A

accounts payable or payables: amounts owed by a business to its creditors.

accounts receivable: amounts owed to a business by customers as a result of extending credit to those customers.

adjusted gross income or AGI: income on which an individual computes income tax. For a sole proprietorship, AGI minus deductible business expenses equals amount taxed.

advance: money paid to an owner-operator before he hauls a load. The money is typically subtracted from an owner-operator’s next settlement.

aerodynamics: refers to the action of air on an object. Referring to an aerodynamic truck, it means that the truck is designed for minimal air resistance.

agent: a person or organization authorized to conduct business on behalf of another person or organization; a common carrier that appoints agents to secure freight on behalf of the carrier. In some cases, an agent also works directly with the owner-operator to match available freight with his truck. Typically, agents are independent contractors, not employees of the carrier. A leased owner-operator is also an agent of the carrier.

asset: any type of property, personal or real, that can be sold (converted to cash) within one year.

authority: see operating authority.

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B

backhaul: return trip.

balance sheet: a document that lists all of a person’s or firm’s assets and liabilities.

bill of lading: itemized list of goods contained in a shipment.

bobtail: a tractor without a trailer attached. Also called a straight truck.

bobtail insurance: insurance that is valid when a trucker has an accident while running without a trailer.

budget: a document that lists income and expenses and enables a person or business to allocate available cash among various expenses; see cash flow statement.

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C

capital: net worth; money available to invest in equipment that will produce more money over time.

cargo insurance: insurance that covers damage to or loss of freight. Carriers typically provide cargo insurance for leased operators. Owner-operators with their own operating authority have to provide their own cargo insurance.

carrier: short for motor carrier; also, trucking company.

cash flow: the difference between cash brought in and cash paid out.

cash flow statement: a document that shows cash in and cash out during a specific period; see cash flow.

chargeback: item(s) in a leased owner-operator’s settlement for which the company pays but later deducts from the trucker’s pay.

claim: a charge against a carrier made by a shipper or other party for lost or damaged freight allegedly caused while the freight was in the carrier’s possession.

collateral: a pledge of security for borrowing money; something that a lender can seize if the borrower defaults on the loan agreement.

Commercial Driver's License (CDL): License which authorizes and individual to operate commercial motor vehicles and buses over 26,000 pounds gross vehicle weight. For operators of freight-hauling trucks, the maximum size which may be driven with a CDL is Class 6.

commodity: goods shipped; most often general commodities, a loose description of a wide variety of freight.

common carrier: a business with the primary objective of providing transportation services over regular or irregular routes. For interstate operations, only the U.S. Department of Transportation can issue common carrier authority; see contract carrier.

company driver: the company driver pays all of the expenses involved in operating a truck.

consignee: the person or firm to whom freight is shipped; also, receiver.

contract carrier: a trucking company that engages in for hire transportation of goods under contract with one or more shippers, as opposed to a common carrier, whose services extend across the entire universe of shippers.

corporation: a legal business structure in which the company is separate from its owners. A corporation enjoys tax benefits and legal protection not available to other forms of business; see C corporation and S corporation.

cost per mile or CPM: the cost of operating a trucking business per mile traveled. CPM is calculated by dividing a cost by the number of miles driven and is usually expressed in cents.

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D

deadhead: travel without a load; pulling an empty trailer.

dedicated run: a run that involves hauling freight to and from the same locations on a regular basis; also, hauling freight to and from the same shipper and receiver on a regular basis, regardless of location.  Many drivers strive to get a dedicated run.  As a result, you usually have to wait a while before it’s offered to you.

deductible: money paid out of pocket by an insured before his insurance company pays a claim.

deductible expenses: business-related expenses that are allowable deductions from adjusted gross income and therefore reduce taxable income. Deductible expenses are reported on IRS Schedule C.

disability insurance: insurance that pays a weekly benefit plus medical expenses if illness or injury prevents the insured from working.

dispatch: a service that schedules and coordinates freight pickup and delivery; see dispatcher.

dispatcher: a person who schedules and coordinates freight pickup and delivery.

