A company that helps businesses and individuals to ship goods, personal or commercial items, raw materials and other possessions from one location to another using trucks, trailers, vans or any other commercial vehicle is known as a Trucking Company. Trucking Business can be a highly profitable venture because the entire economy is dependent on shipment and movement of goods every single day but it is highly competitive in nature. If you want to start a trucking company or a trucking business then this post is for you. There several types of trucking companies that you can start and we have discussed each one of them in detail below. In a small Trucking company with a single or two trucks the owner operator is the same person.
Trucking companies serve the American economy by transporting raw materials to the manufacturing companies and then shipping the finished goods to the retail outlets and distribution centers. Therefore truckers they play a major role in keeping the markets moving forward.
If you are looking to start a trucking company then in this post you will find complete details about the cost of starting up and steps to follow. This post also covers in depth details about starting as a trucker and being both owner operator.
Cost of Starting a Trucking Company
- Average cost of starting a small trucking company is somewhere between $10,000 and $20,000.
Steps to start a Trucking company:
- Company Formation
- Apply for trucking authority
- Choose the Type of Trucking Business
- Getting a Truck (Commercial motor)
- Getting Permits and Insurance
- Marketing your Trucking Business
Types of Trucking Companies
Table of Contents
There are several types of Trucking Companies that operate under different models but primarily there are 4 types of trucking companies and we have discussed each one in detail below:
For Hire Truckload Carriers
For hire truckload carriers are a type of trucking companies that earn their revenues by transporting other companies freight. For hire truckload carriers sell their fleet capacity to other companies who are in need of logistic support and supply chain management.
Generally, for hire truckload carriers will lease out their trucks, trailers, and drivers to another company that needs their services. Since truckload carriers do not manufacture or ship their own goods their entire business runs on the freight demands of other companies.
The disadvantage of working for hire truckload carrier is that freight contracts turnover and are offered up to other trucking companies to bid on.
You might want to associate and start working with a for hire trucking company and hauling the freight that they run, but remember that they will always not win the bid for that customer’s freight contract.
This means you must be aware for the potential of the freight changing. Often times, for hire truckload companies have multiple customers to protect against the loss of one customers freight.
Mostly for hire truckload companies have a large percentage of their driver fleet made up of over-the-road drivers and as a new driver in the industry this is where you may have to start. You can start a trucking company under the for hire truckload model.
Less Than Truckload (LTL Trucking) Company
LTL trucking is a mode of trucking where a freight is relative small and truck carries multiple freight from various businesses. If you think about shipping products from one location to another there are numerous products that are being shipped to and from consumers, but if there is a freight that is too big to be sent through the general postal service that’s where less than truckload carriers are helpful.
A less than truckload company will typically operate either a 53′ trailer or doubles to move smaller freight that need home or business delivery all across United States. One less than truckload trailer might be shipping 10-40 different products to all different businesses.
LTL companies will have their drivers and dispatch schedule the delivery of these goods to the customers home or they may have the customer come pick up the freight from their local distribution center. You may find that LTL trucking companies have 2 different types of truck driving jobs on offer and many times they specifically ask for a driver that can handle long haul freight.
Companies that focus on hauling LTL will typically employee 2 different types of drivers. The first type of driver would be a line haul driver that runs dedicated freight from point to point. This may be distribution center to distribution center. Because these drivers run back and forth they typically get consistent miles, and regularly scheduled home time.
The second type of driver the LTL companies employee is typically a city driver who runs a day cab making local deliveries all through the city. These drivers are usually home every day, but they also have to navigate city traffic all day and they are required to meet with numerous customers in a day. One load might have 12 stops or more so a city LTL driver does a lot of freight handling.
