Are you struggling to choose between starting your own trucking authority and leasing on to an existing company?

If you’re getting your own truck, you’re most likely going to face this dilemma that will leave you almost clueless about the right decision to make. You might be wondering whether to get your own authority or lease on to another company.

To make an informed decision, you need to understand several things. Some of the questions to consider are: how does having your own trucking authority work, how can a company that offers trucking authority services make getting your own trucking authority easy, what typical trucking authority packages entail, and the pros and cons of leasing onto someone else’s authority.

Understanding these things can be cumbersome if you’re new to the business. Fortunately, we have you covered! And in this article, we will let you in on all you need to know to make an informed decision.

Before we dive into details, let’s look at the difference between the two options: getting your own authority or leasing on to a trucking company.

 

Getting Your Own Authority

By choosing to be your own boss, you stand the chance of reaping the benefits of total independence and flexibility. You enjoy 100% profit and make all decisions that are required for the business.

But this option also comes with its own drawbacks. For example, if you have ever tried getting a trucking authority, you already know how hectic the process can be. From figuring out how to get a MC number in Texas, to getting your TXDMV number and meeting your drug testing requirements, there are so many hurdles to worry about. But the good part of it is you can get some relief by leveraging the best trucking permits company in Houston, Texas!

Overall, getting your own trucking authority is way better when compared to leasing your truck to another company.

Pros

  • Total Independence and Control of the Business. You are the only decision-maker, and you don’t have to take orders from anyone. Trucking companies can be notorious for having a high turnover rate. When you are your own boss, you don’t have to deal with anyone bossing you around!
  • 100% Control Over Your Earnings. You have all the rights to 100% of your profits. And, this means when you work hard, you get rewarded for it.
  • Ability to Grow. When you have your own trucking authority, you can grow quicker since you own your company. All profits come back to you and you can reinvest it in your company to grow your fleet.

Cons

  • The Starting Process can be Confusing. If you try to start your company on your own, the process can seem intimidating. You’ll have some steps you need to take to get your authority. First, you need to form a limited liability company and then apply for your trucking authority with the FMCSA. Then, there are several steps to obtain other required permits to be fully legal. Luckily, you have our team at TexasTruckPermits.com to help you start your trucking company!
  • Not Being Able to Start Business Immediately. Once you get your authority and it becomes active, you’ll need to wait for 21 days before you start working. This is because the FMCSA has a mandatory waiting period of 21 days to process your application and activate your MC number. However, Texas Truck Permits has vast experience in timing the process right so that you’re on the road as soon as possible!

 

Leasing on to a Trucking Company

What most owner-operators do is to lease their motors onto an existing trucking company. This is because doing this is easy and comes with some benefits, especially if you’re just starting out in the business. Some of the benefits are that it reduces the stress of finding loads for your truck and helps you start the business almost immediately.

Since you’re leasing on to another trucking company, the company bears the responsibility of finding loads for your truck, and sometimes, it also covers for you some trucking costs such as IFTA taxes.

However, this option comes with its own drawbacks such as a lack of total independence and control over the business and your earnings.

So you must be ready to consider all these factors before opting for an option, and most importantly, it all depends on your goals.

Pros

  • Benefits of Starting Almost Immediately. If your truck qualifies, you can start operations as soon as you choose to. Different trucking companies will have specific policies and requirements regarding drivers and trucks that lease on to their trucking company.
  • Not Having to Pay All Expenses Right Away. When you get your own trucking authority, there are some costs you need to take responsibility for yourself. These include insurance, fuel, repair and maintenance, and more. All these can be costly if you’re just starting out on a shoestring budget. If you are starting your own trucking company and are worried about cash flow. You have the option to use a trucking factoring company. Texas Truck Permits is partnered with the most reputable factoring company in Houston, Texas.

Cons

  • Lack of Independence or Control. Since you’re working for another trucking company, you’re expected to take orders from that company and this leaves you with little to no option of flexibility and independence.
  • Profit-Sharing. Under this option, you have to share your earnings with the company you’re working for. You don’t have 100% profit as you’ll get when you work under your own authority.
  • Lack of Work. The company that you’re leasing onto will decide who gets loaded and who doesn’t. Trucking companies will always prioritize getting loads for their own trucks first instead of owner operators. Dispatchers that work for the company can also play favorites if they’re good friends with certain drivers.

 

Which Option Will Be Best For You?

We believe that getting your own authority, which makes you your own boss and allows you to have 100% control over your earnings and the business, is always the best option. The only drawback is that it can be a bit more complicated, especially when you consider the tasks of forming a company entity, filing for permits, and finding loads for your trucking business. With TexasTruckPermits.com, we make the process smooth and easy. We’ve helped 100’s of drivers start and grow their trucking companies. We can help you too!

As with leasing your truck to another company, it has its own pros and cons. But it’s the best option for you if you’re looking at starting immediately without the usual 21-day waiting period, or you want to dispense with the stress of filing paperwork or finding loads yourself. Although this deprives you of the benefit of total control of the business, it’s the ideal option for people who are not business savvy and are okay with being a driver and taking orders from the company they’re leased under.

All in all, choosing between getting your own authority and leasing on to another company depends on your lifestyle and finance. So you should make a decision based on what you want and what will be most suitable for your conditions.