If you want to know how to start a trucking business, chances are you want to work for yourself. Maybe you’re a trucker now and you want to get off the road and have steady income coming in. With more people in the U.S. ordering products online, shipping and delivery industries are booming. The country relies on truckers to get products delivered on time. That’s why now is a good time to start your own trucking business. You can hire drivers, make more money, and even start saving for retirement (and a vacation).
Trucking is a profitable industry. Trucks deliver about 70% of products across the U.S. worth about $700 billion. This opens a door of opportunity in driving revenue and profits to your trucking business, whether you’re an owner or owner-operator.
Here are 10 steps on how to start a trucking company. These tips can help you start and run your own successful trucking/transport business.
How to start a trucking business
Step #1: Get your commercial driver’s license.
Whether you’re an owner-operator or you hire drivers, you/they need a valid Commercial Driver’s License (CDL), as required by the Federal Motor Carrier Safety Administration (FMCSA).
Drivers age 21 and over can apply. Drivers aged 18-20 can drive intrastate. Drivers submit a CDL application and pay application fees. They need proof of identity, U.S.-residency, and a valid social security number.
Drivers also have to pass vision and knowledge exams. After getting a Commercial Learner’s Permit (CLP), they must pass a pre-trip inspection and road skills and driving exam (with their vehicles). After passing these tests, drivers pay the applicable fees and receive their CDL.
Step #2: Apply for your trucking authority.
One of the first steps in exploring how to start a trucking business is to complete your trucking authority. Trucking businesses need to have an operating authority when they work as a hire-carrier over state lines for vehicles more than 10,000 gross vehicle weight (GVW).
To get started, create a unique business name and check online to make sure it’s available. Then file it with your state. Complete an application for your trucking authority with the FMCSA. File for your Motor Carrier Number (MC#) for transporting interstate commerce.
Step #3: Select process agents.
The next step in starting a trucking business is choosing a process agent. This is the person who can legally represent you when you file the court papers for your business. Your business needs process agents in every state that you travel in and work and operate. This is a legal requirement by the FMCSA so don’t skip this important step.
Process agents are helpful in that they work on your behalf if you ever have a problem in another state. As noted in Step #2, your process agent completes your BOC-3 paperwork. To find available process agents, refer to the FMCSA’s site.
Step #4: Determine your business type.
Also noted in Step #2, when starting a trucking business you’ll file taxes with the IRS. It’s essential to establish the type of trucking business you want. It might be a sole proprietorship, partnership, limited liability corporation (LLC), or corporation. They vary in type so speak to a tax accountant.
Some businesses file sole proprietorship as this is the cheapest and easiest when filing taxes. But if a person or business sues you as an owner or owner-operator, they can sue you personally versus if you have a corporation. In that case, they would sue your company and not you, protecting your personal assets.
Step #6: Know the legal requirements.
The trucking/transportation industry is a highly regulated industry. That means the FMCSA has several legal requirements for owner-operators.
- Apply for your US Department of Transportation (DOT) number and your Federal Authority.
- File a BOC-3 and start a trucking insurance policy (primary liability, cargo).
- Get your International Fuel Tax agreement stickers.
- Register for your UCR permit and International Registration Plan (IRP) and get apportioned plates.
- Obtain an Employment Identification Number (EIN) for the IRS, whether you’re filing as a sole proprietor, LLC, or corporation.
- Install FMCSA-compliant electronic logging devices in your vehicles (for non-exempt carriers).
Step #7: Get insured.
In 2018, large trucks accounted for 112,000 injury crashes and 4,862 fatal crashes. To avoid accidents, businesses need insurance to protect against losses (damages, injuries caused by commercial vehicles). Shop around for the best rates and refer to the FMCSA for insurance filing requirements.
Trucking insurance might include:
- Primary liability: $750,000 in coverage. Some brokers require $1 million in coverage.
- Cargo insurance: $100,000 in coverage.
- Physical damage: This coverage protects in no-fault accidents.
