Mornin’ all!
Next week I’ve got a bit of a project on looking at the US Lease Operators system for both CM and T&D. Two angles, first to see if it could work over here or whether we’d need legislative changes, and if it could be used to encourage people to stay in the industry by providing a means of progression, second to see what it’s actually like in practice on the ground - I know there are both good and really bad experiences out there.
So. Anything and everything to do with Lease Operators…
Have you done it or know someone who’s done it?
Have you seen it done well or badly?
Can you put me onto anyone who can tell me what it’s like?
What do you guys think about the whole thing having seen it in action?
Which US carriers are particularly well-known for having a lot of people lease on, good or bad?
Anything else you might want to contribute…
I’m already onto OOIDA for their side and view, who else do you recommend I try for info?
Your input is particularly important as you’re all ex-UK drivers, so if you feel you can help in any way, however small, please shout up. Names can be withheld if you prefer.
Thankyou!!! 
Try and look at the lease op forum on TruckersReport.com. it’s offline having software upgrades right now, but there is a ton of stuff on there. Typical Internet stuff with everyone arguing and that, but some good info in there too which may help you.
Some of the companies that do these lease op deals make more money from that than they do from hauling freight.
Some of them get people to sign on as lease ops before they’re even finished their training.
The easier it is to get in to it, the easier it is to fail and if you fail in business it can have long lasting implications on not only your finances, but your health and relationships too.
There are some decent leases out there though, it’s not all bad news, a few Canadian firms do it and the lease operators do quite well. I would’ve considered doing one, but it’s not my first rodeo, so I jumped in at the deep end and bought a truck in the usual manner.
Slightly off topic but a lot of the quarry aggregate and ready mix company’s have offered a frachise set up for years in the UK.
I guess the o licence system is the biggest difference as even though these work under the cemex Hanson tarmac etc banner the operator needs there own o licence where in North America you buy the truck and go on the company licence
That’s great NMM, thanks. And yeah, that is the main difference kr79, and I’ll be looking at the tipper/mixer schemes as well by way of comparison.
One thing I don’t understand is, haulage companies are in business to make money, if there’s good money to be made, why do they give that money away to a lease op and not put it in their own bank ?
I read on FB page that included pictures, that Swift Transport in the US have 3 trucks that are solely dedicated to going around picking up abandoned lease op trucks and piggybacking them back to main base.
The company I work for in the USA has lease operators, I find most of them go bust within a year but this is mostly because they do not plan for events such as breakdowns etc, they put nothing by and although the company help by having a fund each driver contributes into they still don’t put money aside for such expensive problems.
The average weekly payment for the trucks is $480, then there is a tyre account, each truck leased from the company comes with fresh warranty cover but some things are not covered. I take home more money than those drivers most weeks and I have full health care and vacation pay plus other incentives, they have to pay for their own benefits and on the odd weeks when work is slow I see them struggle, I have actually seen a woman lease driver crying because she had broken down and couldn’t take any more, she handed her truck back and quit next day.
We also have drivers who own their own trucks, bought elsewhere, they seem to do a lot better.
Thanks Pat. So why do people keep doing it if all you hear are horror stories? Or is the usual scenario where bad news gets more air time? Genuinely curious…I must work for someone (other than the carrier, obviously! 
)…?
Almost always its because they have no business skills and lack the understanding that its just that, business. and for the big fleets its
a great way to get the truck paid for and when the driver goes broke, well theres another lining up behind him.
These trucks cost 2500 to 3000 a month in payment, thats coming off the top of the settlement, doing 2500 miles a week at a dollar a mile with fuel after surcharge costing about 1.25 its almost criminal.
99% of lease ops have no credit to go out and buy a truck and wouldn’t understand saving up, sorting credit and learning what is really involved is an option. Personally I think they are a scam that should be illegal , maybe somewhere there is an honest one but I have never heard of one. The percentage of drivers completing the 4 or 5 year fleece will be low single figures, the rest will be stories that would make you cry.
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I find this blog gives a very good insite into lease hire, and then going on to be an owner operator.
