How to Start and Run a Trucking Company

How to start a trucking company

Becoming an owner-operator is rewarding, but you can’t wake up one morning and have a functioning business by the afternoon. Instead, you need to prepare and take a strategic approach to your business. You should:

Develop a business plan

Running a business is hard, especially if you don’t know what you’re doing. Unfortunately, new business owners often find themselves overwhelmed — and out of the industry — due to a lack of research and planning. Before you do anything, sit down, conduct research, and create a business plan so you can hit the ground running.

Calculate your expected revenue, salary, and per-mile operating expenses to determine your target rates and consistently choose profitable loads. After all, if your costs constantly eat up your profits, you won’t be able to set money aside for maintenance, upkeep, new vehicles, and future growth.

Ask yourself:

• How will I get the necessary operating equipment? Will I lease it? Do I have enough savings to purchase it in cash? Do I need to get a loan?
• How will I find loads? Will I use a loadboard or a broker?
• Which areas will I operate in?
• Do I need any special authorities or permits?
• How will I handle invoicing, accounting, parking, and maintenance?

It might also be helpful to design systems for how you’ll book your loads and communicate information with shippers or drivers. By setting up this infrastructure now, you can avoid disruptive growing pains in the future.

Get your CDL

Before launching your own trucking business, make sure you have your CDL and some driving experience. Not only will shippers have more confidence in you, but you’ll also be more comfortable on the road.

If you’re an inexperienced driver hoping to run your own business, starting off as a company driver is an excellent first step. You’ll gain valuable experience, and your company may even put you through their training programs, cover the cost of CDL school, and help you jumpstart your career.

Meet trucking safety requirements

In addition to earning your CDL, there are several other things you’ll need to do, including:

• Obtaining your operating authority: If you need to haul freight across state lines, you’ll need your operating authority from the U.S. Department of Transportation (DOT).
• Obtaining your motor carrier (MC) number: You’ll need to apply for an MC number from the FMCSA if you plan on hauling loads across states.
• Applying for your USDOT number: You’ll need to register with the FMCSA and obtain a USDOT number to use a commercial vehicle to haul loads in interstate commerce or transport certain hazardous materials.
• Applying for international registration plan (IRP): Register for IRP on your state’s transportation website.
• Paying the heavy vehicle use tax (HVUT): If your truck weighs more than 55,000 pounds, you’ll need to pay a heavy vehicle use tax.
• Filing your form BOC-3: Name a process agent (someone who will be served on your behalf in legal proceedings) for every state you conduct business in on your Form BOC-3.
• Applying for your international fuel tax agreement (IFTA) decal: If you drive in multiple states, you’ll need to apply for an IFTA decal.

As you can imagine, there’s a lot of paperwork involved, and one mistake can result in weeks of delays. If you need help, work with DAT Authority. DAT’s experts will handle your applications and permits so you can concentrate on launching your business and finding the most profitable loads.

Obtain insurance

Before beginning operations, you’ll need to have at least $750,000 in primary liability insurance to comply with the FMCSA’s requirements. If you cause an accident that hurts someone or damages something, this coverage will kick in. However, it’s worth noting that many brokers and shippers require trucking companies to have at least $1 million in liability coverage.

You may also want:

• Cargo insurance to cover freight damage or theft.
• Physical damage insurance to cover your truck if you’re ever involved in an accident you aren’t liable for.
• Bobtail insurance if your truck is involved in an accident when not in the middle of hauling a load.

Register your business

You’ll also need to register your business with your state. Many owner-operators register their businesses as limited liability corporations (LLCs), but you can also register your trucking company as a sole proprietorship, partnership, c-corp, or s-corp. Each has its own benefits and drawbacks, so consider consulting with an accountant if you aren’t sure which business structure is best.

Get a truck and trailer

Last but not least, you’ll need a truck and trailer.

If you plan on returning home or staying at a hotel each night, you might opt for a day cab. However, if you need to be on the road for long periods and don’t want to regularly spend money on hotels, a sleeper equipped with a bed and fridge might be best.

Think about the kind of freight you’ll haul when deciding which type of trailer to use. For example, if you plan on delivering dry freight, you’ll need a dry van trailer. However, if you need to haul produce or milk, you’ll need a refrigerated trailer.