Why You Should Start A Trucking Company Business
Starting a trucking company today can be very rewarding for many reasons. The logistics industry is suffering from around a 75,000-truck shortage and is estimated to be needing up to 200,000 trucks by 2020. For every single truck today on the highway, there is an estimated of 10 to 20 full truck loads needing to be moved and as the economy keeps continuing to grow, the demand for trucks to move freight will not end. Learning how to start a trucking company business is what I will share with you in this article and the benefits that anyone can receive by owning their own trucking company and not having to buy a truck.
Starting a trucking business makes you money
Owning a trucking company today in America is a guarantee for making money. For every full truck load that is moved, you can see income produced immediately. I always tell people that as soon as you get a load, you get paid and there’s not much time in waiting in-between. Each truck loads worth is determined by the type of trailer your truck is pulling and you are paid by the mile. A good example would be if your pulling flatbed products hauling building materials for 1000 miles, your truck could generate up to $4000.00 dollars one way. For this reason, it is very important to decide the proper trailer that you will use to move freight with and to make sure your driver can manage this type of trailer.
Within the transportation industry there are several types of trailers used to haul freight. The highest paying trailers are usually flatbed with refrigerated trailers following next. General box freight usually pays less but the abundance of freight available is endless. A person can make around $50,000 dollars up to $75,000 dollars a year by owning any of these type trailers with their trucking company and can keep their truck moving daily.
When getting started to move freight with your new trucking company, for the first 6 months you will be limited to getting freight since your company is new. It is very important to work with a freight broker that can assist you with getting dispatched and finding consistent freight. Freight brokers have the job of working with hundreds of different shippers that would allow you to pull freight as a new trucking entity. After a few months of operating with your own federal authority, more shippers will begin to give you freight as your time in business grows. Regardless of being new, anyone can keep their trucking business moving freight daily with the help of a good freight broker and its very important in the beginning to contact a freight broker to discuss the freight your truck will be hauling.
Starting a trucking company is affordable
If your wanting to start a trucking company today, it can be done for around $1200.00 dollars. This is usually the cost of your filings and some states can be different so make sure you check with a consulting company like LFS about the fees you would be looking to pay. One requirement you would have is to apply for your federal MC and DOT numbers. This is around $300.00 dollars. After applying with the FMCSA you would then apply for your UCR filing and IFTA account so you can move freight across multiple states. These filings can be done by professional company’s who would file on behalf of you so that there are no mistakes made and the authority is granted after 21 days of your filing date. The FMCSA makes you wait for 21 days before allowing your MC Authority to be granted Active.
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The last requirement would to have a Liability insurance policy that is added to your MC Authority of a minimum of $750,000 and the FMCSA will grant you active to move freight.
Listed below are the Standard filings needed to start your own trucking company:
USDOT Number – This number from the U.S. Department of Transportation (DOT) is used to collect and monitor your company's safety information, inspections, crash investigations, etc.
Operating Authority – All for-hire carriers must have authority from the DOT to haul freight across state lines. Your authority also determines what types of freight you can haul.
Heavy Vehicle Use Tax – Applies to all trucks that weigh more than 55,000 pounds.
International Registration Plan (IRP) - IRP distributes registration fees based on distance traveled in each U.S. state or Canadian province. You have to register on your state's transportation website.
International Fuel Tax Agreement (IFTA) – IFTA is an agreement among the lower 48 U.S. states and Canadian provinces to simplify reporting of fuel use by carriers who drive in multiple states. Carriers file a quarterly fuel tax report that determines their tax and distributes it to the states. Your truck must have an IFTA decal on it, and you have to apply for a new one at the beginning of every year.
BOC-3 Filing – This names your company's process agent, who will be the one to get served on your behalf in any legal proceeding. You need to designate a process agent in each state where you maintain an office or establish contracts.
After these filings have been made, you usually will have between 21 days up to 30 days before getting your first load. The FMCSA will also include you into the New Trucking Entrant Program for the first year and you will have to meet with a DOT inspector for your first safety audit within your first year. You learn more about the safety audit here on the FMCSA website https://ai.fmcsa.dot.gov/NewEntrant/SafetyAudits.aspx This allows anyone to begin to learn the requirements and your audit should go be quite easy to pass. There are several companies who will help you learn and keep your new trucking company compliant to the guidelines of the FMCSA and help you prepare for the safety audit and I highly recommend you working with one of these. One of the most trusted companies that can help you stay compliant and meet your DOT safety audit is