how to work as owner operator in Australia #own #truck

Summary

The speaker shares his experience as a subcontractor in the trucking industry, emphasizing the challenges of buying a truck before securing work. He advises against rushing into truck ownership, recommending industry experience first. The video discusses the financial implications of truck repayments, insurance, tolls, and fuel costs, highlighting the importance of finding reliable work with a reputable company before committing to such a significant investment. The speaker's personal story serves as a cautionary tale, illustrating the potential for significant financial loss if not properly prepared.

Takeaways

• 🚚 The speaker started as a subcontractor in the trucking industry in 2017, buying a used MAN 540 truck for around 110k with a 20k deposit and monthly repayments of 2100.
• 💼 The speaker's initial research indicated that working in container work with crane trailers could yield a decent income, potentially earning over 4000 per week.
• 🔍 The speaker made the mistake of buying the truck before securing work, which led to a delay in finding suitable employment and financial strain.
• 💼 The first job found was not ideal, pulling someone else's side loader, earning only 65 dollars per hour after paying for the side loader, which was insufficient to cover expenses.
• 💸 The speaker ended up earning less than 3000 per month after major expenses, leading to the decision to sell the truck at a significant loss.
• 🚛 The speaker advises not to rush into buying a truck and becoming an owner-operator, emphasizing the importance of understanding the industry and its challenges.
• 🔧 The choice of truck is crucial, with some preferring American trucks for easier repairs and others valuing comfort and modern features.
• 💰 The cost of buying a truck post-pandemic is high, with repayments being a significant financial burden that needs careful consideration.
• 🏢 Finding work with a reputable company that provides minimum work hours and covers tolls is essential for success as an owner-operator.
• 💼 Major expenses for owner-operators include insurance, fuel, tolls, and truck repayments, which can significantly reduce net income.
• 🚫 The speaker warns against the misconception that becoming a subcontractor will drastically increase income, emphasizing the need for financial prudence and realistic expectations.

Q & A

What was the speaker's initial experience in the industry before buying a truck?

The speaker had three years of experience in the industry before deciding to buy a truck and become a subcontractor.

Why did the speaker choose a European truck for his business?

The speaker chose a European truck for local work and bought a five-year-old MAN 540 with over half a million kilometers on the clock because it was a decent option considering the income potential from the industry.

What was the financial arrangement for the truck purchase?

The truck was bought for 110k with a 20k deposit, and monthly repayments of 2100, which the speaker considered decent based on the income from the industry.

What was the expected income from the type of work the speaker was doing?

The expected income was around 75 dollars per hour, which could amount to over four grand a week, or 16,000 a month, based on a minimum of 50 hours a week.

Why did the speaker's business not work out as planned?

The speaker did not find work before buying the truck, and the job found afterwards paid less and provided fewer hours than expected, leading to income significantly less than the truck repayments and other expenses.

What was the speaker's loss when he decided to sell the truck?

The speaker lost his 20 percent deposit and an additional 12 Grand spent on a roadworthy certificate when he sold the truck at a loss.

What advice does the speaker give about rushing into becoming an owner-operator?

The speaker advises not to rush and to be in the industry for at least three to five years to understand it well before making the decision to become an owner-operator.

What are some factors to consider when purchasing a truck for business?

Factors include the type of truck (American or European), the age and condition of the truck, and the cost of repairs, with the aim to buy a decent, healthy, and roadworthy truck with low repayments.

Why is finding work with a reputable company important before buying a truck?

Finding work ensures a steady income and minimum work hours, which is crucial for managing expenses and repaying the truck loan without financial strain.

What are some of the major expenses an owner-operator should anticipate?

Major expenses include insurance, tolls (if not covered by the company), fuel, truck repayments, and potential repairs or services.

What is the speaker's perspective on the impact of buying a truck on one's life?

The speaker believes that buying a truck and becoming a subcontractor is not a life-changing milestone that drastically increases income, but rather a step that requires careful financial management and patience.

