Should you lease on with a company or get your own authority right away?
The One Big Advantage of Leasing On
If you’re a complete beginner, it doesn’t make much sense to get your own authority — as we’ll see later. On the other hand, here’s one of the coolest benefits of leasing on — for a small percentage of the load, you’ll get access to the relationships that the company has developed. You can get loads without going through load boards. How cool is that? Therefore, it makes more sense to lease on because this is one of the advantages or benefits you’ll get access to.
Not only do you get a dispatch — not only do you get to use their authority — but you also get access to loads that you never would have gotten otherwise. The broker will give the loads to the company, and the company, in turn, will give them to you. (And not because you’re special by any means, but because you might be the only one in the area.)
Now those loads would never have hit the load board. Therefore, others would never have gotten this opportunity because you got it directly from the broker. Now, you don’t get it directly from the shipper — very few shippers want to take their brokerage in-house (it’s just too much hassle) — but the shipper gives it to the broker, and the broker calls his top 3-4 carriers.
So is it impossible to get on to that list as a new authority? No, it’s not impossible.
But it does take time. Perhaps a very long time. That explains…
The High Failure Rate of New Authorities
When you’re a new authority, it’s already hard enough. The odds are already stacked up against you. That it makes it difficult to start. But then, to never get the option of hauling the nicer-paying loads? Well, that’s the disappointing part.
So if you’re planning to go out on your own authority, you’d better be prepared. Going out on your authority isn’t a joke. It isn’t something you take lightly. It’s serious stuff. There’s at least a 50 percent failure rate in new authorities. That means half of those who get their own authority don’t have it anymore after their very first year. Think about that.
Our Twin Recommendations
Go drive for someone first. Be a leased-on owner-operator. Then, go get your own authority.
Let’s say you’re brand new and you want to get into hotshotting. What should you do?
- Get some experience.
- Get your CDL.
That’s the best way — or the only way — somebody will lease you on as an owner-operator. When you get your CDL, that doesn’t mean you’re an expert all of a sudden, but it just shows the company that you’ll (hopefully) avoid all the rookie mistakes. That’s all you want. They just want that reassurance.
So if you’re brand new and you want to lease on to a company — and maybe you’ve been rejected before — get your CDL. But drive a non-CDL truck or whatever truck you have.
Then, just get started and work really hard. Take advantage of those contracts. Take advantage of their connections. Of course, that doesn’t mean you’ll call the broker directly, but you will get to benefit from the relationship and the opportunity that the broker has developed with them.
Who Should You Lease On To?
Don’t lease on to someone who’s brand new. That defeats the purpose. Instead, lease on to companies that have been around. Ask them: How old are you guys? How long have you been around? Do you get direct calls? If they’ve been around two years or longer, they’ll get direct calls — that’s the good stuff. That’s where, before it even hits a load board, you got that option.
The Bottom Line
There’s no point in getting your authority if you’re brand-new. It’s not as easy as some people think, as evidenced by the high failure rate. There’s a lot of stuff that you’ve got to figure out.
But if you’ve been at this for a while — you’ve tons of experience as a driver or as a lease-on owner-operator — then yes, the next step is to go get your own authority. Because in terms of the long-term benefits, you don’t really want to be a lifetime lease-on owner-operator.
One Final Tip: Get Your CDL This Year!
By the way, this year is the last year you can go get a CDL without taking a course or a class. The government (FMCSA) has passed a new law recently — that was unanimously supported by the American Trucking Association and others — that there should be some kind of course or class required before you can get your CDL. This kicks in on February 7, 2020. So if you’re new and contemplating hotshotting but you’ve been rejected a couple of times, go get your CDL this year! Because this is the last year you can do it without taking a class. Next year, you’ll have to start paying for “certified” classes. So we strongly recommend that you get your CDL this year.