Much must be considered when choosing a carrier. In the U.S. there are three types of owner/operator lease agreements for signing on with a carrier. These include a lease-purchase agreement, under which a driver pays a monthly fee for agreeing to drive a company-owned truck for the duration of the lease and is given the option to purchase that truck at the end of the lease term. It’s a favorable option for a driver’s first truck purchase.
Then there is the lease program where again the driver pays to operate a company truck but without the option to purchase the truck at the end of the term, which usually makes for lower payments throughout the term of the lease. When the term ends, there generally exists a choice of renewing or extending the lease or moving on.
The lease-on agreement is the contract we will focus upon in this post. So, now you own a truck and want to look for a good carrier that you hear pays well. But there’s so much more to consider first. You need to know the average length of trips, which lanes are available, how much home time you’ll enjoy, and what type of freight is right for your equipment. In short, you need to know if you’re a good fit for the company in question before considering a lease-on contract. Then you can discuss compensation.
The first rule of considering a contract is to scrutinize the fine print until you understand it thoroughly and either agree or disagree with those terms, in which there may be negotiations permitted. Never just accept everything and sign away because you heard it’s a great company. Due diligence is required on your part!
You, by contract, must supply whatever is required for securing, transporting and delivering the freight. You need to understand what the trucking company will take responsibility for, such as permits, providing fuel discount cards, compliance, etc. You, on the other hand, will need to cover maintenance and repair costs for your vehicle and equipment. Also consider which party will cover the cost of violations.
Find out if clerical services are included with or without fees. Don’t assume that dispatching services are included free of charge. Put it in the contract and know if it is included in the fee for services or if it’s free. Nothing is a given when it comes to a contract.
Once you have satisfied yourself that the prospective carrier is a good outfit and you’ve settled on working for them, reread the contract and don’t forget the fine print. Take your time.
Fortunately, the Federal Motor Carrier Safety Administration has guidelines and information available for finding your way through lease agreements. Also, FMCSA has created the Truck Leasing Task Force (TLTF) to promote accuracy and help with truck leasing agreements. For more information visit Welcome to FMCSA’s TLTF | FMCSA (dot.gov).
Good luck and great fortune and happiness in your new venture, and always motor safely.