Going independent

[Vtro]

Hey guys I'm new here and will be asking real basic and simple rookie questions, thanks for bearing with me I'm just trying to get as much info as I possibly can.
I'm thinking of getting me a sprinter 2500 van and going independent without leasing on to any companies, what does it take to get it out on the road legally ?
Do I need to create a business name and legal entity first?(llc, Corp, etc)
Will I/can I resister the van on my business name or does it have to be on me personally?
Will I need to get commercial plates on the sprinter?
Do I need to get my own authority? I will be using a broker by the way. If I need to get my own authority, will I need to display the us dot number on my van?( apparently with the new urs system they don't give out mc numbers anymore but everything is tied in to the us dot number)
If I get my own authority will I be subject to dot audits and will need to have a drug program implemented, etc?
Now let's keep in mind that I want to maximize my profits and don't want to be pulling into weigh stations and logging, since my vehicles gvr is under 10k anyways I don't think it qualifies as a "commercial vehicle", I could be wrong though. Seems to me if I will have us dot number on my van, it will seem as a commercial vehicle to some cops and I will get hassled by them if I ever go past a weigh station. By the way I'm in Northern California and have driven a semi truck if that helps, thanks a lot guys for the input.

 

[vanspek]

Use the search functions. You have A LOT to learn!

 

[Vtro]

I guess I'm in the right place lol

 

[Vtro]

The other posts on here that I was looking through seemed to be giving me different and mixed answers

 

[tknight]

You will have to have commercial plate and commercial insurance for sure I agree you have a lot to read and learn

 

[Vtro]

With commercial plates will I need to pull in through weight stations that say "all commercial vehicles" need to stop? Or something similar. Thanks for the input

 

[tknight]

Generly rule of thumb is over 10k gvw but I've seen some states 8k and over
That's part of your homework!

 

[Turtle]

License plates deal with the amount of taxes you pay to the state to register the vehicle, and has nothing to do with making the vehicle into a Commercial Motor Vehicle. The signs that say "all commercial vehicles" need to stop are referring to heavy trucks, buses and HAZMAT placarded vehicles, not pest control and plumbers vans and office supply delivery Smart Cars, which also have commercial plates in most states.

The DOT regulates Commercial Motor Vehicles, which is different than mere Commercial Vehicles.

 

[Vtro]

Ok that's kinda what I was thinking myself, thanks for the input. Another question I have is, is there a difference between an owner operator and a carrier? My understanding is An oo that's leased on to a company without own authority will get 1099ed and the end of the year, and one with own authority is a carrier, am I right? So does the contractor have to register a business name? Sorry for the basic questions, the reason in asking is cuz I read on here that one guy was running his van as a personal vehicle and said he was invisible to the dot which I find kinda shady

 

[Turtle]

Another question I have is, is there a difference between an owner operator and a carrier? My understanding is An oo that's leased on to a company without own authority will get 1099ed and the end of the year, and one with own authority is a carrier, am I right?

More or less, yes. When you transport freight under motor carrier authority, whoever owns the authority is the carrier.

So does the contractor have to register a business name?

No. A few carriers want you to be actually incorporated as a distinct business, but as a sole proprietor of a one-truck business, you can simply get your 1099s under your own SS# instead of having to register for a separate tax ID.

Sorry for the basic questions, the reason in asking is cuz I read on here that one guy was running his van as a personal vehicle and said he was invisible to the dot which I find kinda shady

The DOT only regulates Commercial Motor Vehicles, so any vehicle under 10,001 pounds is effectively invisible to the DOT, at least in terms of FMCSA enforcement. If someone with motor carrier authority is running their own van under their own authority, they must have the DOT number on the sides of the vehicle, though.

 

[Vtro]

Ok that makes sense, thanks for the Info turtle, eventually I would like to add more vans and hire drivers if business goes good of course, which in your opinion would be better to register, Corp, llc, etc since I know those get taxed differently?
And generally speaking as a independent sole proprietor one van expediting show, do you need own authority in general to haul freight across the whole country in a vehicle under 10k?

 

[Turtle]

Don't get too far ahead of yourself. Unless you know where your freight is going to come from, and already know there will be a lot of it, it's not likely to go nearly as good as you think it will. Currently the expedite market is flooded, overly-saturated by a wide margin, with cargo vans and Sprinters, making the freight few and far between and the rates so low that it rivals US Priority Mail rates. The toast isn't just buttered too thin with all these cargo vans, the toast is being shown a picture of a pat of butter and told to think buttery thoughts.

 

[BigStickJr]

That turtle sure has a way with words.

 

[Vtro]

I understand it's a though business to get into but you have to start somewhere.

 

[Turtle]

I understand it's a though business to get into but you have to start somewhere.

Based on your questions and statements thus far, I don't think you understand at all that it's a tough business to get into. In fact, it's an astonishingly easy business to get into, especially with a cargo van, which is the very reason the industry is overwhelmed with cargo vans resulting in way more vans than loads, which has pushed the rates down to ridiculous levels. Loads that a year ago paid $1.00 and $1.10 per mile are now playing $0.60 to $0.70 per mile.

Just yesterday I was offered a 1400 mile load that paid 55 cents per mile. I turned it down. Someone else took it. I don't know exactly who took it, but I guarantee you they don't have a clue what their CPM is. If they have a van payment their CPM is likely pushing 50 cents.

The difference between your CPM and the rate is your profit, your salary. What's your time worth? If you can manage to get 1500 miles a week on average, which is tough to do anymore, at a 20 cent per mile profit, that's a whopping $300 before taxes. Go yacht shopping.

That's why I said you need to already know where your freight is going to come from, and already know there's going to be a lot of it, meaning this broker of whom you speak needs to be one that you have already had extensive conversations with and you know what you're getting yourself into. The broker needs to have access to some pretty exclusive freight that's not subject to the open bidding process, otherwise you're about to drive headfirst into a rude awakening. If you hope to have any chance of surviving out here, your van needs to be fully paid for before you accept your first load.

 

[Vtro]

I agree, it's hard to make money when the load only pays .60-.70 cents a mile

 

[xiggi]

Imagine trying to split that with a driver in a van your maintaining. Honestly the last thing this business needs is more vans. At this point it's kind of like trying to extinguish a fire with gasoline.

 

[danthewolf00]

Your going to be better off driving a straight truck for somebody else and learn the ropes before going out on your own.

 

[MikeDamone]

If they have a van payment their CPM is likely pushing 50 cents.

your van needs to be fully paid for before you accept your first load.

But shouldn't someones CPM be the same regardless if they have a payment or not? For example, person A and person B have the exact same van. Person A bought his outright, person B has a payment. They still cost the same ( minus intrest for person B ) so unless someone gave person A his van for free, shouldn't he still factor the cost of his van into his CPM thus leading to the same CPM for both?

 

[fastman_1]

But shouldn't someones CPM be the same regardless if they have a payment or not? For example, person A and person B have the exact same van. Person A bought his outright, person B has a payment. They still cost the same ( minus intrest for person B ) so unless someone gave person A his van for free, shouldn't he still factor the cost of his van into his CPM thus leading to the same CPM for both?

I would say no, van A was paid for up front so his return on investment begins with first load van B puts a down payment on van and has payments for X amount of months, so he needs to cover that payment so his cost will be more. He would need to make more to be able to make the same as Van A, also Van B needs full coverage insurance Van A can get by with Just Liability. My last 2 vans were bought outright.