When you think about opening a trucking business, you might be surprised at how many different types of trucking are actually out there. When it comes down to profitability, most newcomers to the biz find it easier to take on smaller loads because they can complete multiple jobs in the shortest amount of time.
Hotshot or hot shot trucking is the smallest type of load you can haul. No matter what you pick up, it will all be less-than-truckload, or LTL. Most hot shot trucking companies pride themselves on fast service to meet clients’ tight deadlines.
As a result, they tend to service one geographic location and make one-off deliveries rather than ongoing pick-ups and drop-offs.
A “hotshot” job is one in which a company or contractor hires a driver (that could be you!) to take their load from point A to point B in a limited timeframe. Usually, drivers pick up work on an as-needed basis through load boards.
This means it can either be a good entry-level trucking gig or a profitable service to incorporate into your existing owner-operator trucking business.
In this guide, we’ll help complete newcomers learn everything they need to start hot shot trucking, from registering their business name to getting a truck and finding their first job.
Starting a Hot Shot Trucking Business: The Basics
What Is Hot Shot Trucking?
Hot shot trucking does not use semi-trucks. Instead, drivers haul a flatbed trailer attached to a midsize truck, usually class 3, 4 or 5. Truck classification is set by gross vehicle weight rating (GVWR), and it influences your legal and insurance requirements.
Most hotshot truckers drive Class 3 vehicles, like a Ram pickup. They attach a flatbed to the back and haul equipment and other cargo to destinations in a short period of time. The two most important things to know about hotshot trucking are:
- It’s time-sensitive, so punctuality and planning are critical.
- It’s usually equipment-specific, like agricultural or construction materials.
Starting a hot shot trucking business is best done by first deciding whether hot shot trucking is right for you. If you find it appealing to be both a business owner and a hot shot truck driver, then you can turn this niche into a profitable career.
Choosing an industry, or specialization, early on will also make it easier for you to build a solid brand and start finding clients.
What Do You Need to Become an Owner Operator?
Before you can start a hot shot trucking business, you have to become a truck driver. It is possible to become an owner-operator without a CDL if you are driving a Class 3 pickup truck.
Non-CDL hot shot trucking businesses are limited to what types of loads they can haul, but it does allow you to start working without having to earn a commercial truck driving license.
However, earning your CDL adds credibility to your brand and allows you to expand more rapidly in the future. With a CDL, you always have a Plan B. If you aren’t finding a lot of hot shot trucking jobs near you, you can easily hop behind the wheel for a carrier and start hauling their loads.
The flexibility of having a CDL makes being an owner-operator far less of a gamble. Although you are still building up your business, you can always take on other truck driving jobs for extra cash and stability.
Choosing Your Industry
Hot shot trucking is its own niche, but there are various subfields within it that you can choose to focus on. It’s best to research the demand in your area to decide which industry is the most profitable.
For example, in rural America, there is likely to be a greater need for agricultural hot shot drivers than there is in Florida or New York.
If you are looking into how to start a hot shot trucking company in Texas, consider what vehicle class and load type you want to specialize in. Driving a Class 3 pickup truck is vastly different from hauling loads on a 26,000-pound Class 5 delivery truck.
Your specialty and the type of truck you drive will also influence your insurance rates and operating costs. It may be helpful to look up hot shot trucking load boards and forums online in your state. This can help you reach out to other drivers, learn about the biz and determine the best course of action.
Building a Brand
Branding is important because it helps you present yourself as a professional company rather than a random driver. When people are looking to hire someone for a time-critical, last-minute delivery, they’re more likely to choose a reputable brand than someone who just happens to own a decent truck.
Your branding should include:
- A relevant name
- A logo
- A website with a list of your services and contact information
At the minimum, these elements will help you brand yourself as a professional hot shot trucking driver. Professionalism makes all the difference, especially for a newcomer who wants to earn respect in the industry.
