo. It pays more than other cargo for the given lane, but you must be more careful.

Other Freight

These include tankers, auto carriers, livestock trailers, dump trailer, etc. People usually do not come from driving school and get immediately with Livestock or Tanker truck. They come with their specifications. Livestock is not easy, nor is it easier oversize load or a car hauling trailer.

Choose the right trucking company for yourself

Everyone says that they one of the best owner operator companies. This is the hard part. How do you decide which trucking companies are good and which one is bad?!
Trucking companies pay their owner operators in a couple of different ways:

Revenue per mile

Most of the big trucking companies pay per mile to owner-operators. They usually have a base rate per mile + fuel surcharge(fsc), and you don’t have to have a trailer in general. Signing with such company relieves you from the burden of thinking about other charges that you will have — liability insurance, trailer rent, permits, trailer maintenance, etc. The fuel surcharge changes with the average price of fuel in the US, so it is the same for everyone. However, the base rate changes with the different companies. Some will pay you one rate for loaded miles and another (lower and often without fsc) for empty miles. The other will pay a seemingly higher price for all miles, but you must pay for IFTA, KY permit, NM permit, etc. And in general, these companies will have stricter rules for you to obey.

Revenue per percentage of the freight

This type of trucking companies pays the owner-operator percentage of the cargo that they book for the truck. Usually, the FCS is part of the gross rate. Smaller companies pay 86–90% of the freight revenue, where large fleets pay you around 70%.

Companies with pay range 86–90%

These carriers will not cover expenses such as permits, insurance, trailer, etc. in the percentage they charge. However, you have the most freedom of being an owner operator with them. Some drivers misinterpreted that freedom with changing their company once a month. Not a good idea! When companies do a background check (as required by DOT), they see that and will not take you seriously because they will know that you will work only for a limited time. There are shady companies out there (Chicago has a bad reputation), but if an owner-operator must change three carriers in 6 months think about the way you choose them or the way you work.

Deductions

The Owner-Operator usually pay $700–1000 for “cargo” insurance, which is liability and cargo policy in one. On top of that, he will have the option to choose to pay an additional 5% from the truck revenue or $500–800 a month for trailer rent, insurance, and brake/tires wear. The new owner-operator can purchase its trailer, which will save him money every month. An additional charge would be for IFTA and state permits.

These charges should be in the back of your mind when you pick a load, but should not be your primary criteria.

© 2018 Logiflex Inc

Blog / truck insurance

What do truck drivers need to have in their permit folder?

Whether we call it a permit book, a paperwork binder or a document folder you keep one in your truck. Have you had an...

→ Read More

Different truck insurance explained

4 types of insurance associated with owning an eighteen-wheeler Owner operators are asking us to have truck insurance explained and what are the charges....

→ Read More

Steps to Become a Truck Owner Operator

The origin of being your boss Many company drivers dream to become an owner-operator who has their truck and drive for themselves. After all,...

→ Read More