Largest LTL Trucking companies in the World by revenue (2017 – 2018)
| Rank | Carrier Name | 2017 Revenue ($ million) | 2018 Revenue ($ million) | YoY % Change 16-17 |
| 1 | FedEx Freight | $6,343 | $7,352 | 15.9% |
| 2 | Old Dominion Freight Line | $3,304 | $3,983 | 20.6% |
| 3 | XPO Logistics | $3,641 | $3,830 | 5.2% |
| 4 | YRC Freight | $3,033 | $3,153 | 4.0% |
| 5 | Estes Express Lines | $2,457 | $2,787 | 13.4% |
| 6 | UPS Freight | $2,598 | $2,706 | 4.2% |
| 7 | ABF Freight System | $1,949 | $2,128 | 9.1% |
| 8 | R+L Carriers | $1,580 | $1,692 | 7.1% |
| 9 | Saia Motor Freight Line | $1,405 | $1,654 | 17.7% |
| 10 | Southeastern Freight Lines | $1,116 | $1,237 | 10.8% |
| 11 | Holland | $1,132 | $1,178 | 4.0% |
| 12 | Averitt Express | $769 | $891 | 15.9% |
| 13 | Central Transport International | $754 | $825 | 9.4% |
| 14 | Forward Air | $656 | $748 | 14.0% |
| 15 | Dayton Freight Lines | $571 | $659 | 15.4% |
| 16 | Pitt Ohio Transportation Group | $556 | $659 | 10.7% |
| 17 | AAA Cooper Transportation | $554 | $606 | 9.5% |
| 18 | Roadrunner Transportation | $464 | $458 | -1.2% |
| 19 | Reddaway | $412 | $424 | 3.0% |
| 20 | A. Duie Pyle | $310 | $351 | 13.2% |
Intermodal Trucking Company
Transporting freight through tractor trailer is not the only way that freight is hauled throughout the world. Inter-modal drivers are usually local drivers that haul rail containers to and from the rail yard.
For many companies, shipping freight through rail can be a much more efficient solution. The problem with using rail to ship freight is that shippers are still required to get their product to the rail depot in addition to making sure the freight is picked up again and delivered to the final customer.
This distribution process requires more hands to touch the freight. First, you need one truck and driver to take the freight to the rail yard. Then the freight is moved by rail the majority of the way.
Once the freight arrives to the final detestation another truck and driver is required to pick it up to get it delivered to the final customer. Hypothetically, the normal truckload process would only have required 1 driver and 1 truck to haul the freight from point A to point B, but because the freight was shipped by rail it ended up requiring 2 drivers and 2 trucks to complete the shipping process.
Because there are more hands involved with shipping freight by rail it typically provides good jobs for drivers that want to haul freight locally. If you live near a major rail hub or shipping port you might want to look into companies that haul inter-modal freight.
Heavy Haul Trucking Company
Many times the goods that we need to move are oversize and heavy that cannot be shipped in a normal trailer or a truck. This is where heavy haul trucking comes into play. A heavy haul trucking company is a very large transporter for moving oversize loads too large for road travel without an escort and special permit.
Companies that specialize in heavy hauling generally have low boy, flatbed trailers, tractors, capable of shipping construction equipment, oil field equipment, heavy industrial machinery and excavators.
Before you start a heavy haul trucking company, you should remember that it requires special permits, specialized trucks and trailer to move heavy and oversize loads on highways that do not allow general traffic. It also has special hours of service for operations.
Interesting Facts About the U.S. Trucking Industry – Start a trucking company
- In 2018, the U.S. Trucking industry has generated US $796.7 billion in total revenues. It is also estimated by the trucking experts that the freight revenue will grow by 75 percent over the next nine years.
- Approximately 5.8% of all full-time jobs in America are related to trucking.
- Trucks move over 70% of all the goods transported across U.S.
- Total Freight trucks move each year in the United States is approx. 11 billion tons in weight
How to Start a Trucking Company?
With trucking industry estimated to grow by 75 percent in the next nine years, starting a trucking business can be extremely profitable. The trucking industry helps fuel the economic growth by transporting raw material to the factories and then transporting finished products to the retail markets and distribution centers. Although, trucking companies play a major role in the economy and the demand for both trucking companies and truck drivers are growing, it’s not so simple to start a trucking company.
Don’t be disheartened because you do not have enough capital like other large trucking companies that have hundreds of trucks and drivers. Approx. 90 percent of trucking companies are owned by people like you and are small fleets of six trucks or less so there’s space in the industry for you to start a trucking company with just one truck. Remember, trucking industry is vast because of the demand and so there’s always a chance for you to start trucking business and grow.
