For many owner-operators, the dream of running their own business stops at having one or maybe two trucks and leasing on to a good carrier. For them, that’s enough responsibility, enough headaches and, one hopes, enough reward. Let the carrier worry about finding loads, paying fuel tax settlements, DOT audits and the like.

But others dream of having their own authority – being allowed to obtain their own loads, their fate in their hands as surely as the steering wheel. When they want to see the boss, they just look in the mirror.

Like any small businessperson, the independent trucker shoulders all the risks in order to reap a bigger reward. Risks are high, because operating margins are slim at best, and easily wiped out by accidents, breakdowns, illness, fuel price spikes – the list is endless.

Before the deregulation of trucking in the 1980s, operating authority was hard and expensive to come by. It was concentrated in the hands of large carriers who jealously guarded their privileges. Most operating territories and routes were severely limited. Deregulation opened the floodgates to a wave of new carriers; it’s almost too easy to apply for and get your own authority now. Deregulation yielded bitter fruit in the form of cutthroat competition that still depresses freight rates. And that’s the biggest incentive to obtain your authority. An owner-operator leased to a carrier receives only part of the rate paid for that load – why not get it all?

There are three types of authority – common carrier, contract carrier and broker (see opposite page, “Getting Your Authority”). For this article, we decided to focus on the first two and deal with brokering in a later article. Below, two couples discuss why they wanted their own authority, how they prepared and lessons they learned. Would they do it again? “Yes,” each says, but only after a thoughtful pause.

Common Carrier

Bad luck came calling on Bill and Shannon Clark barely a month after Wagon Wheel Express of Elizabethton, Tenn., received its operating authority. A drunk driver ran a red light and slammed into Bill’s stopped rig, doing some $15,000 in damage and, even worse, sidelining him for three months for repairs.

Bill, 39, comes from a family of truckers – father, mother, several uncles – and had always dreamed of owning a small trucking company. He got his license in 1990 and ran as a company driver before buying a used 1995 Freightliner FLD in 1999. He leased it to a fleet for a short time before he and Shannon applied for their own authority in July 2000.

“I had always wanted to be my own boss, do the entrepreneur thing,” Bill says. “It started as a vision of a small mom-and-pop trucking company. I’m the only one in my family ever to get my own authority.”

Nearly everyone advised against it – their families, their truck dealership, other truckers on the road. “Most everybody I talked to said, ‘Unless you’ve got a lot of financial backing and operating capital, don’t do it.’ The Freightliner dealer used to own a trucking company, and he said unless you buy a lot of trucks and keep them going, the insurance will kill you,” she says. Warnings were plentiful, but practical operating advice was scarce. “We got every book we could find, but nothing helped,” Shannon says. “We harassed the truck dealership to death, figuring that they might know the answer to questions we had. They were really nice about it. Finally, we decided the only way to find out was to go ahead and do it.”

They got their authority in late August 2000. They had saved about 30 days’ operating funds – “It should have been at least 45 days,” Shannon says now – and were searching for loads at The Internet Truckstop and other online load services.

Things were beginning to shape up until near the end of September when the drunk driver hit the rig. Bill was only two blocks from home, having dropped off his load. The repairs, plus ongoing truck payments and expenses, wiped out most of their nest egg. “We were ready to throw in the towel,” she says. Then fuel prices spiked and freight slowed just as he got back in his truck. “The fuel increase just about destroyed us,” Bill says. “I went from paying $600 a week for fuel to $1,000 a week. That didn’t leave much. But people said to hang in there until March, and, sure enough, on March 1, freight started to take off.”

While Bill’s on the road, Shannon handles the dispatching and paperwork, looks after their children and holds down a part-time job. She was a bookkeeper at one time, and that helps.

“There is a lot of paperwork. I get stuff from the DOT every day about changes in this or that. Unless you have someone at home to help, you can’t drive and do all the paperwork, too,” Shannon says.

“You need to watch every penny in this business,” Bill says. “If you bid on work, you need to bid it right so you cover your overhead. You have to keep your books balanced and know what the truck’s making.”

As things have improved, Bill’s father has occasionally taken some loads in his own truck for Wagon Wheel Express. The Clarks say they are cautiously optimistic their run of bad luck is over. “I tell Shannon,” Bill laughs, “that eventually we will crack this rock if we just keep putting the hammer to it long enough.”