Registering Your Business
You should register your trucking business as an LLC with your state. This costs between $250 to $400. You may also look into obtaining an employer identification number, EIN, especially if you intend to hire other drivers to work for you. You can also get an EIN as a sole proprietor, but it may not be necessary right away.
Whether it’s through your own savings, loans, or private investors, you’ll have to secure startup capital to get your business off the ground. The cost of starting a hot shot trucking business is between $15,000 to $25,000, depending on the type of vehicle(s) you use and the equipment you need. Insurance costs, fuel, and legal documentation also cost a considerable amount when starting out.
Finding a Rig
You can lease or buy a new truck for your hot shot trucking company. New vehicles cost more upfront, but they also build equity. You can either pay them off in full or eventually trade them in to upgrade your fleet.
Leasing a truck may be better for someone with a smaller starting budget. Just remember that this does not offer you any long-term benefits. Although leasing is accessible for most, you’ll want to eventually transition into owning your own rigs. This gives you greater control — and the opportunity to save money — down the line.
Get a USDOT and MC Number
To start a hot shot trucking business, you’ll need to apply for a USDOT number through the Federal Motor Carrier Safety Administration’s website. If you plan on crossing state lines for work, then you’ll also need to apply for an MC number. Filing fees vary, but you can expect to spend at least $300.
Hot shot truck drivers need liability insurance, generally with a minimum coverage limit of $750,000 to $1,000,000. You should expect to pay anywhere between $7,000 to $12,000 annually for premiums per vehicle.
Bear in mind that policy coverage is only the basic insurance requirement for your business. You’ll also want to look into collision and property damage policies, personal injury coverage, and underinsured/uninsured motorist coverage.
Getting the Right Equipment
You really only need a qualified pickup and flatbed trailer to get started. Chevy, Dodge, and Ford are some of the best makers of Class 3 pickups for hot shot truck drivers. At the minimum, you’ll need a ¾-ton truck and flatbed, along with equipment such as:
- Tie-downs and come-alongs
- Tow straps
- A mounted fire extinguisher
- Phone mount
- Flat hooks
- Corner protectors
- Oversize/wide load banners
- Towmate lights
You should set aside at least $4,000 to buy all the startup equipment you’ll need to go along with your trailer. Make sure you take time to do your research and ensure you buy all the right tools of the trade for your target industry.
Set Your Rate-Per-Mile (RPM)
Hot shot trucking contracts are based on rate-per-mile, which ultimately determines how profitable a job is for you. Typically, hot shot trucking costs $1.50 to $2.50 per mile. The heavier the truck and bigger the load, the more it will cost.
The best way to determine your RPM is to investigate competitors and price your model accordingly. Be sure not to price your services too low just to attract business. Under-pricing makes you appear amateur, and clients will likely be suspicious of such low rates.
Furthermore, pricing your services too low just to secure work will ultimately leave you at a disadvantage. You have to break even (earn more than you spend) as soon as possible to get your startup off the ground.
Find Loads to Start Earning Money
The easiest way to get started in hot shot trucking is to look for jobs on a load board. These boards allow people with jobs to post listings that drivers can apply for. Picking up loads is a relatively fast process in the hot shot biz.
Because the jobs are time-sensitive, you’ll usually find an ongoing rotation of new loads available. Time management will be imperative when it comes to getting the best deals and earning as much as possible.
You can also practice cold calling. Reach out to potential clients directly through email, and let them know a bit about your business and the services you can provide. While finding individual clients is possible, a load board is crucial in securing a steady stream of loads.
The Bottom Line
Being a hot shot truck driver, or starting your own hot shot trucking business, is a flexible career. You set your own hours, choose your loads, and generally have to drive far less than a standard truck driver. It’s also the only trucking industry you can enter without a CDL.
Keeping costs down and automating your business is essential to freeing up your time to spend where it matters most to you. Contact Truckbase today and learn how our TMS can keep you out of the office and on the road instead!