Lucy:
Thanks Pat. So why do people keep doing it if all you hear are horror stories? Or is the usual scenario where bad news gets more air time? Genuinely curious…I must work for someone (other than the carrier, obviously! )…?
I really can’t answer that Lucy, I even know drivers who have tried and lost everything then a year or so later got back into worse debt to try it again, they never learned the first time. Before joining the company I am with I tried the self employed driving bit, I lasted 6 months and got the offer to work here, I was still getting tax bills 3 years after quitting, I worked out that after al the expences and out goings I made about 19c a mile.
Why do people do it? Simple, it’s the lure of the big bucks. They target (and target is exactly what they do) newcomers to the industry. Earn 30cpm as a company driver, or $1pm as a lease operator. What would you do?
The problem is that they don’t tell them about the amount of money from that $1pm that they will pay back to the company. Maintenance accounts, tyre accounts, hold backs for this, hold backs for that. Then on top if that there are the taxes and workers compensation payments.
Add to this the people do not have a clue how the industry works and you have all the ingredients for a disaster.
The Canadian ones seem much better by and large, for one the trucks have to come back to Canada after each run to the USA, so the miles are good, the Canadian lease op programmes also seem to be about driver retention (keeping good drivers) rather than just adding meat to the seat.
When the eager victim signs up for his lease, he is agreeing to pay figure x for the next 4 or 5 years. At the end there is a final payment from 1 to maybe 50k $. Until that final payment is made the trucks title is held by the company leasing it. If the driver misses a payment, or does something that embarasses or annoys the company they have the right to terminate the deal. Straight off, no money back no nothing, but if its dirty or damaged there will be a charge.
You dont want to have a bad relationship with your dispatcher, your entire financial future is in his hands. Literally.
Your question about why people are mugged by these sharp practices is reasonable, but the only logical answer is ignorance or stupidity, except in a tiny percentage of cases where the operator is incredibly determined.
One thing is for sure, there would be more protection given to the mug ( lease operator) in Britain , laws here to protect individuals rights are not in the same league as the U.K…
I’m A lease operator, I like hearing all the horror stories about it too as some are totally true, as for Folks doing it with no business acumen I dare say many haven’t got any, I work with loads of guys on the same gig as Me without any that are doing very very well but many wouldn’t cut it in Europe & The UK. The simple thing is We are basically doing what We do as We have no Authority IE O’Licence here & leading is the way forward. The company I work for have a great lease program so good in fact I’d have had no business sense if I hadn’t have done it really. In reality up here where I am We are all in theory leased on to our carrier regardless of how You buy the truck IMHO. I am really no better than a glorified lorry driver really but with all the perks of being self employed, I held an international O’Licence for over quarter of a century & was awful happy when I gave it back if I’m honest, and sadly I had a fantastic thing going for many years in The UK, I just didn’t want to reinvent Myself in an overcrowded market again so took the bag of wonga & came over here.
Wether it would work in The UK or not I don’t know but in reality why not, thinking about blokes on containers etc the majority are contracted to one shipper/Haulier anyways so why not, I remember some trouble in the mid eighties about self employed drivers & the need for an O’licence. It’s the same as anything else really it’s who You choose to do it with really, My peeps view is simple they do it to retain drivers who have the itch to be an O/D they feel it’s better scratched with them simple as. HTH
Oops a daisy I do it in Canada but run the lower 48, same principle though I guess but sorry if I mislead You.
Sorry to mislead anyone I’m in Canada so maybe a bit different but maybe not I still run the lower 48 though
fly sheet:
I’m A lease operator, I like hearing all the horror stories about it too as some are totally true, as for Folks doing it with no business acumen I dare say many haven’t got any, I work with loads of guys on the same gig as Me without any that are doing very very well but many wouldn’t cut it in Europe & The UK. The simple thing is We are basically doing what We do as We have no Authority IE O’Licence here & leading is the way forward. The company I work for have a great lease program so good in fact I’d have had no business sense if I hadn’t have done it really. In reality up here where I am We are all in theory leased on to our carrier regardless of how You buy the truck IMHO. I am really no better than a glorified lorry driver really but with all the perks of being self employed, I held an international O’Licence for over quarter of a century & was awful happy when I gave it back if I’m honest, and sadly I had a fantastic thing going for many years in The UK, I just didn’t want to reinvent Myself in an overcrowded market again so took the bag of wonga & came over here.
