Hotshot/delivery lease agreement questions... - Diesel Forum

Archie · 04-21-2006, 01:04 AM

After a couple of decades in the same office, followed by a pending business opportunity that's now on hold for at least another year, I've been considering working with my truck (already been through the DOT medical, drug test, etc.), and was wondering if a few of you pros could shed some light on the following language contained in a lease agreement....

The paragraph titled "Exclusive Use" says that the company "shall have exclusive possession, control and use of the leased equipment for the duration of this lease agreement" (five years). It also says that the leased equipment (my truck) can ONLY be used for the transport of the company's authorized shipments. The paragraph is long and adamant. Its gist can be summed up by saying that the truck's owner is simply not allowed to use the vehicle for private/personal reasons of any kind. No passengers, other drivers, nothing at all is apparently allowed - outside of hauling for the company.

Is this an industry wide standard? I see guys driving F250s and 350s for various delivery/hotshot companies all the time around the Gulf Coast. Have all of them basically signed over their trucks full time to the freight companies? Or does this vary by company? I need the vehicle for use outside of work. Passengers, personal hauling, long trips, my sweetie needs to drive it on occasion, all the usual things, so I can't be limited to "owning" a truck that effectively belongs to someone else, not to mention the fact that the pay doesn't exactly merit these demands.

There's plenty of other fairly imposing text in the agreement, but I'd really rather run it by someone in the business in person, so if any one of you Texas Gulf Coasters is willing, lunch is on me! [img]/ubbthreads/images/graemlins/biggrin.gif[/img]

Anyway, thanks for any and all advice.

CaptRon · 04-21-2006, 08:41 AM

Archie,
Sounds like this is aimed at the guys with Class 7/8 trucks and may be part of a standard lease used by companies running that size trucks. This language is known as "Boiler Plate" and is standard stuff that appears in any type of lease or contract.
If you haven't already you might jump over to HotShot Haulers and ask those guys.
This lease clause is intended to keep you from going out and getting your own loads and running them under their authority and cutting them out of the money. Also to limit their liability for injury or death of passengers.
So yes, they effectively own the control of your truck. That's one of the reasons that drivers spend the money and do the paperwork to get their own authority.
Do you have a trailer or are you going to be hauling campers or horse trailers? If you will be using a company trailer then so much more the reason for this clause.
It's been a while since I've been involved with all of this but the real test of the lease is when a problem arises. The last time I ran under a lease I used the tractor like my car and never had a problem but then I didn't carry any passengers...ok, maybe once or twice. Even went 150 miles while waiting for a load to visit my son and then back when a load became available 10 miles from my last drop, woops! That cost me a little even when fuel was $1.10/gal but it was worth it.

Good luck,
Capt Ron

Archie · 04-21-2006, 01:31 PM

I don't have a trailer and am not aware of any requirements to pull a "company" trailer, but wouldn't have any problem doing so. Anyway, this company leases big rigs, too, so that might be what's happening, but it doesn't make the language any less palatable to me - with my little ol' F-250.

Thanks for the link, Capt Ron. I went ahead posted over there, too.

mgraveman · 04-21-2006, 02:07 PM

You really need a dually to do much of anything like you want to do. A 450 or 550 would be the best in this size.

You just can't take a very heavy trailer legally with that truck. Campers would be out of the question, although empty cargo trailers may still be an option for you.

Archie · 04-21-2006, 02:14 PM

Yea, but no worries in that regard as trailers aren't part of the job description. I was only responding to Capt Ron's question about 'em, and in saying that I wouldn't mind pulling, I'm only speaking within the limits of the truck.

444turbodiesel · 04-23-2006, 01:25 AM

A few questions you need to ask...

What % are they paying? Or how much per mile?

Are you paid by odometer or map miles?

Are they getting a fuel surcharge? If so, do you get 100% of it?

Are they charging you for the commercial liability insurance or is it included in the %?

How do they pay (instant, weekly, semi-weekly settlements?)

Do they advance? If so, what fees are charged for this?

Do they have discount fuel cards?

Do they have company owned trucks? If so, are they hauling the same freight as you?

JimTJr · 04-23-2006, 07:44 AM

[ QUOTE ]
Are they getting a fuel surcharge? If so, do you get 100% of it?

[/ QUOTE ] AMEN on that, I have heard of some of the "Brokers" or Lease companys,(Two different animals I know) charging the customer a fuel surcharge,,then not wanting to give it to the ONES BUYING the fuel!! [img]/ubbthreads/images/graemlins/rolleyes.gif[/img]
For Hotshot information try this forum,,
www.hotshothauling.com It is a slow moving forum,, guess there are not a ton of members there yet. But the information you will get is also very usefull.

RLDSL · 04-24-2006, 01:35 AM

OK, this is straining the gray matter from way back, but I used to have big trucks leased on to a few different companies , and you'll need to go over the specifics carefully, but the exclusions to passengers etc only refer to commercial activity when hooked to their trailer where the rig is under the company insurance, when unhooked , your personal vehicle insurance takes over( or in the case of big trucks,you have to purchase seperate "bobtail" insurance to cover the truck when not hoked to company trailer or involved in comercial activity.

Have a lawyer look over any lease agreement before signing, preferably one versed in trucking industry. It will be the best couple hours lawyer bill you will ever spend. Some contracts have things in them designed to break you and leave you owing them. Have said lawyer look over ALL documents they have before signing.

Some states have very loose regulations on carriers that underhandedly allow crocked companies to do strange things with leased vehicles...like borrow money against the things (Once the state issues plates in the carriers name, it's an open invitation. please don't ask how I know this, but I lost over 30 grand finding out the hard way )

----------Robert