Outlines

00:00

🚚 Becoming a Subcontractor: A Personal Experience

The speaker shares their personal journey of becoming a subcontractor in the trucking industry. They recount purchasing a second-hand MAN 540 truck in 2017, which was a significant financial commitment with monthly repayments of 2100. Despite initial research suggesting a decent income from container work, the speaker struggled to find suitable work, resulting in lower earnings than expected. They ended up selling the truck at a significant loss, including the initial deposit and additional costs for a roadworthy certificate required for the sale in Victoria, Australia. The paragraph serves as a cautionary tale about the financial risks involved in becoming an owner-operator without securing work first.

05:02

📝 Advice for Aspiring Owner-Operators

The speaker offers advice for those considering becoming owner-operators, emphasizing the importance of not rushing into buying a truck. They suggest gaining industry experience to understand the market and make informed decisions. The speaker discusses the considerations when choosing a truck, including the preference for American trucks due to perceived ease of repairs or European trucks for comfort. They stress the importance of managing finances carefully, especially during the initial years of truck ownership, to avoid financial strain. The speaker also advises finding work with reputable companies that can guarantee minimum work hours and cover toll expenses, which can be a significant additional cost.

10:04

💰 Financial Considerations for Owner-Operators

In this paragraph, the speaker delves into the financial aspects of being an owner-operator, highlighting the major expenses one should consider. These include insurance costs, which can be high due to the comprehensive coverage required by companies, and the cost of tolls, which should ideally be covered by the employer. The speaker also mentions the expenses related to fuel, which can be substantial, and the truck repayments, which can significantly impact the net income. They provide a detailed breakdown of potential earnings and expenses, illustrating that after accounting for all costs, an owner-operator might only take home a modest income, which could be less than what they could earn as a company driver. The speaker concludes by urging viewers to carefully consider these financial implications before committing to the role of an owner-operator.

Keywords

💡Subcontractor

A subcontractor is an individual or business that contracts with another company (the prime contractor) to perform a specific part of a larger project. In the context of the video, the narrator became a subcontractor by purchasing a truck to perform local work, which is central to the theme of the video discussing the challenges and considerations of being an owner-operator in the trucking industry.

💡Owner-Operator

An owner-operator refers to someone who owns their own business and operates it independently, often in the context of trucking, owning and driving their own truck. The video's narrator shares his experience as an owner-operator, highlighting the financial and operational aspects of this role.

💡Truck Purchase

Truck purchase is the act of buying a truck for business purposes. The script describes the narrator's decision to buy a truck in 2017, which was a pivotal moment leading to his journey as a subcontractor and owner-operator. The financial implications of this purchase are a significant part of the video's narrative.

💡European Truck

A European truck refers to a truck manufactured in Europe, known for certain qualities such as build and design. The narrator mentions buying a five-year-old MAN 540, a specific model of a European truck, which had specific mileage and cost implications for his business.

💡Repayments

Repayments refer to the scheduled payments made to repay a loan or debt. In the script, the narrator discusses the monthly repayments for his truck, which were a significant financial burden and a key factor in his decision to sell the truck later.

💡Container Work

Container work involves the transportation and handling of shipping containers. The narrator mentions that the type of work he was doing involved side loaders and cranes, which are essential for handling containers, and this type of work is a central part of the trucking industry narrative in the video.

💡Hourly Rate

The hourly rate is the amount of money earned per hour of work. The video discusses the narrator's expectations of earning $75 per hour for his work, which is a key factor in determining his income and the financial feasibility of his business.

💡Roadworthy Certificate

A roadworthy certificate is a document that certifies a vehicle meets minimum safety and roadworthiness standards. The narrator had to obtain this certificate when selling his truck, which incurred additional costs and is a regulatory requirement in the context of vehicle sales in Victoria, Australia.

💡Insurance

Insurance in this context refers to various types of coverage required for a trucking business, such as comprehensive insurance for the truck, public liability, and workers' compensation. The video outlines the importance of insurance as a significant ongoing expense for owner-operators.

💡Tolls

Tolls are fees charged for using certain roads or bridges. The script discusses the financial impact of tolls on the narrator's business, emphasizing the importance of negotiating with companies to cover these costs as part of the contract.

💡Fuel Costs

Fuel costs refer to the expenses incurred from purchasing fuel for the truck. The video script mentions the narrator's fuel expenses, which are a significant and variable cost in the trucking business, affected by fuel prices and usage.

