Trucking business terms, in plain words

B

Balloon payment

A large final payment due at the end of a loan or lease-purchase, after smaller regular payments, to pay off what is left and take ownership.

Base plate

The apportioned license plate a truck runs under, issued by its base state under IRP. Leased-on owner-operators often pay a weekly charge to run on the carrier's plate.

C

Chargebacks

Amounts a carrier deducts from your settlement for things it paid on your behalf, such as fuel or insurance. In factoring, a chargeback is an unpaid invoice billed back to you.

E

Escrow account

Money a motor carrier holds back from your settlements as security under the lease. Truth-in-leasing rules require it to be accounted for and returned, less valid charges, when the lease ends.

G

Gross revenue

Everything a load or a week pays before any deductions: line haul, fuel surcharge and accessorials.

M

Maintenance escrow

An escrow fund taken from each settlement, usually per mile or per week, to pay for repairs on a leased or lease-purchase truck.

N

Net revenue

What is left of gross revenue after specified deductions. Always ask exactly which deductions, because "net" means different things in different contracts.

O

Operating ratio

Operating expenses divided by operating revenue. Below 100% means the business made money; 95% means 5 cents of every revenue dollar was left.

P

Per-mile pay vs percentage pay

Two ways a carrier pays a leased-on owner-operator: a set rate for each mile driven, or a share of what each load pays.

Percentage pay

Being paid a set share of each load's revenue instead of a rate per mile. Read whether the share applies to line haul only or to fuel surcharge and accessorials too.

T

Trailer rental fee

A charge, usually weekly, for using a carrier's or leasing company's trailer, deducted from your settlement.

Trip lease

A short-term lease of a truck and driver to another motor carrier for one trip or a short series of trips, under the truth-in-leasing rules in 49 CFR Part 376.

W

Walk-away lease

A lease-purchase that lets you return the truck and stop paying without owing the remaining payments. You usually lose what you have paid in, and the terms vary by contract.