10 Crucial Steps to Kick-Start Your Trucking Company

Are you ready to hit the road with your own trucking business? The trucking industry offers exciting opportunities for entrepreneurs, but getting started can seem overwhelming. Wondering how to start a trucking business that keeps your wheels turning and your profits soaring? Don't worry – we've got you covered with these 10 essential steps to launch your trucking company and setting yourself up for success.

What makes entering the trucking industry so great? You can start a trucking business with little to no experience. And once you get your business off the ground, there are a lot of ways to grow your business - from adding more trucks to expanding your reach. But just like beginning any entrepreneurial endeavor, there are certain foundational steps you need to take in order to be set up for long-term success.

Obtain a Commercial Driver's License (CDL)

Can you own a trucking company without a CDL? No. Before you can start hauling freight, you'll need to obtain a Commercial Driver's License (CDL) as required by the Federal Motor Carrier Safety Administration (FMCSA). This license is crucial for operating commercial vehicles and is required by law. To get your CDL:

• Complete a CDL training program

• Pass written knowledge tests

• Demonstrate your skills in a practical driving test

Remember, different classes of CDLs allow you to operate different types of vehicles, so you should think about what kind of freight you plan to haul when securing your CDL, as this will impact the steps you need to take when applying for your trucking authority (more on this below).

Select the appropriate equipment for your business

Now that your legal paperwork is in order, it's time to think about the actual machinery. Choosing the right trucks and trailers (as well as how much you plan to pay up front vs. over time) is crucial for your business's efficiency and profitability. Consider:

• New vs. used equipment

• Purchased vs. leased

• Type of freight you'll be hauling

• Fuel efficiency

• Maintenance costs

• Financing options

Best practice: Get clear on what your business goals are so you can invest in reliable equipment that aligns with your goals and budget. After all, having the right equipment gives you a competitive advantage on the road! 

Register your trucking business

Now that you’ve secured your CDL, registering your trucking business is a critical next step in establishing your company legally. You'll need to:

• Choose a business structure (e.g., LLC, Corporation, Sole Proprietorship, S-Corp, C-Corp)

• Register your business name

• Apply for an Employer Identification Number (EIN) from the IRS

• Register with your state's Secretary of State office

As a soon to be business owner, proper registration is incredibly important as it protects your personal assets and gives your business credibility with potential brokers, clients and partners.

Acquire necessary permits and licenses

The trucking industry is heavily regulated, and you'll need various permits and licenses to operate legally. As a first step, file an application for your USDOT number. You’ll also need this to haul any kind of freight. If you plan to haul across state lines, you will also need to file an application with the FMCSA to obtain your operating authority. 

Additionally, obtaining a business license is crucial to ensure you meet all legal requirements specific to the trucking industry.

There are several additional requirements, but we’ve outlined the most critical ones below:

• USDOT Number - intrastate only

• Motor Carrier (MC) Number - interstate loads

• International Registration Plan (IRP) tag

• International Fuel Tax Agreement (IFTA) decal

• BOC-3 filing

To learn more, check out our How to Get a DOT Number: A Step-by-Step Guide.

Understand legal requirements for trucking

Once you've gotten your business set up, we recommend you familiarize yourself with the legal landscape of the trucking industry. Important requirements to be aware of include:

• Hours of Service (HOS) regulations

• Electronic Logging Device (ELD) mandate

• Weight limits and restrictions

• Hazardous materials regulations (if applicable)

• State and federal transportation laws

Staying compliant with these regulations are crucial for avoiding fines, maintaining a good reputation in the industry, building strong broker relationships, and setting the foundation for more financial success. 

Get the right insurance coverage

Proper insurance is a non-negotiable in the trucking industry, specifically proof of liability insurance coverage. You'll need coverage for:

• Primary liability

• Physical damage

• Cargo insurance

• Bobtail insurance

• Workers' compensation (if you have employees)

Quick tip: consider working with an insurance agent who specializes in trucking to ensure you have adequate coverage for your specific operations.

Set up a dedicated business bank account

As an owner-operator in the trucking industry, you're not just a driver - you're a business owner. One of the most crucial steps in starting a trucking business is creating a dedicated business checking account. Separating your personal and business finances is essential for:

• Accurate bookkeeping

• Simplified tax preparation

• Building business credit

• Maintaining professionalism with clients and vendors

Once you have a dedicated account set up you can track all your expenses, prepare for taxes and secure all of your business assets and needs. Keeping a close eye on your operational expenses and cash flow is key to staying afloat in this competitive industry.

We recommend banking with a partner that specializes in small business or trucking needs to help you easily share business funds with other members or your team or company and automatically earn interests and capture other savings.  

Develop a pricing strategy for your services

A solid pricing strategy is crucial for profitability in the trucking business. Here are the key factors to consider:

• Operating Costs: Understand your fixed (fuel, maintenance, insurance) and variable expenses (costs that fluctuate with miles driven).

• Spot Market Rates: Stay informed about current rates for moving freight on-demand versus contracted rates.

• Profit Margins: Set desired profit margins based on your financial goals and break-even analysis.

• Seasonal Fluctuations: Be aware that demand and rates can vary with the seasons, affecting your pricing.

• Deadhead Miles: Minimize costs associated with miles driven without cargo, which can impact your bottom line. Remember, every mile counts, especially when considering fuel costs.

Create a carrier packet

A carrier packet (also known as a new carrier packet or carrier setup packet), is a collection of essential documents and information that a trucking company or independent owner-operator must provide to brokers, shippers, or logistics companies before they can start hauling freight for them. 

Essential documents for your Carrier Packet

• Broker-carrier agreement: a legal contract between a freight broker and a carrier (typically a trucking company).

• Notice of Assignment (NOA): If you use factoring services, this document authorizes the factoring company to collect payments on your behalf.

• W-9 Form: This tax form verifies your business's legal entity for brokers and customers.

• Certificate of Authority (COA): This proves you're authorized to operate as a motor carrier under your own authority.

• Certificate of Insurance (COI): Proof of your liability insurance coverage is crucial for securing loads and meeting broker requirements.

• Inspection Reports: Maintain and include up-to-date maintenance logs and USDOT inspection reports for your trucks. These demonstrate your commitment to safety and compliance.

For more information on how to create a carrier packet and other important documents that may be required, check out Carrier Packet Essentials:  A Guide for New Authorities in the Industry

Build relationships with freight brokers

Developing strong relationships with brokers can provide a steady stream of business. If you are either working directly with a broker or using a load board, broker-to-carrier relationships matter and establishing relationships with brokers by covering their preferred lanes and offering reliable service can lead to consistent, higher-paying loads over time.

Simple tips to build these relationships:

• Deliver loads on time and in good condition

• Communicate clearly and promptly

• Be reliable and professional

• Offer competitive rates

Though, for new authorities it can be hard to find brokers that work. So here are some brokers that we’ve found work with newer authorities:

• CH Robinson

• Total Quality Logistics (TQL

• Landstar

• Coyote

• Beemac Logistics

• Best Bay Logistics Inc

• Bieri Brokerage

• Integrity Express Logistics Koola Logistics

• Logistic Dynamics (LDI)

• Nolan Transportation Group LLC

• Royal Transportation Services

• Schneider

• SIO Logistics

• Transportation One

• XPO Logistics

By following these 10 crucial steps, you'll be well on your way to launching a successful trucking venture. Remember, starting a trucking business takes time, effort, and patience. Our final words of advice: stay focused on your goals, adapt to challenges, and keep moving forward!