Read time iconReading time:

Ask any driver about starting out as an owner operator, and they’ll probably tell you that the biggest obstacles to look out for are not the ones on the road to a delivery, but the ones on the road to your business success.

So, whether you’re looking to enter the domestic courier industry or become a long-haul truck driver, knowing what to be aware of before you start will make the journey a lot easier along the way.

Firstly, what is an owner driver?

An owner driver is a sole trader or contractor who uses their own vehicle to deliver goods, freight or people, as a going business. Usually, they only have one or two vehicles that they use. The owner driver is responsible for the maintenance, liabilities, accreditation, registration and insurance for their vehicle.

An essential service

Amid the chaos of the COVID-19 pandemic, one positive for the transport industry quickly emerged. That was the community’s appreciation for those essential services, such as transport, deliveries and freight, working tirelessly in the background to keep society functioning as smoothly as possible.

This recognition as a vital industry, as well as the increased demand for transport and courier services due to the enormous surge in online shopping has, understandably, encouraged many people to invest in becoming owner drivers. And, with the right knowledge of the potential pitfalls and hurdles, it can be a rewarding career – both personally and financially.

So, what are the key issues to avoid, or at least be aware of before setting up as an owner driver?

1. Know the personal risks

We all know that any vehicle on the road can be a dangerous beast, and that busy roads carry all sorts of hazards for a driver. Bad weather, unstable loads, unpredictable road-users, unpredictable passengers, long hours and even tyre failure can all lead to potentially life-threatening scenarios.

Thankfully, they’re not too common in Australia compared to many other countries, but the risks are always there, and indeed data from Safe Work Australia shows that the transport, postal and warehousing sector is one of the most dangerous industries.

And while the statistics don’t necessarily separate on-road risks from on-site risks, the open nature of the nation’s roads, with millions of people using them every day, does mean that it is potentially a dangerous workplace to operate in, even if you’re doing the right thing.

That said, we also have some of the safest roads in the world, with good maintenance protocols, active policing and solid investment in infrastructure and safety measures across the board.

2. Make sure you’re fully covered

Many owner operator drivers go to great lengths to make sure that their vehicle, their cargo, their premises, their passengers, and their business is fully covered by insurance. But then they forget to insure their own income-earning capacity.

As an owner-operator you’re your own boss, which means that if, for whatever reason, you’re unable to work, you probably won’t have the safety net of sick pay to fall back on. And without that, or the ability to earn an income from driving, cash-flow for you and your family can be seriously jeopardised.

But that’s where personal insurance such as that offered by TWUSUPER becomes so important.

TWUSUPER offers three types of insurance specifically designed to look after the needs of members, including owner-drivers:

  1. Death (including terminal illness) cover that provides a lump sum payout if you die or suffer from a terminal illness, or have incurred an injury that is likely to result in death within two years.
  2. Total and Permanent Disablement (TPD) cover which offers a lump sum payment if you become totally and permanently disabled.
  3. Income protection cover provides monthly income payments for up to two years if you’re unable to work due to illness or injury.

Of course, no one wants to be in the position of needing to claim these types of insurance, but if the worst was to happen, at least you and/or your family will be looked after when you’re unable to work.

See insurance types

3. Do your research

Have a chat to your colleagues or others in the industry about their own experiences.

Everyone loves to share advice, and often it is good advice to take on board. Find out if there are any specific sectors that are going to need more drivers – not just in the short term, but with a longer term, more sustainable demand.

Are there regions that are growing fast, but have limited alternative transport options such as freight rail or public transport? Are there niche but expanding industries that have specific delivery needs such as online nurseries shipping live plants with climate control requirements and short timeframes? Are there unique routes that aren’t being serviced but are showing growing demand? All these questions, and plenty more, can lead to valuable guidance in your business planning, and help you tap into long term demand.

Industry bodies that could help you with your research include:

4. Be flexible

Through the COVID-19 pandemic, the businesses that managed to thrive were the ones that could quickly adapt to fill a need. When planning your move to becoming an owner-driver, consider ways that you could swiftly adjust your operations, or provide a different service to meet changing business environments and customer demands.

5. Prepare for retirement

Ahhh retirement… that’s the goal we’re all looking towards, right? Unfortunately, one of the biggest mistakes any self-employed person can make is to ignore the income they’ll need to enjoy their retirement properly – namely, their super.

Because it’s not compulsory for self-employed business owners to make super payments for themselves, many owner-drivers overlook their own super contributions, and unlike employees, there is no employer automatically paying it on their behalf. This means that, when it comes time to retire, there is no super nest egg waiting for them and they’re left to rely on the relatively small payments from the age pension.

A lifetime of hard work should lead to an enjoyable and comfortable life in retirement, but without super that’s not likely, and as a self-employed driver your super is your responsibility.

Luckily, it’s easy to make contributions to a TWUSUPER account and benefit from the lower tax rate on those contributions.

If you become a member, the team at TWUSUPER can help you find any missing super, consolidate multiple super accounts into one account, and help you choose the right investment style to suit your age and risk preferences.

Join TWUSUPER and let us help you enjoy greater peace of mind today, and in retirement.