DOT or U.S. Department of Transportation: the federal agency that oversees and regulates common carriers, such as trucks, trains, ships and airplanes.

drop and hook:  taking an empty trailer into a shipper’s facility to drop it and then pick up a trailer that has already been loaded.

dynamometer: a device used to measure the performance of an engine and drivetrain. Also known as dyno or dyno test.

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E

EDI (Electronic Data Interchange): the business-to-business interconnection of computers for the rapid exchange of a wide variety of documents, from bills of lading to build tickets at auto plants.

electronic control module, ECM or ECU: a device on an electronically controlled engine that monitors engine performance and records some diagnostics.

endorsement: special qualification(s) required of CDL holders for hauling specific types of commodities or for operating specific types of equipment.

escrow: money held by a carrier in the name of a leased owner-operator to protect the company in case the contractor quits while in debt to the company to provide money for the owner-operator’s use in an emergency, or to reimburse the carrier for items paid for by the company on behalf of the owner-operator.

estimated tax: taxes paid by self-employed people. The IRS requires contractors to guess how much tax they will owe based on the previous year’s income or projections and to make quarterly payments.

exempt carrier: carrier that hauls commodities that are exempt from DOT economic regulation.

exempt commodities: freight that is not regulated by DOT. Unprocessed agricultural products (fresh fruit and vegetables) are the most common types of exempt commodities.

expenses: in record keeping or budgeting, areas of cost or spending.

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F

Federal Highway Use Tax: tax paid by all carriers for each vehicle that runs in interstate transport. Typically, a leased owner-operator pays his own tax. The tax is based on the size and weight of the vehicle and is reported on IRS Form 2290.

Federal Motor Carrier Safety Administration: part of the DOT, responsible for issuing, administrating and enforcing the Federal Motor Carrier Safety Regulations and the Hazardous Materials Regulations.

fingerprint a load or fingerprint: driver must unload the shipment themselves.

fixed costs: costs that do not vary by the number of miles run.

freight bill: see bill of lading.

fuel tax: tax levied on fuel by state and federal governments. The federal tax remains constant, but state taxes vary and are based on the number of miles run in a state.

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G

GAWR (Gross Axle Weight Rating): maximum weight an axle is rated to carry by the manufacturer. Includes both the weight of the axle and the portion of a vehicle's weight carried by the axle.

gross combination weight or GCW: weight of the tractor, trailer and cargo.

GVW (Gross Vehicle Weight): total weight of a vehicle and everything aboard, including its load.

GVWR (Gross Vehicle Weight Rating): total weight a vehicle is rated to carry by the manufacturer, including its own weight and the weight of its load.

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H

hazardous materials or hazmat: any substance the U.S. government has determined to be dangerous to public health when packaged or transported improperly.

home time policy: a company’s policy in regards to getting drivers home. Review these policies with great care.

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I

inbound: freight moving from one point to another.

income statement: see profit-and-loss statement.

independent: an owner- operator who has his own operating authority and is not leased to a carrier; see owner-operator.

individual retirement account or IRA:  a tax favorable retirement vehicle that allows an individual to contribute up to $2,000 a year. Contributions are tax deductible, but the payout is taxed at the rate at the time of payout; see Roth IRA.

insurance agent: a representative of one or more insurance companies. An independent agent represents more than one company; a captive agent represents only one company.

interest: the cost of borrowing money, expressed as a percentage, usually an annual percentage rate (APR).

intermodal transportation: movement of goods involving more than one mode of shipment on a single freight bill.

IVHS (Intelligent Vehicle Highway Systems): Blanket term for a wide array of technologies, including electronic sensors, computer hardware and software and radio communications. The purpose of IVHS is to increase efficiency of use of existing highways, reducing travel time, fuel consumption, air pollution and accidents.

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J

just in time: freight scheduled for immediate use at its destination.

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K

kingpin lock: a lock that fits over the kingpin on the trailer.  It makes it harder for someone to just back up to the trailer and take it.

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L

layover: non-driving time while under dispatch; can be a scheduled rest or time spent waiting for dispatch instructions.