Whether it’s about Starting a trucking company or any other business, there are always risks involved. Of course there will be challenges in the journey but rewards are even better. So, let’s begin exploring how to start a trucking business and grow it organically from ground up.
In this post, you will learn everything about how to start a trucking company with complete details about cost of starting a trucking business, marketing and managing a successful transport company.
Below are the steps that you need to follow to start a trucking company, manage it and grow it into a successful trucking business:
Company Formation and Business Registration
Before you start a trucking company, it is important to form a company in the U.S. There are different types of entities that you can register such as LLC or a corporation.
You can find complete guide to incorporate a business as an LLC or a corporation along with fee.
Apply for Trucking Authority
In general, carriers that move federally-regulated commodities owned by others or arranging for their transport, (for a fee or other compensation, in interstate commerce) are required to apply for a trucking authority.
According to, FMCSA operating authority is often identified as an “MC,” “FF,” or “MX” number, depending on the type of authority that is granted. Unlike the USDOT Number application process, a company may need to obtain multiple operating authorities to support its planned business operations. Operating Authority dictates the type of operation a company may run and the cargo it may carry.
You have to pay a filing fee when applying for Trucking Authority which is mentioned below:
Filing Fees for Trucking Authority
| Action | Fee |
|---|---|
| Permanent Authority | $300.00 |
| Notice of Name Change | $14.00 |
| Reinstate Authority | $80.00 |
Choose your niche in the Trucking Industry before you start a trucking company
As you know that transportation industry is very vast and to get started in it as a trucker, you have to find your niche. By niche we mean what type of trucking company or business model you should choose to start with. Will it be LTL trucking company or you lease out your truck to a for hire trucking company or you want to get into heavy hauling? Whether you want to get into transportation of hazardous goods or chemicals or you want to start an inter-modal trucking company? All these terms used in a trucking business are explained above.
These are the questions one must answer prior to setting out to begin their own trucking company.
Start-up Capital
Many of us think that starting a trucking business needs huge sum of capital, well that’s true to a certain extent but you can start a trucking company with one truck as well.
Average cost of starting a small trucking company is somewhere between $10,000 and $20,000 if you already have a truck.
Freight transportation or Trucking needs cash and every business needs some capital to get started. From getting a truck to getting insurance and all necessary permits, everything will require cash. Will it be new vehicles or rented trucks? There are two ways with which an individual can obtain vehicles; either acquire them outright or get them on a lease. Most of your cash could easily go in purchasing a new truck but that amount can be easily recovered within a year if marketing and operations are managed well.
- If you do not have funds and need capital then SBA (Small Business Administration) USA can help you get a guaranteed loan from a bank to start a trucking business.
- You can also take a look at this guide about Small Business Loans and Financing banks in the US to help finance your trucking business.
- You can also contact Ready Finance which offers commercial truck financing and loans.
Buy a Truck
It can be tough to start a trucking business if you don’t have a truck. Also, it’s not as easy as just going out and buying a commercial truck. You need to make sure you do it the right way. Also, being a commercial driver is not an easy job as it looks. Truck driving can be a rewarding as you keep optimizing your operations and bring your cost down per mile to increase your margins.
Websites where you can purchase used commercial trucks in the U.S. such as truckertotrucker.com and commercialtrucktrader.com.
You never want to have a truck that becomes a burden on you instead of being an asset for your trucking company. Also, you don’t want to get a truck that just breaks down on you when you’re ready to do your first run.
Here are some useful tips for buying a truck:
- Choose a truck that fits your business needs. There are many different types of trucks to choose from. Make sure you get the truck that best fits the type of trucking you will do.
- Don’t say yes to any price offered to you for the very first time. You shouldn’t be afraid to negotiate. If the seller wants to make money, they will be willing to negotiate.
- The most important things is to get the vehicle inspected. It might be worth it to pay a mechanic to check out the truck before you purchase it. This can save you a huge headache later on.
- Work out a payment plan with the seller. If the seller is making demands that you know you can’t meet, don’t be afraid to walk away. You can always find a better deal with another seller.
