Getting into the trucking industry can be a complex but lucrative and even satisfying endeavor. Trucking companies are part of our country’s lifeblood, ferrying goods and people nationwide. However, it can be challenging, and you may need help starting your trucking business.
If you are considering starting a business, you have a lot to do. From registering your trucking company to opening a business bank account, you may need help getting answers on how to start a trucking company. Simplex is here to help answer your questions and ensure you get your business off the ground.
Step 1. Register your Business (Truck Permits + Taxes)
When you start a trucking company, you need to register your business. As the owner-operator or one of the multiple owner-operators, there are steps you must take for your own trucking company before you can start driving.
To start a business, there are multiple forms that you need to complete. For trucking businesses, you may have trucking-specific paperwork, particularly for a limited liability company (LLC) or partnership.
To register your own trucking business, you will need all the following paperwork and information:
- Employer identification number (EIN)
- Motor carrier number
- USDOT number
- Unified carrier registration permit
- Heavy vehicle use tax
- International Fuel Tax Agreement (IFTA) and IFTA’s quarterly tax returns
- International registration plan
Step 2: Get the Right Trucking Insurance and Operating Authority
When building a successful trucking company, you need to get the proper trucking insurance before you take to the road. Even a self-owned trucking company must have insurance and licenses before operations can begin. As a business owner, you need various personal liability protections to ensure you and your team do not face consequences that can impact your personal assets.
You may also need to seek primary liability insurance. Rather than paying for the costs of your commercial truck or injuries, primary liability insurance covers the costs of repairs to any vehicles damaged in an accident if you are the liable party.
To build a successful trucking business, you will need a certificate of insurance (COI) before you or your drivers take action, even if you seek a commercial driver’s license for all your drivers. This certificate shows you are insured, which tells freight brokers you are ready to carry cargo.
Step 3: Get an Electric Logging Device (ELD)
The average trucking company has to manage a lot of tasks to be successful. Keeping track of this information—such as hours of service (HOS), fuel needs, and other information—may be too much for a company driver on the road. That is why you need an electronic logging device (ELD) when you start a trucking company.
Your ELD tracks everything trucking companies need to focus less time on tracking all the details and more time on their profit margin. Our Simplex ELD manages all this information for you, including fuel tracking, crash reporting, and more. This tool can be a lifesaver for small business administration.
As you prepare the equipment for your business, you may also need to seek out the trucks themselves. You may need to set up a terminal rental adjustment clause lease from a leasing company. These leases designate your commercial vehicles as property used for your business, not personal property. That can reduce the costs of your lease.
Step 4: Freight Factoring
You may now have all your personal liability protections, business license, and trucking insurance to start loading your trucks and hitting the road. The problem is, you still need cash flow, and getting freight approvals and payment can take months.
Even if you are taking advantage of load boards to get jobs, you may also need a freight factoring program to take off the pressure of that long wait. Freight factoring programs pay for these freight loads in advance so you get paid when you finish a haul. That means you do not have the financial pressure of waiting 30 to 90 days for payment every time you complete a job.
Step 5: Obtain the Right Permits
Once you complete these steps and secure startup funding, your business operations are nearly ready to begin! However, many owners still need to get the right business permits. For a new trucking business, that means more than getting private truck school lessons or hiring drivers who already have their CDLs.
In terms of location, there are certain states that require individual permits in order to operate there.
These states include:
- New York, where you will need the NYHUT Permit
- New Mexico, where you will need the New Mexico Permit
- Oregon, where you will need the Oregon Permit
- New Jersey, where you will need the New Jersey Business Registration
- California, where you will need California Permits and/or Licenses
- And finally Kentucky, where you will need the Kentucky License
You may also need special permits to haul cargo internationally, such as in the Canadian provinces. There are also three other permits that you might have to consider for your new business. These permits include:
- The Automobile Transporter Permit
- The Oversized, Overweight, and Over-dimensional Permit
- The Liquor Transport Permits
Step 6: Staying compliant with the DOT
Now that you have a solid business plan and are ready to get your business off the ground, you are nearly ready to begin hauling freight. But even a small business where you are your own boss must comply with the Department of Transportation (DOT) and Federal Motor Carrier Safety Administration (FMCSA). If you are not compliant with their safety regulations, your commercial trucking business cannot grow.
The FMCSA is a trucking authority that sets specific standards all truck drivers must follow. Following these standards—like drug and alcohol testing—keeps your insurance cost low so you can focus on equipment financing and other expenses as your business grows.
Step 7: Get a Fuel Card
Fuel expenses are one of your new trucking company’s constant ongoing costs. However, calculating all your business expenses is vital. That is why ensuring your truck driver has the fuel they need at a reasonable price is so important.
While having a fuel card is unnecessary, it can help you keep fuel costs down and avoid needing loans to keep your company afloat. Many other trucking companies use these fuel cards to save money over time.
Step 8: Now, it’s time to get you loaded!
Starting a new business can be difficult, but it can also provide a new income stream and a new start to your financial success. Dealing with startup costs, setting up your business bank account, learning how to establish contracts and hire employees, and knowing how to use your startup funding can be tough. That is true whether starting with only one truck or a whole fleet.
Finally, the last step for your business to begin operating is to find profitable loads. In order for your business to make money, you will need to put in a lot of time to find brokers that will give you transportation jobs. However, this stress can be easily taken off your shoulders if you find a dispatching service, where you will have an agent dedicated to finding these loads for you!
At Simplex, we understand how difficult it can be to get your startup going, and we are here to help get your trucking business off the ground. If you have questions about how our team can help you start your trucking company, contact us about the steps above. Call us today or fill out our online contact form.