Highlights

The speaker discusses the potential pitfalls of becoming a subcontractor in the trucking industry in Korea.

Background provided on the speaker's experience as a subcontractor after purchasing a truck in 2017.

Speaker bought a five-year-old MAN 540 truck for 110k with a 20k deposit and monthly repayments of 2100.

Based on research and experience, the truck was expected to earn a decent income with container work.

The mistake of not securing work before purchasing the truck led to financial struggles.

The job found was not ideal, resulting in lower earnings and difficulty meeting truck repayments.

The speaker ended up selling the truck at a significant loss, including the deposit and roadworthy certificate costs.

Advice given to not rush into becoming an owner-operator and to understand the industry well before making the decision.

Importance of choosing the right type of truck, considering factors like comfort and ease of repair.

The current market price for a decent used truck is around 150-160k, post-pandemic.

Becoming a subcontractor is not a life-changing milestone and requires careful financial management.

The need to find work with a reputable company that provides minimum work hours and covers toll costs.

Major expenses include insurance, tolls, fuel, and truck repayments, which can significantly impact earnings.

The speaker emphasizes the importance of having low repayments for a manageable life as a subcontractor.

The potential for high insurance costs due to the requirements of comprehensive coverage.

The impact of fuel costs on overall earnings, especially with the rise in diesel prices.

A summary of the financial considerations and potential challenges faced by owner-operators.

Encouragement for viewers to ask questions and engage with the content for further insights.

Transcripts

it might uh

sound like an interesting topic and some

people might see it as an

as a milestone in the Korea but I'm

gonna discuss this uh

further and you might have a different

opinion at the end of this video

[Music]

foreign

[Music]