- Don’t look only in one place to find your truck. Check multiple sources. Compare pricing so that you don’t overspend.
Getting the right truck will take some time and work. But if you do some work which might be time consuming, you can find the truck your company needs without risking major hassles later on.
Helpful Video Tutorial about Buying your First Truck
Rules, regulations and insurance
Rules and regulations are a major factor that needs to be considered. There are different licenses and permits that you require in order to start a trucking company that includes both state registration and federal permits. To know what policies to follow, it is greatly suggested that research is done or assistance is asked from somebody accustomed to the guidelines. Yet another important variable to be taken into consideration before starting a trucking business is insurance coverage, which will cover the truck and the goods being carried because you are liable for the goods in transit.
You can visit the website of Federal Motor Carrier Safety Administration to learn more about the regulations concerning transportation.
Also, check the Department of Transportation regulations concerning truck drivers and how many hours per day a truck driver can be on the road.
A good management strategy
You need a solid strategy when it comes to managing payload and customers. A good management strategy is very essential to running an profitable trucking business. A good management team needs to be experienced in the transport business, especially with vehicle management. If you have anyone in the family or friend circle that understands transportation business then ask them for guidance.
Giving service to Customers
Before you start a trucking company, you need to identify what type of trucking company you can start and what type of customers you want to serve. What types of products will be delivered? Each type of freight has their own set of requirements, so it would certainly be best that this is determined before the company starts its operations. The better rates you provide, the more customers you can retain.
Challenges of starting a trucking business
A trucking company needs both resources as well as good admininstration. One more thing that you need to keep in mind the problem of bad roads. This is not a small problem and it sometimes results in unneeded repairs, freight damage and complete breakdown.
The last problem (however not the least) is of getting great drivers. The image of any sort of company is highly dependent on the kind of employees it hires. Hiring an awful truck driver or being associated with a crash would be a calamity, not just to the finances of one’s business but likewise to the brand image. Recruiting must be done carefully.
How to Market Your Trucking Business for growth?
There’s a lot more to a trucking business than just delivering the load. Being a business owner means multi tasking most of the times. You have to take care of every aspect of running a trucking business which is administration intensive until you’re able to hire people to handle it for you.
In order to grow a trucking business marketing is one of the most important functions you will need to perform. Otherwise, nobody will know about your business. Getting customers and leads is always tough in the beginning and marketing is an ongoing process. You keep getting better with time.
If you need new customers, you have to develop a marketing plan. You need an effective way to make sure your potential clients know about you.
Here are some tips to help with marketing for trucking company:
- Use social media to reach out to potential clients. There are several social media tools that are easy to use.
- Start a direct mail campaign and build your email list.
- Create a trucking website. Your prospects are searching for you online or a similar business like yours.
An effective marketing plan will enable you to reach out to potential customers and get business inquiries. When you start a trucking company, marketing strategy needs to be in place always.
Bottom Line
Trucking companies play a major role in keeping our lives moving forward by delivering products and goods on a daily basis. They fuel the economy by helping factories get raw materials on time and deliver finished goods to the distributors and retailers.
To be successful in the trucking business it takes passion, energy, hard work, resourcefulness and most of all cleverness to keep updated with all the federal and state rules and regulations. Simply starting a trucking company won’t help until you are ready to do everything it needs to be successful in the business.
Successful trucking companies have done their homework and have learnt to address the challenges in the industry.
When starting a trucking company, it is very important to understand the regulations and laws before beginning. Failing to do so could result in unnecessary losses. It’s not hard to make money in the trucking business but you have to learn to deal with unforeseen problems such as truck damage, maintenance issues and freight damage while in transit.
The trucking industry needs a lot of work to get started in but the the rewards are satisfying. If you follow the above mentioned steps to start a trucking company, you can definitely build a profitable trucking business.
Few more small business opportunities and ideas other than starting a trucking company.
Important Links and Websites useful for New Trucking Companies in the U.S.
https://www.fmcsa.dot.gov/registration/get-mc-number-authority-operate
https://www.selectusa.gov/logistics-and-transportation-industry-united-states
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