Truckers fuel America. This $700-billion industry makes up 5% of all full-time jobs in the states, and it transports 70% of all goods throughout the country. With more than 3.5 million calling the road their office, trucking is still alive and thriving even in the face of an ongoing driver shortage.
With such a demand for qualified truckers and reputable carriers, now is the perfect time to consider starting your own company. To help you get all your gears in order, this guide will explore everything you need to know about how to start a trucking company.
How to Start a Trucking Company
Becoming the owner of a trucking company can give you professional freedom. You choose what goods you transport, who drives your trucks, set your hours and your rates. If you’ve been longing for more flexibility and freedom in your career, then owning a trucking business is one of the most profitable ways to achieve that.
Getting started requires a whole lot of research, patience, and, of course, funding. In trucking, the legal requirements can be the most complex part of the process, especially for newcomers. But don’t worry — this guide will cover everything you need to know, including how to start a trucking business with limited resources.
What You Need to Start a Trucking Company
First and foremost, you have to decide whether you plan to run a company and hire drivers or become a driver yourself. The most self-directed trucking business is one that functions under the owner-operator model; this means you own your own truck and transport all the loads you take on for clients.
However, you can still own a trucking company without driving. You’ll still need to acquire the vehicles, but instead of getting a commercial driving license (CDL), you’ll need to recruit, vet, and hire reputable drivers to haul your freight.
You’ll also need capital. These are the starting funds you put into your company to get it off the ground. It includes acquiring a truck, getting the right equipment, and paying for insurance and registrations.
Before we get into that, though, let’s look at the first stages of actually creating a business.
How Much Does It Cost to Start a Trucking Company?
The total cost of starting your trucking company will vary depending on your industry. Generally speaking, most companies can get off the ground with $15,000 to $30,000 in starting capital.
This will go toward registration costs, vehicle acquisition, insurance, permits, and any other business assets you need.
You may decide to apply for a bank loan, take out a home equity loan or use savings. Many trucking businesses start by pulling capital from several resources to get started. The goal is to keep your initial investment low so you can break even quickly.
There’s a lot of paperwork involved in starting a trucking business. Below is a quick rundown of all the legal documentation you’ll have to acquire before you can operate.
USDOT and MC Numbers
You will have to register your trucking company with the Federal Motor Carrier Safety Administration (FMCSA). They will issue your USDOT and Motor Carrier (MC) numbers.
At this stage, you will also need to complete the Motor Carrier Identification Report (MCS-150) and file your Safety Certification Application.
Unified Carrier Registration (UCR)
All trucking companies must register with the national UCR system to activate their insurance in their state.
International Registration Plan (IRP) License Plate
Your IRP allows you to operate in all 50 states, regardless of where your business is headquartered. It also allows you to deliver to the majority of provinces in Canada. You will have to pay annual renewal fees to keep this active.
International Fuel Tax Agreement (IFTA) Permit
You will need this permit to acquire a fuel license and to file quarterly fuel use taxes in your home state.
The BOC-3 form is submitted while applying for FMCSA authority. You must appoint a service of process (SOP) agent who lives in every state you will operate in. You can hire a professional agent for $20 to $100 depending on your industry and the services you offer.
Standard Carrier Alpha Code (SCAC)
SCAC codes are necessary only if you will be transporting government, military, intermodal or international goods. Otherwise, you can ignore this.
Electronic Logging Devices (ELDs)
Creating a Trucking Business Model
Like we said earlier, you have two options when it comes to professional trucking:
- Own and operate your vehicle.
- Acquire (leasing) vehicles and hire drivers.
The determinant factor will boil down to whether you want to be on the road or not. Hauling freights is a full-time job in and of itself, and you may prefer to stay behind the scenes and handle all the management aspects instead.
You’ll also have to select your target audience and industry. Put another way, what industries will you service, what types of loads will you haul and what benefits can your company provide to this particular niche?
Think about whether you plan to do short-haul or long-haul trucking. The former will allow you to carry out more jobs in a smaller geographic region while the other allows you to take on larger orders for a greater distance and greater profit.
That being said, you’ll need to factor in the increased costs of operating long-haul. For new businesses, it may be more advantageous to start as a short-haul carrier and expand as your resources increase.
Branding Basics: Naming and Logo Design
The name and logo of your trucking business become the visual representation of your brand. It’s what future clients will come to know you as. You want a name that reflects your values and emanates power, trust, and efficiency.
First of all, do some research and look up current companies. You’ll want to make sure that you don’t fall in love with a name that is already taken.
As you think of potential names, stick with short, clear words that are easy to spell and pronounce. Avoid getting too creative and using an alternative spelling for a common word. This can only lead to confusion and even documentation errors down the line.
You can get inspiration for your trucking company name from a variety of sources, such as:
- Your location
- The type of freights you’ll haul
- Your values as a business (freedom, trust, etc.)
- Your ultimate goal as a trucking company
- Meaningful symbols to you or your brand, e.g. an animal or state mascot.
Next up is getting a logo made for your business. This logo should be easy to read and place on your truck, website, and any other assets. If you’re handy with graphic design, go ahead and make a logo yourself. If not, that’s okay. There are plenty of freelance logo designers online who will be able to make you one for an affordable price.
Growing Your Business
Once you’ve got your truck, CDL (if you’re driving), and are ready to start hauling freights, it’s time to focus on growing your business. The easiest way to find loads is to check online freight boards or load boards. These are hubs where clients or brokers can directly post their orders for you to take on.
You’ll also need to establish a management process; think about how you’ll supervise drivers, offer feedback and ensure compliance at every stage of your operations. Consider whether you’ll need to hire an office manager and whether you’ll use fleet management software to oversee business yourself. Truckbase.com is one tool that can help keep your trucking business organized, saving you time and money.
You’ll also need to factor in fuel management, routine vehicle maintenance, and ongoing costs to ensure you earn enough money to stay profitable. It may take time to get your business off the ground, but once you run some successful jobs and build a good reputation, you may even be able to establish ongoing relationships with clients.