Starting a trucking business today can be very rewarding for many reasons. The logistics industry is suffering from a shortage of around 75,000 trucks and it is estimated that it will need up to 200,000 trucks by 2020. For every truck currently on the road, there are an estimated 10 to 20 full truck loads that must be moved now. As the economy continues to grow, the demand for trucks to transport cargo will not end. Learning how to start a trucking company business is what I will share with you in this article and the benefits anyone can receive from owning their own trucking company and not having to buy a truck.
Starting a trucking business makes you money
Owning a trucking business in America today is a guarantee for making money. For every full truck load that is moved, you can see the revenue generated right away. I always tell people that as soon as you get a load, you get paid and there isn’t a long wait in between. The value of each truck load is determined by the type of trailer your truck is pulling and you are paid by the mile. A good example would be if you were to pull flatbed products transporting construction materials 1,000 miles, your truck could generate up to $ 4,000.00 each way. For this reason, it is very important to decide on the proper trailer to use to move the load and to ensure that your driver can handle this type of trailer.
Within the transportation industry, there are several types of trailers that are used to transport goods. The highest paying trailers are typically flatbed with refrigerated trailers below. General box freight generally pays less, but the abundance of freight available is endless. A person can earn around $ 50,000 to $ 75,000 a year if he owns any of these types of trailers with his trucking company and can keep his truck moving on a daily basis.
When you start moving cargo with your new trucking company, during the first 6 months you will be limited to receiving cargo as your company is new. It is very important to work with a freight forwarder who can help you get shipped and find a consistent load. Freight brokers have the job of working with hundreds of different carriers that would allow you to pull cargo as a new transportation entity. After a few months of operating with your own federal authority, more carriers will start delivering freight to you as your time in business grows. Regardless of being new, anyone can maintain their trucking business by moving cargo on a daily basis with the help of a good freight forwarder and it is very important in the beginning to contact a freight forwarder to discuss the cargo that their truck will carry.
Starting a trucking business is affordable
If you want to start a trucking business today, you can do so for around $ 1,200.00. This is usually the cost of your filings and some statements may be different, so be sure to check with a consulting firm like LFS about the fees you would be looking to pay. One requirement you would have is applying for your federal MC and DOT numbers. This is around $ 300.00 dollars. After filing with the FMCSA, you would request your UCR filing and IFTA account to be able to move cargo in various states. These submissions can be made by a professional company that would file on your behalf so no mistakes are made and authority is granted after 21 days from the submission date. The FMCSA makes you wait 21 days before allowing Activate your MC Authority to be granted.
The last requirement would be to have a liability insurance policy added to your MC Authority of a minimum of $ 750,000 and the FMCSA will grant you assets to move the load.
Listed below are the standard filings required to start your own trucking business:
• USDOT Number – This US Department of Transportation (DOT) number is used to collect and monitor your company’s safety information, inspections, accident investigations, and more.
• Operating Authority – All rental carriers must have DOT authority to transport cargo across state lines. Your authority also determines what types of cargo you can carry.
• Heavy Vehicle Use Tax – Applies to all trucks weighing more than 55,000 pounds.
• International Registration Plan (IRP) – The IRP distributes registration fees based on distance traveled in each US state or Canadian province. You have to register with your state’s transportation website.
• International Fuel Tax Agreement (IFTA) – IFTA is an agreement between the lower 48 US states and Canadian provinces to simplify reporting of fuel use by carriers driving in various state. Carriers file a quarterly fuel tax report that determines their tax and distributes it to the states. Your truck must have an IFTA decal and you must request a new one at the beginning of each year.
• Presentation of BOC-3: appoints the process agent of your company, who will be the one who will receive the notification on your behalf in any legal proceeding. You must designate a process agent in each state in which you maintain an office or establish contracts.
After these submissions have been made, you will generally have between 21 and 30 days before receiving your first load. The FMCSA will also include you in the Truck New Participant Program for the first year and you will need to meet with a DOT inspector for your first safety audit within your first year. This allows anyone to start learning about the requirements and your audit should be fairly easy to pass. There are several companies that will help you learn and keep your new trucking company in compliance with FMCSA guidelines and help you prepare for the safety audit. I recommend that you work with one of them. One of the most trusted companies that can help you meet and comply with your DOT safety audit is JJ Keller.
You don’t need to have a truck to start a trucking business.
As mentioned above, the amount of cargo is endless in this trucking business and this is great for a trucking business owner. Most people think they need to invest in a truck that can be expensive. The truth of this is that you don’t have to be the owner of the truck and trailer, you just need to be the owner of the trucking company. A new trucking business can be started using someone else’s truck and trailer. This is called an owner operator and you can register the truck from owner operators under their authority. The owner operator would be considered a leasing driver and would drive your truck and trailer for you. I would make around $ 500.00 a week or more just using this method and there are many people who are realizing this type of trucking business model.
Insurance companies for the first year will generally allow you to have 3-4 trucks under your new Federal MC Authority. Since you are being monitored to make sure you operate your trucking business under the new Truck Starter Program. You can see how just having up to 4 trucks under your trucking company can earn you $ 2,000 or more a week and the opportunity is definitely there. After your first year, insurance underwriters will begin to allow you to add more trucks under your Federal MC Authority and you will be able to grow your new trucking business organically. I recommend after the first year that you decide at some point to buy your first truck and trailer and at this point your income may increase an additional $ 1000.00 or more per week for each truck you own with a driver moving full truck loads for you.
You can work from home with your trucking business
Owning a trucking business today does not require a person to have a large transportation facility. Most people who start out owning a trucking business do so from the comfort of their own home. Your truck carries cargo on a daily basis usually on the road and you rarely see it unless you are performing maintenance and checking your equipment. You can monitor your truck activity from your home computer using GPS location software. This allows you to work from a home office and ship your truck daily with full loads. You can also help yourself for the first year by allowing a freight forwarder to dispatch your truck while you work to keep your business in compliance with FMCSA guidelines. The basic necessities for shipping your truck are a computer and a telephone.
As a trucking business owner that does not own your own trucks, you would only need a home office to ship and monitor your trucking business. A basic computer with cargo board solutions and a TMS (transportation management software) is all you need. The truck driver delivers the cargo and sends the documents to you electronically from his cab. You upload your documents and submit them to receive funds to receive payment for the cargo. Typically, you can be paid within a few days of delivering your cargo.
TMS software also handles basic trucking accounting and reporting and everything you need to run your trucking business is done virtually from your home office. This is the daily routine that you would follow with your trucking business, as well as making sure your driver does his truck inspection reports on a weekly basis and that your trucking business is moving forward. If you work with a freight forwarder then they will send you daily reports of loads moved and you will simply upload them to your TMS software. You would expect to work a few hours a day from your home office just by having a truck or two on the road moving cargo.
Working from home and owning your own trucking business can be very rewarding and can earn you a comfortable income. Many freight brokers who develop their freight broker business also own trucking businesses. By combining both businesses, you really have an incredible opportunity to take logistics as a home business seriously.