How to Start a Trucking Company: 9 Steps to Ensure Success

The Motor Carrier Act of 1980 deregulated trucking businesses, removing the barriers to entry that inflated trucking rates for decades.^[1]Congress.gov. “H.R.6418 – Motor Carrier Act of 1980“. Accessed April 5, 2022. Since the industry’s deregulation, the number of licensed carriers has ballooned. Currently, there are over 800,000 private carriers and more than 900,000 for-hire carriers in the United States.^[2]Policy Advice. “How Many Trucking Companies Are There in the United States?“. Accessed April 5, 2022. If you’re interested in joining the thousands already profiting from this booming industry, you may be wondering exactly how to start a trucking company. In which case, we have your answer!

We’ve developed a step-by-step guide to help you get the trucking business of your dreams off the ground. Keep reading to learn the necessary steps of how to start a trucking company destined for success.

What to Know Before Starting a Trucking Company

For those starting a business, it’s critical to assess the trucking industry and any personal experience you have in trucking. Becoming a truck driver requires specific licenses and skills, so it’s difficult to start a trucking business without prior experience or knowledge of the industry.

You can start a trucking company without being a truck driver yourself if you hire qualified truck drivers. Still, a firm understanding of the industry is essential to start on the right foot. To ensure you have a fundamental understanding of the trucking industry, consider researching the below questions:

• How are trucking jobs booked?
• What type of cargo is in demand in my state?
• How many hours can a truck driver drive per day?
• How much does the average truck cost?
• Is there a specific trucking gap in my local market?

Because answers to these questions vary by state, it’s best to research these questions according to the state(s) in which your business will operate.

Gather experience and get a commercial driver’s license

If you do not have experience in trucking, one of the best ways to understand the industry is to join an existing trucking firm. The company you join may sponsor you to obtain your commercial driver’s license (CDL).

The age at which you can obtain a CDL varies by state. In some states, the minimum age to obtain a CDL is 18 years old. However, if you want to travel interstate, you must be 21. It’s also worth noting that there are three types of CDL licenses: Class A, Class B, and Class C.

Step 1: Write Your Trucking Business Plan

After confirming that you have the appropriate experience and/or industry knowledge required for starting a trucking company, it’s time to write your trucking business plan.

A business plan is an essential document outlining your business’s goals, competition, expected revenue streams, and other core details. There are excellent online templates to help you build a trucking business plan. Hiring professionals to write your trucking business plan is another option you might consider, especially if you plan on applying for loans.

Define your business goals

Defining achievable goals is a good way to start planning any business venture. In terms of a trucking business, decide how many trucks you plan to operate, what type of cargo you want to move, and how many jobs you expect to acquire in the first few months of operation.

Knowing how much revenue you need to keep your business afloat, as well as provide your personal necessities, is essential for the goal-defining process.

Pick a name for your trucking business

The next step in our guide on how to start a trucking business is choosing the perfect business name. While many trucking businesses have names related to their family or other traditions, others utilize geographic indicators in their names (i.e., West Houston Trucking Company). If location is critical to your business, using a geographic indicator in the name can be helpful.

Choose your industry

Now it’s time to decide which trucking industry is best for your business. For example, are you going to carry dry cargo or tankers? Do you want a flatbed truck or another type of truck? Also, will you be traveling locally, statewide, or interstate? These questions will help you pinpoint into which sub-industry your trucking business falls.

Set your rates per mile

The next step is setting your rates per mile, which you will use to quote potential clients. However, until you have a full understanding of your costs, choosing the optimal rate per mile can be difficult. 

Start by calling local trucking companies in your niche and service location. Ask for quotes for any routes you plan on running. Calculate their average rate per mile, then choose a price in accordance with industry standards.

While this is a good starting point, you will likely need to adjust your rates as you pick up jobs and gain a better understanding of your costs.

What equipment or vehicles do you need when you start a trucking company?

If you want to start a single-person trucking operation, all you’ll need is a truck. Which type of truck depends on your industry and cargo. Let’s look at which types of trucks are most commonplace in the trucking industry:

• Flatbed freight truck
• Semi-trailer freight truck
• Tanker freight truck
• Dry van freight truck

Step 2: Choose a Business Structure

Below, we look at four primary business structures you can choose for your trucking company:

Limited Liability Company (LLC)

A limited liability company (LLC) limits your personal liability as a business owner. While it costs money to start an LLC, it’s a small price to pay for personal liability protection. This is suitable for individual business owners and groups.

Partnership

Trucking business owners can form a partnership between two or more people. While you don’t need to formally register partnerships, it’s always best to have a documented agreement to avoid future conflict or confusion.

