5 Steps to Start a Trucking Company
Are you a truck driver who’s contemplating going into business for yourself? That’s a good idea. Nearly 70 percent of the freight in the U.S. travels by truck at some point in its journey. Current forecasts predict that big rigs will continue to be the dominant freight carrier for the nearly 11 billion tons of cargo expected to ship each year. You’ll earn more money if you’re hauling this freight for yourself rather than for another shipping company. Before you hang your shingle, there are things you should know about operating a commercial trucking company. These five tips will help you start your business on a strong footing, and guide you toward a successful future in commercial trucking.
Step 1: Trucking Company Regulations
The trucking company is highly regulated, and you need to know the laws if you want to stay in business. First off, there are licenses, taxes, and safety requirements. To understand the ins and outs of all of these, you should log on to the commercial transportation website for your state. There are also a host of federal trucking laws that you need to know, including:
- Federal DOT Number and Interstate Operating Authority
- Heavy Vehicle Highway Use Tax Form (2290)
- International Registration Plan (IRP) Tag l
- International Fuel Tax Agreement (IFTA) Decal
- BOC-3 Filing
Another thing you need to know are the Occupational Safety and Health Administration (OSHA) rules that regulate your workplace. As an employer, you’re required to create a safe workplace for your drivers. To make sure you’re following these rules, contact the OSHA offices in your state.
Step 2: Trucking and Insurance Companies
No trucking company can exist without insurance. You’ll need basic coverage that includes collision, comprehensive coverage, specialized coverage, and cargo insurance. You need to understand each of these forms of insurance and how they work. It’s also a good idea to compare the costs and options of insurance packages from a variety of providers. You can use reports from national rating agencies such as The AM Best Company, Standard & Poor, and Weiss Research. These and other resources will help you make the right decision for your vehicles and company.
Step 3: Trucking Company Expenses
Once all of the legal paperwork is done, it’s time to get your big rigs and other equipment. First, you have to select what it is you want, then you must decide whether to buy or lease it. Generally speaking, here is a breakdown of those options:
- When you buy equipment, you put a down payment on it then get a loan for the rest. You own the equipment as long as your payments are current. Once you make the last payment, the trucks and other gear are yours.
- Leasing usually offers lower monthly payments, which are typically structured like rentals. Depending on how your lease agreement is structured, you might own the equipment after a certain amount of payments are made. This is just one of many leasing options available to trucking companies.
If you’re not sure whether to lease or buy, it might be best to work with a CPA who has experience with trucking companies. They’ll take a look at the numbers to help determine your best option. You’ll have to pay for the consultation, but think of it as a good investment in the future of your trucking company.
Step 4: Trucking Company Revenue
If you’re a new owner-operator, you’ll probably get your first customers from a load board. While this is a great way to get started, you shouldn’t rely on it. Load boards require trucking companies to bid at the lowest prices possible. This affects your profits. Worse yet, these boards tend to be one-off loads that don’t lead to you building long-term relationships. Many truckers have said they make twice as much money shipping for a local business than they do from the typical load board job.
If you want to build your business, you need established customers. During the early phases of your company’s life, make sales calls and build a customer list. It’s hard work, but it will pay off in the long haul. You’ll build long term relationships with repeat customers, which leads to repeat customers. As their business grows, so will yours. If you do it right, you might need to hire additional drivers to keep up with the demand that your shipping partner entrusts to your company. It’s a good place to be!
Step 5: Trucking Company Expenses
Proper bidding is the key to higher profits and the overall success of your trucking company. That said, it’s also very tricky. You have to come in low enough to be competitive with other trucking companies but high enough to make the load worth your while. The best way to have successful bidding is to know your expenses, such as maintenance, fuel costs, and truck and trailer payments. You also have to know the costs of your labor. Once you factor all of these costs, you can make competitive bids that still allow you to get paid well for your time and effort.
Bonus Tip: Get DIRECTV for Your Semi Truck!
The first five tips are some of the most important things you need to start a trucking company. This next tip is designed to make hauls more enjoyable for you and other drivers. DIRECTV is the perfect thing to add to your big rigs. The company’s high-definition satellites cover the country from coast to coast. This means you can enjoy your favorite news, sports, and entertainment programming at nearly any truck stop you pull into. Wouldn’t you like to watch your favorite shows when you’re on your breaks? It can help make those long, interstate trips more tolerable. When it comes to TV entertainment in your cab, there’s nothing better than DIRECTV.
Signal Connect is Your Source for DIRECTV
Are you an independent truck driver or fleet owner/manager who’s interested in outfitting your semi trucks with DIRECTV? Signal Connect is your source for satellite TV for big rigs and fleets. As an AT&T Preferred Dealer, we do everything to outfit your trucking company with DIRECTV. We’ll match you with the right viewing package, portable satellite dish, and everything else. Signal Connect also services your account for the entire time you have it. When you call us, you’ll talk directly with one of our reps who will help you with anything you need. If you want more information about DIRECTV for trucking companies, give us a call at 866-726-4182.