Trucking Leagl Info

Owner-operator leases are the way to go if you are relatively new to the trucking industry. Leasing your truck and services to a particular carrier, frees you from the added duties and obligations of having full “Operating Authority”. The leasing option will allow you time to get that hands on experience, and begin to collect that regular paycheck. The carrier in turn handles your operating permits, trailers, fuel cards, stickers, worker benefits, loads, etc.

Carrier leases are governed by federal laws. In a U.S. Appeals court ruling, owner-operators have the right to sue carriers that do not comply with federal leasing regulations. As you become accustom to the inner workings of the trucking industry, you will with a doubt, either experience or witness the unscrupulous carriers at work. In the real world of trucking, some carriers will present a program to you that appears almost unbeatable. Don’t for a minute fall for any suspect sales pitch. Read that lease from top to bottom. If you are not comfortable with the legal language, get a copy of the lease from the carrier and present it to someone able to interpret it. Suppose the carrier does not want to give you a copy of the lease? My advice to you would be to move on. Remember, “Truth-in Leasing” laws entitle you to a copy of the lease before you sign it. Getting copies of leases from several prospective carriers might be a good way to comparison shop, and get yourself familiarized with the language. Thoroughly understand the implications of your lease, because even picking up that first load can get up legally caught up in thousands of dollars of litigation and fines, eventually driving you out of business. Never let pressure and haste be the deciding factor in whether you sign the lease or not.

Some important compensation issues can be found in the Written Lease Requirements of federal law 49 CFR 376.12:

*The carrier and owner-operator must sign one original and two copies of the lease. The carrier keeps the original, and you must keep one copy in your truck. Put the remaining copy in your personal business files.

*The responsibilities of the carrier and owner-operator must be clearly detailed in the areas of fuel, fuel taxes, deadheading, tolls licenses, base plates, permits, detention, and any unused allotments of those items.

*There must be clear language in regards to loading and unloading. The carrier must specify who will is responsible for the loading and unloading fees when required.

*Within 15 days after submission of paperwork for delivered loads, the carrier must pay the owner-operator. If you are paid on a percentage basis a copy of the rated freight bill must be received by you either before, or when you get paid. Any deduction specified on the lease may be deducted from the owner-operator’s settlement.

*The carrier must provide an accounting of escrow funds in either settlements, or once per month on a separate form. Items applied to escrow funds must be clearly stated, and the lease must also give the owner-operator the right to ask for an account of the funds on demand. The carrier must, by law, pay interest on the escrow funds they control. Deductions; final account of the funds; and the balance of escrow must be paid no later than 45 days after a terminated lease.

*Owner-operator may be responsible for decal removal, and return of carrier accessories before escrow is reimbursed.

*Lease termination must be in writing, and within any specified termination period.

The duration of your lease can be a factor in compensation also. Try to avoid lease agreements of three months or more. This can be critical if the carrier you lease on to does not quite meet your expectations. This leaves you stuck with them for at least one year, in an unprofitable environment. Terminating early could also cost you if escrow was being deducted from each settlement. The best option in this case would be to seek a month-to-month lease, giving you the flexibility to move on after giving adequate termination notice.

Paying for your own base plates and fuel tax will pay rewards because some carriers charge a flat rate, failing to give an accurate accounting, and any refund for overages. Unsure of any aspect of trucking?,…research even the most sound advice.

Always remember the document you put your signature on is a legally binding contract. That is why it’s your imperative duty to question all misunderstood items on the agreement.