We all know the old saying: One bad apple will spoil the whole bushel. But what do you do when only a couple of apples in the bushel are good and the rest are at best imperfect if not rotten? In my view, this is the state of trucking when it comes to lease-purchase programs.
While I’ve been something of an advocate for drivers utilizing the lease-purchase option to become owner-operators, I also point to the common pitfalls of these programs. I know them well after hard-lived lessons learned, having participated in them myself. After attempting nine different programs with nine different companies in 17 years, I was only able to be truly successful in two.
Barlow Truck Lines out of Faucett, Missouri, delivered the first success I had. Quality equipment, consistent miles, a profitable contract. It was the first time after three previous tries that I could actually build something resembling equity in the truck. When I had a blown engine, the company worked with me to transfer the time and money I’d put into that rig onto a newer truck and, in the process, reduce weekly truck payments, increasing my profit margin.
What they offered is something many companies offer, but what they followed through with was much more important: honesty. I left them not because of anything they did. My departure was just a byproduct of circumstance -- where I was at that point in my life. When I did leave, I did not go to another trucking company. Rather, I worked in brokerage and then went on to other new opportunities.
[Related: Killing the 'viruses and parasites': How to spot a bad lease-purchase deal]
Ten years later, when I returned to trucking behind the wheel, I went back to work as a company driver to get my feet wet again. I then tried a lease-purchase with a new company recommended to me by a family member, Rockin’ K in Lamar, Missouri. That proved to be a bad move. Another program with Waller out of Excelsior Springs, Missouri, then followed in the same vein, after I wasn’t paid for two loads in a single week – the company said I pulled the wrong trailer from point A to point B in each instance. Yet checks and balances at both the shipper and receiver, I felt, made that impossible.
I moved on to Christenson Transportation out of Strafford, Missouri. They proved to be the best company I have ever worked with. Don Christenson and his team go above and beyond to ensure their lease operators succeed. Every driver has a personal invitation from Don to sit down in his office with any concerns or issues. Every Monday, the team reviews the previous week for each operator to make certain none has two bad weeks in a row. Not that bad weeks were common, but this is trucking. Like every company in recent years, they had issues with newer engines and increases in maintenance costs and frequency, but they worked with me to ensure my success.
I left because of a personality conflict and my own desire to maintain my peace, not because of their program.
However, two good apples doesn’t make a bushel. The Pennyslvania-based Presto company’s lease-purchase program provided my very first experience in the trucking world, and it taught me some very hard lessons. I spent my money like it was water and learned only after three years of commitment to the truck that I would never be successful as an owner-operator if I did not know my numbers.
The experience also forced me to set rules:
- Don’t lie to me.
- Don’t nickel-dime me.
- Don’t cheat me.
Those three rules have followed me through the rest of my carrier, and when one is broken, I quickly walk away. My experience at Burlington Northern in their lease-purchase program also gave rise to another rule: never accept consistently bad miles. This comes from knowing your numbers and how much paycheck you desire to take home weekly. The longer you are willing to accept bad miles and go without a check, the more you’ll be paying truck bills for the company and building their fleet instead of your own.
While somewhat rigid, these rules/personal boundaries have helped me avoid wasting too much time and effort with a bad company. Fundamentally, it all starts with that first rule: if a company will lie to me, they’ll likely break the other rules, too. I don’t want to be in business with such a company.
Case in point, Rockin’ K and Presto’s programs taught me to be wary of percentage contracts -- 75% of the load only pays 75% if the people you’re working with at the company are honest about how much 100% of the load happens to be.
On the miles front, all I accomplished in brief stints in the programs of Maverick (Arkansas), Burlington Northern (Indiana), and Freymiller (Oklahoma City) was to pay the truck’s bills, not taking home much income to speak of. I didn’t stay long. My time in Hirschbach’s program, too, was very short-lived; it ended with me stranded 450 miles from home with all of my belongings from the truck and two dogs.
Why did I keep trying with all of these bad experiences? How can I be an advocate for lease-purchase programs? I don’t feel like an advocate for them, truth be told -- I’ve simply tried to use my experiences in hopes of warning others about the potential pitfalls. Yet because of the good experiences, I know these programs can help drivers become owner-operators when administered with honesty. While I was with Christenson, I met several drivers who succeeded in obtaining their trucks' titles and even one who had built a small fleet and leased those trucks back onto Christenson.
[Related: The truck lease-purchase model: Should we drive a stake in its heart?]
I agree with the FMCSA’s Truck Leasing Task Force, as I’ve said before, that control should not be left solely in the hands of the carriers who administer lease-purchase programs. Outside companies would best be utilized by drivers wishing to lease equipment as a stepping stone to ownership. I also feel drivers should do more on their own before they make a jump to lease a truck. Take the time to learn the industry, know your freight niche, learn travel lanes and rates for those lanes, learn your numbers, take some business courses, build relationships with diesel techs and brokers, and work on your credit rating.
The better that last one gets, the less necessary a lease-purchase program is as a step toward truck ownership at all. Build a nest egg for a down payment, get financed and with a good business plan in place, and an owner can maintain more complete control of the equipment.
I am writing all of this because the Truck Leasing Task Force recently recommended in its final report that the practice of lease-purchase by motor carriers should be abandoned. Carriers who build their fleets by offloading payments and maintenance on aspirational owners without any real income upside for the operator, or who profit through otherwise dishonest practices... Such companies’ programs certainly need increased scrutiny.
The leasing task force also suggested Congressional oversight of these programs, in lieu of totally banning them. Whether your experience mirrors mine or not, share it -- legislators and regulators in my view need to know who the bad actors are. The good ones, too. There are in fact fundamentally honest companies that work hard to help their lease operators be successful.
Rather than just banning carrier lease-purchase, perhaps we should take a cue from the apple industry and take the bad or imperfect apples to the press to become juice, or cider, so that something good might ultimately come out of them.
[Related: Carriers' lease-purchase programs 'meaningful' for at least half of lessee operators]
