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How to start a trucking company: a comprehensive guide

Starting a trucking company in the USA can be lucrative given the country's vast size and the essential role transportation plays in its economy. The trucking industry is a critical component of the supply chain, facilitating the movement of goods across the nation.

The trucking industry has seen steady growth in recent years, significantly contributing to the country's gross domestic product (GDP). According to the American Trucking Associations (ATA), trucks move billions of tons of freight annually, generating hundreds of billions of dollars.

If you're wondering how to start a trucking business, including the most important things you'd need to consider before you launch – like the costs involved and legal requirements – our guide has you covered.

Types of trucking companies

Before diving into the details of starting a trucking business, make sure you understand the options of different trucking companies. The type of fleet you choose will significantly impact your business model and the services you can offer.

Here are some common types of trucking companies:

  • Freight trucking businesses: these companies transport general freight and goods. They may specialize in less-than-truckload (LTL) or full-truckload (FTL) services.
  • Specialized freight trucking companies: specialized carriers transport specific types of goods, such as hazardous materials, refrigerated goods, or oversized cargo.
  • Intermodal trucking companies: these are businesses that use multiple modes of transportation, such as trucks, trains, and ships, to move goods more efficiently.
  • Owner-operator trucking businesses: independent truckers who own and operate their own trucks, often working as subcontractors for larger carriers.
  • Courier and delivery services: these companies specialize in local or regional delivery services, transporting packages and goods to businesses and consumers.

Creating your trucking business plan

Creating a comprehensive trucking business plan is crucial to establishing a successful company. A well-thought-out business plan will serve as a roadmap for your company's growth and development. Here's an outline of the key elements to include in a business plan for a trucking company:

  • Executive summary: this should provide a concise overview of your business, including its mission, vision, and key objectives.
  • Company description: describe your trucking company, its history or background, and the services you plan to offer. Highlight your unique selling propositions and competitive advantages.
  • Business goals/objectives: clearly outline your short-term and long-term goals. Specify your revenue targets, market share goals, and any other key performance indicators (KPIs).
  • Market analysis: thoroughly analyze the trucking industry for the area you intend to operate in and the type of trucking company you are starting, including your target market. Identify competitors, market trends, and potential opportunities.
  • Organization and management: detail your company's organizational structure, including key personnel and their roles. Highlight the qualifications and experience of your management team.
  • Financial plan: offer detailed financial projections, including your trucking business startup costs (we'll look at this in the next section), operating expenses, revenue forecasts, and break-even analysis. This section should also include information on how you plan to fund your startup.
  • Logistic needs: outline the logistical requirements of your trucking business, including the type of equipment needed, maintenance plans, and any partnerships with suppliers or service providers.

How much does it cost to start a trucking company?

The cost to start a trucking company can vary considerably depending on the nature of your planned operations. That said, you should be aware of several upfront costs and ongoing expenses before starting a trucking business. 

We’ve listed rough estimates below for some of the most important costs to consider. 

Initial trucking business startup costs

  • Commercial truck purchase: the most significant, unavoidable expense is the cost of buying one or more commercial trucks. Prices vary based on the type and condition of the truck, but you can often expect to pay over $100,000 for a first commercial vehicle.
  • Operating Authority (MC number): you will need to get a Motor Carrier (MC) number from the Federal Motor Carrier Safety Administration (FMCSA); this is mandatory, and the cost for each individual Operating Authority is a one-time fee of $300.
  • Insurance: commercial truck insurance is essential, so you'll need to cover this expense when you first start your business. The cost of insurance for a trucking company – including things like liability insurance, cargo insurance, and bobtail insurance – will vary quite a bit, but as a general rule, you can expect it to range from around $8,000 to $14,000 annually, depending on coverage types and the size of your fleet.
  • Licenses and permits: various licenses and permits are required, such as the USDOT number, which is free, and state-specific permits, which may vary in cost.
  • Business registration: registering your trucking company with the appropriate state authorities typically costs a few hundred dollars.
  • Technology and software: you might want to consider investing in transportation management software (TMS), GPS tracking systems, business and financial management solutions, and other technology tools to enhance your operations. These costs can vary significantly, but a TMS system could set you back anywhere from around $20/month for a small business to an eye-watering $400k+.

Ongoing expenses to research and plan for

In addition to the initial costs of starting a trucking company, your business will have ongoing expenses that you should ensure you plan for.

  • Fuel: fuel costs are a significant ongoing expense. Prices fluctuate, so it's essential to budget accordingly and keep tabs on the best prices and suppliers.
  • Maintenance and repairs: regular maintenance and unexpected repairs are part of truck ownership. Allocate funds for routine maintenance and have a contingency for unexpected repairs.
  • Ongoing insurance premiums: as well as getting your insurance policy set up and paid for from the get-go, you'll need to make sure you can cover your monthly or annual insurance premiums to keep the coverage for your trucks, cargo, and liability going.
  • Driver salaries: if you hire drivers, their salaries will be a recurring expense to consider when planning your trucking business startup costs and regular outgoings. Be sure to include payroll taxes and benefits in your calculations.
  • Taxes and compliance fees: stay compliant with tax obligations and pay any necessary fees to regulatory authorities. Using efficient accounting and HR software can help you stay on good terms with the tax man.

How to cover your trucking business startup costs

When it comes to financing your new trucking business, there are many avenues you can explore if you don’t already have the capital you need.

You could apply for an SBA (Small Business Administration) loan, typically offering a high loan total with a low interest rate. However, SBA loans can be hard to get, especially if you don’t have a good credit score and a well-established credit history.