Sole Proprietorship

A sole proprietorship is the most informal type of business structure. If you’re a one-person owner, you can conduct business under your name without incorporating. However, this will leave you exposed to personal liability.

Corporation

A corporation is similar to an LLC, but it requires much more paperwork and reporting. However, it allows you to issue stock in your company, which is useful for those seeking to fund a large business model.

Step 3: Obtain a Business License and Permits for Your State

Because each state has its own business requirements, research your state’s requirements for business licenses to begin the registration process. You may have to pay a small fee to obtain a business license.

Permits needed for your trucking company

Depending on what type of freight you plan to carry, there are various permits you may need to obtain. (These are covered in detail in Step 7.)

Step 4: Plan Your Budget

While planning and budgeting for your trucking business will vary depending on your trucking niche and the size of your business, make sure to factor in the following common costs:

• Truck purchase or rental
• Truck storage
• Fuel
• Load board membership
• Licensing and registration
• Incorporation
• Business insurance
• Vehicle insurance
• Maintenance
• Staffing 

Open a business account

Opening a separate business account can make your accounting processes much easier. If a traditional bank won’t open a business account for your trucking business, check out local credit unions or online banking institutions.

Research startup financing options

To fund their initial operations, many new business owners search for financing options. Because accessing business loans can be difficult if you don’t have previous experience as a business owner, you might consider exploring SBA loans, microloans, crowdfunding, peer-to-peer lending, and other alternative financing options like business lines of credit.

Step 5: Get Insurance for Your Business

Business insurance is necessary if you want to shield your business from unexpected costs. This insurance often covers property damage, lawsuits, and a host of other large expenses. Before choosing a plan, ask for quotes from multiple insurance providers. 

Step 6: Get a Truck and/or Trailer

Now, it’s time to find a truck or trailer. While plenty of affordable second-hand trucks are on the market, these may come with large maintenance expenses. Purchasing a newer, more expensive truck can sometimes save you money in the long run. Alternatively, you can also lease trucks to avoid the responsibilities and costs of ownership.

Equipment and vehicle insurance

In addition to traditional business insurance, you need commercial truck insurance, too. Because truck accidents can have significant consequences, you must have adequate coverage for your trucks and third parties that might be involved in an accident.

Step 7: Compliance with Federal and State Regulations

There are many regulations with which you need to comply to operate a trucking company. We explore some of the most important registration requirements below, but be sure to check out the FMCSA website for a full list of required permits.

Register vehicles with the proper authorities

Below is a list of authorities with which you should register your trucking business vehicles. 

USDOT and Motor Carrier (MC) Authority Numbers

Your Motor Carrier (MC) number provides operating authority dictating the type of cargo your company can carry on its trucks. Additionally, your USDOT number helps authorities track your safety record and regulatory compliance.

Both of these numbers are attainable via the FMCSA website.

International Registration Plan (IRP) License Plate

This registration plate allows you to drive throughout the United States. It can also help you drive in some Canadian provinces.

Heavy Highway Use Tax Return

The IRS requires you to fill out Form 2290 if you need to pay a federal excise highway tax applicable to trucks weighing over 55,000 pounds.

Unified Carrier Registration (UCR)

Registering with the UCR helps verify that you have insurance in the state where you operate.

BOC-3 Form

This form designates a person in each state in which your business operates to whom legal documents may be served. This is essential if you run a trucking company operating in multiple states.

Step 8: Get Set Up to Accept Payments

Gone are the days of cash payments. Your potential clients want to partner with a company that accepts credit card transactions. That said, it’s now time to set up your payment processing platform. To do so, you need a merchant account and payment processor, which work in unison to simply and seamlessly process credit cards transactions.

Many trucking companies provide in-person and online payments to their clients. Finding a payment processor that offers physical credit card readers and an online payment gateway can make the process much smoother. 

Step 9: Utilize Load Boards to Find Jobs

Load boards are marketplaces for the trucking industry. While building your trucking business’s clientele, load boards will become your best friend. Here you can post details about your empty trucks and find information about loads currently on offer. Using a load board effectively—which entails building relationships with suppliers, freight forwarders, and other relevant stakeholders—ensures a constant flow of work. There are many load boards online, most of which will require a subscription fee for use.

Final Thoughts On Getting Your Logistics Trucking Company Ready to Roll!

If you love the freight industry, the low startup costs associated with modern trucking businesses may make this an attractive venture for you to start. After following the above steps outlining how to start a trucking company—including, most importantly, securing a merchant service provider—you’ll be cruising down a high-revenue highway with this article in your rearview.