all righty first of all I'm gonna give

you a bit of background about myself and

my experience as a

subcontractor Sabi owner opera or

whatever you call it

um bought myself a Prime movie in 2017 I

was only uh

three years into the industry at the

time and uh

yeah I decided to buy a truck and become

a subcontractor and since uh I was going

to do local work I went for a European

truck I bought a five-year-old man 540

which had a just over a half a million

K's on the clock

and I bought it for like 110k

and I paid 20 deposit and my repayments

worked out at 2100 every month which was

a pretty decent considering uh the

income because

based on my research and my experience

back in the day even today

uh in the industry uh industry that I'm

working in container work and the type

of work that I was doing uh with my

truck a side load of work those trailers

with a set of cranes I explained them in

uh previous videos yeah they pay 75

dollars per hour

so if you get like minimum hours at

least 50 hours a week

well the pie will be pretty decent

you'll be getting away with almost uh

for four grand or just over four grand

which is a decent income

and uh in a mountain time you're gonna

have like about 16 you're gonna have 16

000. so um

that was my repayment but

my mistake was that I didn't find work

before buying the truck so I bought the

truck and then started started to seek

out for work which took me about a few

months and the job that I found was not

that ideal I was uh

pulling somebody else's side loader and

working for that company they were in

aggregate I was getting paid 85 dollars

and uh if I can judge my mind I was

paying twenty dollars per hour for the

side loader so I was only getting 65

dollars which was not even enough and

they were even hardly giving me uh 40

hours a week so things didn't work out

the way I wanted I was just getting less

than three grand over

a month after my

major expenses not including the repairs

or service or anything just paying off

the the rate for the side loader trailer

paying for my fuel paying for my toll

and yeah that's how much I was ending up

with and I was like even if I work as a

medium rigid driver I will be making

more money so that's why I went like

really crooked and sold the truck and

that was a big loss for me I lost my 20

percent deposit I lost another 12 Grand

that I spend on

a roadworthy certificate when I sold it

because in Victoria in Australia when

you sell a truck normally uh you need to

provide a certificate of roadworthy that

meaning that your truck is or your

vehicle is up to the road standards and

there's nothing wrong with it so yeah

that was a big loss for me and that was

my experience

working as a owner operator

yeah but and uh now explaining this to

you my first piece of advice to you is

no is that no don't rush never rush oh I

try to be in the industry for at least

three four or five years so you know

enough people in the industry you know

all the ins and outs so you can just

make a proper decision first step to

become an owner operator is purchasing

your own truck and that can be a pretty

challenging task to do because people

have different opinions Some people

prefer American trucks because they

believe like there's not much computers

on board so the repairs are gonna be

like somehow easier they can take their

truck to any mechanic and get it and fix

some people say oh we don't worry about

that one we just want a comfortable

truck which is more of my my type yeah

we just want to be comfortable so that's

all a choice that you you need to make

on your own but generally when you want

to buy a truck

you want to buy something decent like

light models so you don't have to like

pay too much for repairs and things like

that yeah and in my case as I said I

gotta I got something like five years

old

yeah if you want to buy something like

that and at this time post pandemic

you're gonna pay at least like 150 160

000 so your repayments are gonna be uh

quite high but

let me tell you this buying a truck

becoming a subcontractor

is not going to be a milestone in your

life like it's not going to change your

life and all of a sudden you get like

twenty thousand dollars a month like you

get away with uh 15 grand after your

expenses and things like that no that

doesn't mean uh no that's not gonna be

the case what it means is

you can just you know somehow manage

your finances and you know be a bit

Thrifty for the first five years so you

can pay off your truck and after five

years that is the time that you can take

the big chunk of your income home and

make it uh you know put it towards your

saving or whatever

so always keep this in mind when you

commit to purchase a truck always keep

in mind you have to buy a decent truck

that is healthy is roadworthy and you

gotta end with not much of uh

and you gotta end up with a pretty low

repayments so you can have an easy life

otherwise you'll be in trouble like for

five years even if you sell your truck

or you want to pay it off and get out of

that business uh before the five years

you're gonna lose a lot of money uh just

as I did in my case

[Music]

the second thing you gotta do is the uh

the second thing you gotta do is just to

find work with a decent reputable

company that can give you uh the minimum

work hours every single week and plus

you gotta make sure that the company is

the one to pay for the tolls because if

they put the toll on you it's gonna be a

major expense for you because you know

Melbourne has a big Metropolitan City

it's got a lot of toll roads so if you

are the one to pay the tolls you're

gonna end up paying so much every month

try you're gonna try uh to find work

with a good company before committing to

buy the truck if you do it other way

around like uh just as I did in my case

you're gonna lose a couple of months of

work give you a bit of run down so you

could have an idea of what you're gonna

be looking at your major expenses are

gonna to be number one your insurance

which is gonna be really high because

the companies you will be working with

they're gonna ask you for comprehensive

insurance of your truck

public liability

workers compensation policy which is uh

for your safety in case you get injured

or something you can still get paid by

work safe

and then they will get you to uh have an

insurance policy for their trailer as

well as all the goods inside the

container or all the goods you will be

carrying for them so this is gonna be a

have the repayment monthly repayment

which in my case back in that back in

the day it was affordable I was paying

only 1100 a month but I was inquiring

for another friend of mine two years ago

and I was quoted the

2400. now the expense you're gonna have

is uh the toll which as I explained

before you're gonna make sure you put it

on the company if they put it on you

that's gonna be a major expense uh to

you so you're gonna at least pay 1500 or

2 000 a month imagine uh based on what I

said if you earn like four grand a week

in ideal conditions that's gonna be like

about 16 Grand a month

and if you pay at least back in the day

I was paying 700 for fuel but that was

when uh diesel was the one dollar for a

40 or 50 cents but nowadays it's always

over two dollars so you're gonna have at

least three thousand dollars a month for

your fuel another 2 000 for your

insurance I'm just giving you the

average price

that will be five and then if you pay 2

000 for your toes as well that's gonna

be seven so you'll be uh

you'll have another nine but that's not

even including your truck repayment so

if you get something like what I got

back in the day two thousand dollars for

your truck repayment that's already nine

so you're gonna take home only like six

grand and that's just after major

expenses not including any uh possible

repairs or service or things like that

so you gotta be really careful and work

things uh out uh in a way that you don't

get in trouble otherwise you're gonna

pay most of your income for all the

expenses that I mentioned and there will

be only like five six grand for you

which you can easily earn it as a

company driver this was uh what I could

come up with for this video I tried my

best to explain everything to you if you

got any question in mind if you reckon I

missed something please uh leave me a

comment uh

down below this video or any of our

other videos and uh

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you in my future videos peace