Another option is an equipment finance loan, which is often easier to get and can cover up to 100% of your equipment (vehicle) cost. These loans can be used for buying or leasing equipment and usually offer competitive interest rates. Be aware that your truck will be used as collateral, meaning the lender may take possession of it if you fail to repay your loan.

You could also consider a small business term loan, offering you a lump sum that you pay back with regular repayments at a fixed interest rate over an agreed time period.

Although credit cards offer an easy and convenient way to cover big purchases and expenses, taking out a loan can often be a more affordable, less risky option in the long run.

 

Do I need a business license for a trucking company?

Yes, a trucking company requires several business licenses and permits to operate legally, which could include:

  • USDOT number: the USDOT number is issued by the FMCSA and is obligatory for all commercial vehicles that transport cargo across state lines. It's free.
  • Motor Carrier (MC) number (Operating Authority): this is also issued by the FMCSA and costs $300. See Operating Authority in the Initial trucking business startup costs subsection above for more info.
  • International Registration Plan (IRP): if your trucks operate in multiple states, you may need to register with the IRP, which facilitates the apportionment of registration fees.
  • International Fuel Tax Agreement (IFTA) license: you'll need an IFTA license if your vehicles operate in multiple jurisdictions. It simplifies the reporting and payment of fuel taxes.
  • State and local permits: depending on your operations, you may need additional permits at the state or local level, such as overweight or oversized permits.
  • Business license: also consider getting a general business license from the appropriate state and local authorities.

It's crucial to ensure you comply with all of the relevant licenses and permits to avoid fines, penalties, and potential shutdowns of your business.

 

Insurance for trucking companies

Getting the right insurance for a new trucking company is essential to protect yourself against various risks and expenses. We've listed the key types of trucking business insurance that you'll want to look into below.

  • Liability insurance: this coverage protects your business in case of accidents or injuries caused by your trucks. The minimum liability coverage requirements are mandated by the FMCSA.
  • Cargo insurance: cargo insurance covers the value of your trucks' goods. The amount of coverage needed depends on the types of cargo you transport.
  • Physical damage insurance: this insurance covers the cost of repairs to your trucks in case of accidents, theft, or vandalism.
  • Bobtail insurance: also known as non-trucking liability insurance, this coverage applies when a truck is operated without a trailer. It offers protection during times when the truck is not under dispatch.
  • Workers' compensation insurance: if you hire employees, workers' compensation insurance is essential to cover medical expenses and lost wages in case of workplace injuries.
  • General liability insurance: this coverage protects against third-party claims for bodily injury, property damage, or advertising injury.

Understanding the specific insurance requirements for your trucking company and working with an experienced insurance provider is critical to ensure adequate coverage and effective risk management.

FAQs about how to start a trucking company

The profitability of a trucking company depends on various factors, including market conditions, operational efficiency, and the ability to manage costs. While the trucking industry can offer good money-making prospects, it is also highly competitive. Careful planning, effective management, and staying up-to-speed on industry trends are important, strategic actions that can help you increase your chances of success.

Profitability considerations include:

  • Choosing the right niche
  • Optimizing routes
  • Keeping a well-maintained fleet
  • Adapting to changing market demands 

Undertaking thorough market research and analysis, plus detailed financial planning, as part of your business plan can help you assess the potential profitability of your trucking venture and mitigate risks.

 

The timeline for starting a trucking company can vary based on several factors, including the complexity of the regulatory process, the time it takes to get all the necessary licenses and permits, and the procurement of equipment. 

As a general rule, owner-operators can often get started fairly quickly once they have their vehicle, while motor carriers typically have to wait 20-25 business days just to get their MC number.

When considering all process elements, it could take you anywhere from several months to a year (or even longer) to get a trucking business up and running. You should expect a period of intense research, planning, and coordination before launching operations, with key preparation steps including:

  • Business planning
  • Getting the necessary licenses and permits
  • Buying or leasing trucks
  • Sourcing the right insurance
  • Hiring and training staff

When starting a trucking business, the best structure will depend on your specific circumstances, such as the number of owners, the level of personal liability protection you want, and tax considerations.

Choosing the right business structure is crucial for legal and financial reasons, with common options for trucking companies including:

  • Sole proprietorship: this is the simplest model, but the owner is personally responsible for business debts and liabilities.
  • Limited Liability Company (LLC): this structure offers liability protection for the owner(s) and flexible management options.
  • Corporation (Inc.): provides strong liability protection but involves more complex formalities and paperwork.
  • Partnership: this is suitable for businesses with multiple owners sharing responsibilities and profits.

Consulting with legal and financial professionals can help you make an informed decision based on your business goals.

 

Final thoughts on how to start a trucking business

Hopefully, you feel a bit better informed about how to start your own trucking company after reading this guide. From choosing the right type of trucking business and insurance to developing a robust business plan and understanding the ongoing costs and legal requirements.

Starting a trucking business in the USA is a complex endeavor, but it can be highly rewarding. By doing your research and planning properly, you can navigate the regulatory landscape to manage costs effectively to build a successful enterprise in this critical industry.

Looking to start a different type of business?

Is our sample salon startup cost calculator not what you're looking for? Then, please check out our other templates. We also offer solutions for all of your startup needs.

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The startup costs shown here by industry are merely guidelines and average estimates based on information pulled from a variety of sources. While we have attempted to present the most accurate information available, please be aware that startup costs can vary greatly according to a number of factors, including but not limited to state and local fees and contractor quotes. The information presented here is intended to help guide prospective business owners in the search for information on starting a business within a given industry, but should not be interpreted as an exact quote.

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