- Non-trucking use: This is coverage for accidents if you’re hauling loads for another person or company.
Find additional information with the Owner-Operator Independent Drivers Association.
Step #8: Get a truck and/or trailer.
Commercial truck financing terms vary depending on your credit. When you order your trucks, there are different types of leasing options available.
Types of leases:
Operators: This is having the vehicle full-time and always in your possession. You pay for permits, taxes, and maintenance and turn in the vehicle when the lease ends.
Lease-purchase: This is for drivers with less-than-perfect credit. They can finance trucks right away but may pay more in interest.
Terminal Rental Adjustment Clause: For this, you pay a down payment up front. At the lease end, you can pay the balance for the vehicle. Or, let the leasing company sell the vehicle, and they may share part of the profit with you.
Step #9: Subscribe to a load board.
The Truckstop.com carrier load board features include:
Load searching gives you access to unlimited jobs in every state where you work. Access pricing, load weights, and distances all in one glance. Use the Book-It-Now feature, and in a few clicks view the new loads that are available and click on the ones you want.
Unlimited Lane and Truck Postings
View accurate routing and mileage data anywhere you drive. Know the distance to your next pick-ups and calculate fuel consumption. View by load, truck, or lane. Use custom features for weight, height, and quantity.
Use Decision Tools to help you negotiate better with brokers (potential business partners). Find out key criteria like how many other truckers are viewing jobs. View jobs by destination or the area you want to visit next.
This option lets you instantly book on any device (phone, tablet, laptop). Use the refresh feature to update for recent job postings in real-time. Sort by the age of the listing or other categories. You can view the available rates and all load information up front before you book it.
View the IFTA data and all available rates and routes. Quickly calculate fuel costs and find nearby fuel stops. Find alternate routes and rate criteria in a few simple clicks.
Credit Stop Broker
Run credit checks on a broker before accepting offers. Find their reviews by searching for their company name or DOT number. Set up convenient watchlists to match brokers with drivers.
Flexible Payment Plans
Starting out with only a few drivers? Want to find the best rates fast? Choose from convenient plans that help you grow your business over time. Plans include Basic ($39), Advanced ($125), and Pro ($149). Upgrade features as you expand your services.
Additional options with Pro plans
See new load postings in real-time. Know available load jobs in your area or the area you want to travel to next. Use custom features to help give your drivers jobs as they become available.
View rate indexes and trends, as these can help you make the right offer. Get older data to help you know exactly what rates to charge.
View map results to help you plan your trip. Access new load jobs and estimate distances accurately. Use custom settings for multiple searches.
Search by Best Paying Loads
Interested in staying at a certain pay rate? View every job in a particular city or state. Find out the criteria for the highest-paying jobs. Plan your route in advance and know accurate pay rates.
Calculate all the information you’ll need, like load weights, times, and rates. Estimate hours and distances to help drivers take on more or less work. Know where drivers can find new loads to save time and keep the work steady.
Step #10: Create a system for managing finances.
Your business will need a decent amount of money as you start having expenses (equipment, supplies, labor, fuel, utilities). Trucks might cost an average of $80,000, and you’ll have other expenses, like insurance, legal fees, and maintenance.
Check with large and small banks and credit unions for financing. Credit unions may be easier to get a loan from, as larger banks want to see two years of operating history. You can also check online for trucking lenders.
Once you get financing, hire the best tax attorney and bookkeeper you can afford to manage your accounting. Use Intuit QuickBooks or other accounting software.
Running your own trucking business is a great way to make extra money, but as a new operator, it can take time. Don’t let the initial paperwork or credit requirements stop you from owning your own business. With driver and truck shortages, more owner-operators are finding financing and leasing options despite less-than-perfect credit. As more people shop online and want items delivered, it keeps the trucking industry in high demand (and you can make money). Once you set up your company, get insurance and hire drivers. Use Truckstop.com to pick up loads and make extra income. Hire the best tax accountants to help you look for ways to control expenses (to maximize your profits!).