LCV (Long Combination Vehicle): in general, vehicles longer than a standard doubles rig (tractor and two 28-foot semitrailers). Examples of LCV's which are permitted in some U.S. western states and eastern toll roads: twin 48-foot trailers, triple 28-foot trailers.

lease or lease agreement: a contract between an owner-operator and a motor carrier that spells out the responsibilities of each party and is signed by both.

leasing: an alternative to traditional equipment financing, whereby the lessee pays rent on the equipment and makes monthly payments; see TRAC lease.

lessee: the party to a lease agreement that has possession and control of a vehicle owned by another person or firm.

lessor: the party to a lease agreement that grants possession, control and responsibility for the operation of a vehicle to another person or firm.

less than truckload or LTL: multiple shipments on one trailer.

liability: outstanding debt.

liability insurance: insurance that covers property damage and bodily injury to another party, including bobtail, non-trucking use and unladen.

limited liability company or LLC: business structure that offers limited protection for the owners. Profits pass through the owners’ personal income tax returns.

limited liability partnership or LLP: new business structure not yet recognized by the IRS. LLPs are extremely flexible but are not recommended for owner-operators.

logbook: carried by truck drivers in which they record their hours of service and duty status for each 24-hour period. Required in interstate commercial trucking by the U.S. Department of Transportation.

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M

manifest: document describing the contents of a shipment; often incorrectly used interchangeably with bill of lading.

motor carrier: a person or firm that transports goods via truck.

mutual fund company: a company that pools the money of thousands of investors in stocks, bonds and other investments.

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N

net income: the amount by which revenue exceeds expenses; also called net earnings.

net profit: money left over after taxes and expenses.

net worth: the difference between a person’s assets and liabilities; also called owner’s equity.

no touch:  driver does not have to “touch” the load in regards to unloading it.

non-trucking use: liability insurance that covers an owner-operator when he is not under dispatch; sometimes is erroneously called bobtail insurance.

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O

occupational-accident insurance: insurance that pays an owner-operator a weekly benefit plus medical expenses if he is injured at work.

operating authority: operating permission granted to interstate common carriers by the U.S. Department of Transportation. When an owner-operator signs on with a company, authority automatically extends to the owner-operator.

operating costs: day-to-day costs of running a business; see variable costs.

operations: the department of a carrier responsible for finding loads, dispatching trucks and handling customer service.

outbound: freight moving away from a point to another point.

overage, shortage and damaged or OS&D:  someone in your company is in charge of OS&D.  You must call in if you have any of these conditions with your load before leaving the receiver – and in some cases, you must call before pulling away from their dock.

over the road or OTR: generally refers to any haul, trucking operation or driver that is regional or national.

overdimensional: freight that is legally too heavy, too long, or too tall and requires a special permit.

owner-operator: a person who owns and operates a commercial vehicle.

Owner Operator Independent Drivers Association or OOIDA: not-for-profit association for leased owner-operators and independents.

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P

P & D: pickup and delivery

partnership: business owned by two or more people. Each partner is taxed individually.

payload: weight of the cargo as the basis for the revenue to be paid for that load or shipment.

peddle run: truck route with frequent delivery stops.

per diem: amount of business expenses a person can claim each day without those expenses being taxed as income; commonly applied to meals.

physical damage insurance or PD: insurance that covers damage to an owner-operator’s equipment due to an accident involving another vehicle.  The law does not require a truck owner to have physical damage insurance, but the lien holder usually does.

preventive maintenance or PM: system of regularly checking and caring for equipment to reduce the number of repairs.

primary liability insurance: insurance required by law to protect the insured in case of damage to property or injury to another person. Carriers are required to have such insurance, and may deduct an amount from an owner-operator’s settlement to cover its cost.

private carrier: company that transports its own goods over the road.

profit and loss statement, P&L or income statement: detailed report of how much money a business made or lost over a specific period.

progressive shifting: fuel saving driving technique in which the driver shifts gears by accelerating just enough to gain the minimum rpms to shift into the next gear.

pro number: identifying number on a freight bill for invoicing and tracking purposes.

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Q

qualified retirement account: a bank account set up by an individual as a retirement plan that adheres to IRS rules. In most plans, contributions are tax deductible, but payouts are taxed at the person’s tax rate at time of retirement.