Wether it would work in The UK or not I don’t know but in reality why not, thinking about blokes on containers etc the majority are contracted to one shipper/Haulier anyways so why not, I remember some trouble in the mid eighties about self employed drivers & the need for an O’licence. It’s the same as anything else really it’s who You choose to do it with really, My peeps view is simple they do it to retain drivers who have the itch to be an O/D they feel it’s better scratched with them simple as. HTH
Fair play to you fly sheet, I am an o/o leased to a Canadian company too but I bet you’re not running like an England or pam driver for a 99c a mile and micro managed by dispatch till you cant think anymore.
Canada and the U.S. are different no doubt, might seem like splitting hairs to some but it seems to me you work for a proper outfit genuinely interested in improving the quality of their drivers lives, I dont think there is 1% of U.S. companies that see it as anything more than a cash cow.
Met a bloke from Birmingham a while back driving a 780 he was leasing from Payne in Winnipeg, he couldnt say enough good things about them.
In the States the annual average driver turnover is around 100% in any year. There must be thousands of great firms that dont lose drivers but I can only imagine the rates at the less desirable outfits. As was mentioned in an earlier post, the forum at the drivers report has plenty to read!
I suppose because to me the conditions between north and south of the 49th parallel are so completely different my opinions seen general but I should be clear and say my views are based on the way lease ops work in the USA , and I really think they are a considered business model for the companies and a life changing scam on people who dont know better.
fly sheet:
I’m A lease operator, I like hearing all the horror stories about it too as some are totally true, as for Folks doing it with no business acumen I dare say many haven’t got any, I work with loads of guys on the same gig as Me without any that are doing very very well but many wouldn’t cut it in Europe & The UK. The simple thing is We are basically doing what We do as We have no Authority IE O’Licence here & leading is the way forward. The company I work for have a great lease program so good in fact I’d have had no business sense if I hadn’t have done it really. In reality up here where I am We are all in theory leased on to our carrier regardless of how You buy the truck IMHO. I am really no better than a glorified lorry driver really but with all the perks of being self employed, I held an international O’Licence for over quarter of a century & was awful happy when I gave it back if I’m honest, and sadly I had a fantastic thing going for many years in The UK, I just didn’t want to reinvent Myself in an overcrowded market again so took the bag of wonga & came over here.
Wether it would work in The UK or not I don’t know but in reality why not, thinking about blokes on containers etc the majority are contracted to one shipper/Haulier anyways so why not, I remember some trouble in the mid eighties about self employed drivers & the need for an O’licence. It’s the same as anything else really it’s who You choose to do it with really, My peeps view is simple they do it to retain drivers who have the itch to be an O/D they feel it’s better scratched with them simple as. HTH
Fair play to you fly sheet, I am an o/o leased to a Canadian company too but I bet you’re not running like an England or pam driver for a 99c a mile and micro managed by dispatch till you cant think anymore.
Canada and the U.S. are different no doubt, might seem like splitting hairs to some but it seems to me you work for a proper outfit genuinely interested in improving the quality of their drivers lives, I dont think there is 1% of U.S. companies that see it as anything more than a cash cow.
Met a bloke from Birmingham a while back driving a 780 he was leasing from Payne in Winnipeg, he couldnt say enough good things about them.
In the States the annual average driver turnover is around 100% in any year. There must be thousands of great firms that dont lose drivers but I can only imagine the rates at the less desirable outfits. As was mentioned in an earlier post, the forum at the drivers report has plenty to read!
I suppose because to me the conditions between north and south of the 49th parallel are so completely different my opinions seen general but I should be clear and say my views are based on the way lease ops work in the USA , and I really think they are a considered business model for the companies and a life changing scam on people who dont know better.