Contract Carrier

Whereas Bill Clark’s search for loads may take him almost anywhere, John Arnold of Branford, Fla., rarely goes more than four hours away from home and almost always knows where he will find his next load.

Suwannee River Transport Inc. is a contract carrier serving several large Florida meat and chicken producers on short and regional runs. In just three years with his own authority, Arnold and his wife, Ginger, have grown the company to seven lease operators and 14 trailers. He still drives, but hopes to come off the road in the next few months, except for occasional runs.

Before going into trucking in 1994, Arnold had worked in shipping at Tropicana in Bradenton, Fla., as manager of traffic and customer service. While there, he caught the trucking bug. When one of the fleets that served Tropicana urged him to buy a truck and work for it, he quit Tropicana and went to driving school.

“I felt I was in a dead-end job at Tropicana, and trucking offered me the chance to do something I wanted to do and earn more money,” he says. “The freedom of being his own boss was the real draw,” Ginger adds.

John bought a used Mack cabover after graduation and got a dedicated run between Tampa and Bradenton. He moved on to a couple of larger carriers and spent some time over-the-road. But he wasn’t happy. “I finally decided I knew as much about the business as they did, and who needed them?”

For a short time after launching Suwannee River Transport with one truck and one trailer, Arnold hauled produce. Thanks to his experience and his contacts in shipping, he soon landed several contracts that laid the foundation of the business.

“We have about three shippers for whom we’ve provided good customer service and loyalty, and they give us a lot of freight,” Ginger says. “There is freight out there, but you’ve got to find a niche and be service-oriented and polite to everyone.”

They use some larger brokers, which has allowed them to expand their service area to about a 500-mile radius.

“When we first got into this, there was so much we didn’t know, and that we didn’t know we didn’t know,” Ginger says. “We had heard the money was in produce, but it’s seasonal, and we didn’t realize there were people who wouldn’t pay their bills. When we started growing, we were stunned to learn how much insurance costs. You have to protect yourself on all sides, because people see a big truck and think big money.”

Shortly after they launched the business, they figured out a secret. “We realized we could make more money with two trailers – because his runs were short, one trailer could be loading while John delivered the other one. He didn’t have to sit and wait. Waiting is the main income killer.” The second trailer significantly boosted revenues, and now they maintain a 2-to-1 trailer-to-tractor ratio.

At first, John handled nearly everything himself, while Ginger learned the business. She has a clerical background, and they set up and organized the vital bookkeeping and files systems. She also tried dispatching, but found it difficult to juggle that and office duties.

“So John handles dispatch, usually from his cell phone on the side of the road. He goes through about a legal pad of paper a week, keeping track of all that’s going on,” she says.

As Suwannee River continues to grow, both Arnolds want John to come off the road so he can handle dispatch, customer contacts and other critical needs. They hope to be near this mile marker by the time you read this.

“The Lord has been good to us and is continuing to be good to us. We give a lot of credit to our God,” John says.

The Arnolds have had considerably better luck than the Clarks, and have structured their business differently. But they learned some of the same lessons the Clarks did. You need working capital, people skills and patience. You must be organized against the day when the DOT or IRS calls. Expect the unexpected.

Finally, and most important, it’s almost impossible to do it alone. You need a partner whose talents complement yours and with whom you work well. Without that, you truly are on your own.

Getting Your Authority

There are three basic types of operating authority:

“Common Carrier” authority lets you seek and haul loads from most any shipper without an ongoing contract.

A “contract carrier” hauls loads under a contract stating flat rates for each load. Brokers’ fees are set as part of the contract.

Then there is “Broker Authority,” which lets you broker freight for shippers and has significant bond and insurance requirements.

Not surprisingly, there is a lot of paperwork involved in applying for your own operating authority. Some of it will serve you well later on, such as developing a business plan, lining up a few initial customers, deciding whether to incorporate and building up at least 30 days worth of working capital.

You must also set up company files, including one for each driver; familiarize yourself with the Federal Motor Carrier Safety Regulations handbook; and pull together all the forms and contracts you’ll need to do business.

The paperwork can take a couple of months to complete, and you’ll be busy while it’s being handled. You must line up insurance or bonds, set up a drug-testing program, have yourself and any other drivers tested, get a Single State Registration and IFTA decal, and make sure your business files comply with federal regs. You’ll also probably be researching computers, cell phones, fax machines and sources of loads.

Got it all covered? Great! Now you’re in business.