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R

recruiter: person who finds new drivers and owner-operators to work for or lease to a trucking company.

reefer: refrigerated trailer.

relay driving: common practice in the less-than-truckload industry, in which one driver takes a truck for 8 to 10 hours, then turns the truck over to another driver, pony express style.

residual value: in a TRAC lease, the amount owed to the lessor at the end of the lease; similar to a balloon note.

retirement account: account devoted to saving money for retirement; see qualified retirement account.

revenue: income.

rider policy:  a policy the company you are leased to might have that allows someone not employed by the company to ride along with you.

risk management or insurance department: a carrier function that monitors and controls the carrier’s exposure to risk, usually from truck accidents.

Roth IRA: Individual Retirement Account that allows an individual to contribute up to $2,000 a year. Contributions are taxed at the current rate, but payouts are tax free; see Individual Retirement Account.

runaway truck ramp: emergency area adjacent to a steep downgrade that a heavy truck can steer into after losing braking power. Usually two or three lanes wide and several hundred feel long, the ramp is a soft, gravel-filled pathway which absorbs the truck's forward momentum, bringing it to a safe stop. Depending on the ourrounding terrain, the ramp may be level or run up or down hill.

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S

S corporation: legal business structure designed for small businesses. To qualify, a business must have 35 or fewer shareholders. To maintain status, the business must follow certain guidelines.

Schedule C: IRS form that lists all business income and expenses. The difference (profit or loss) is reported on Form 1040. All sole proprietors must submit a Schedule C, “Profit or Loss Business Sole Proprietorship,” with their 1040.

self-employment tax: Social Security and Medicare tax for the self-employed.

settlement: an owner-operator’s net revenue. A settlement is a record prepared by a trucking company for its owner-operators that shows total revenue earned for the pay period, minus company charges to the owner-operator.

shipper: firm with which freight originates.

sleeper: Sleeping compartment mounted behind a truck cab, sometimes attached to the cab or even designed to be an integral part of it.

sole proprietorship: legal business structure in which one person is owner. This is the simplest way to structure a business and the method recommended for most owner-operators.

spec, spec’ing: slang for specification or specifying; a detailed description of a truck’s standard components and optional features; choosing standard components and optional features.

specialized carrier: motor carrier that transports a particular type of freight.

startup costs: costs associated with starting a business.

surcharge: charge in excess of what is usual or customary; can apply to freight rates, fuel prices or fuel taxes. A surcharge is usually assumed to be temporary.

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T

tandems: the two drive axles on a tractor.

time sensitive: high priority freight that if late results in an economic hardship to the receiver.

TRAC lease or terminal rental adjustment clause: vehicle lease that enables the lessee to keep the vehicle at the end of the lease, provided that he pays the lessor the vehicle’s residual value.

trade cycle: length of time between purchase and trade of a truck or trailer, based on factors such as balance owed, equipment age, maintenance costs and repair history.

traffic: department within a shipper’s organization that is responsible for coordinating transportation of goods.

traffic manager: head of the department within a shipper’s organization that is responsible for coordinating transportation of goods.

trip leasing: leasing a company's vehicle to another tranportation provider for a single trip.

trip recorder (On-Board Computer): cab-mounted device which electronically or mechanically records data such as truck speed, engine rpm, idle time and other information useful to trucking management.

truckload (TL): maximum weight legally allowed on a trailer or, when used in relation to freight rates, the minimum weight of a freight shipment necessary to qualify for a truckload rate; also, a full trailer load shipment described and controlled by one bill of lading; see less than truckload.

turn: round-trip freight run.

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U

under dispatch: insurance related term that determines when an owner-operator is covered by a carrier’s liability insurance.

unladen: relatively new type of liability insurance that covers the owner-operator when he is pulling an empty trailer, regardless of dispatch status.

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V

variable costs or running costs: costs that vary with the use of a truck, including fuel, repairs and road; see fixed costs.

VIN (Vehicle Identification Number): assigned by the manufacturer, this number is unique to each vehicle and appears on the vehicle's registration and title.

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W

wheelbase: distance, in inches, from the center of a truck's from hub to the center of the space between its tandems.

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Y

Yard Tractor (Yard Mule): special tractor used to move trailers around a terminal, warehouse, distribution center, etc.

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