On This Page:
- Start a Trucking Company of Your Own
- How Big is the Trucking Industry?
- What are the Key Segments of the Trucking Industry?
- What External Factors Affect the Trucking Industry?
- Who are the Key Competitors in the Trucking Market?
- What are the Key Customer Segments in the Trucking Market?
- What are the Typical Startup Costs for a New Trucking Business?
- Is Owning a Trucking Business Profitable?
- What are the Keys to Launching a Trucking Business?
- How to Start a Trucking Business FAQs
- Helpful Videos
- Additional Resources
In this article, you’ll learn how to start and run a successful trucking company.
Start a Trucking Company of Your Own
If trucking is your passion, the business ideas are plentiful. A trucker’s job is one of the most satisfying occupations there is because they can use their creativity and ingenuity to be successful in a variety of circumstances. There are many different businesses that you might want to start on your own from hauling products across the country, to being an owner-operator who delivers goods locally.
No matter what business idea you have in mind, starting a trucking company requires some knowledge about how to run it successfully.
Importantly, a critical step in starting a trucking business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Trucking Business Plan Template here.
Choose a Trucking Business That Works For You
It is important to choose the right type of business to start. A successful trucking business depends on your ability and commitment to work hard and succeed, so it is important to determine which option is best for you so you can invest your time accordingly.
Types of Trucking Businesses
- Ice road trucking is the trucking industry’s seasonal truck driving equivalent of the permanent offshore oil platform. It is trucking by winter roads, usually ice roads, in northern climates, such as the Canadian provinces. Ice truckers drive “reefer” trucks carrying loads of frozen fish or other perishable freight to market during cold-weather months when highway travel would be impossible without special equipment to de-ice/anti-ice the truck.
- Hazmat hauling is the transportation of hazardous materials. It is trucking that requires truck drivers to be specially trained and licensed to transport loads like cement, gasoline, or household goods that are considered dangerous due to their explosive properties.
- Tanker hauling involves the transportation of liquids or semi-liquid cargo. These trucks are often seen carrying fuel, chemicals, and agricultural goods from place to place.
- Oversized load-hauling is when loads that are too large for normal freight trucks are transported with special permits and equipment. These truckers often move things like machinery, building supplies, or extra-wide items from point A to point B.
- Logistics trucking involves transporting goods, supplies, and materials from one location to another for businesses that perform manufacturing or home delivery. These truckers are responsible for moving finished or semi-finished products from the place where they are made to the place where they are needed.
- Auto hauling involves the transportation of motor vehicles. Freightliner truck drivers often move new cars to dealerships, while auto haulers also include trucking companies that specialize in shipping entire car collections from one location to another or trucking cars from auction houses.
- Freight trucking is trucking that is used as a primary source of income by small business owners, but also by large fleets for moving excess inventory and objects that are too big to ship via air freight.
- Owner-operator trucking is when the trucker owns and operates his or her own truck. The truck must be maintained and can only be used with your truck company’s name on it, so truckers who own their truck must also do all of their paperwork, driving, and preventative maintenance.
- Private fleets are trucking businesses where the business owner owns their truck or fleet and hires other people to drive it under the business’ name.
Make Connections in the Transportation Industry
Make friends with other carriers and create partnerships with other trucking companies and transportation businesses that will benefit both parties’ business operations and provide savings within their supply chain process.
You can also join the American Trucking Associations for more insight and support from those in the industry.
Write a Trucking Company Business Plan
Creating a trucking company business plan is essential for success. This document will provide you with a roadmap to starting your business, financial projections, budgets, and any other information that will help you move forward in the direction of your dreams.
Purchase or Lease Your Trucks
After you have decided on the trucking business that you would like to start and have a business plan written, it is time to buy or lease your first truck(s). The type of trucking company you wish to start will determine whether leasing or buying is best for your situation.
Owning your truck(s) means you can write off the truck’s cost over its life, which can reduce your taxable income for this year and potentially help with qualifying for truck financing. Leasing allows truckers to not worry about truck maintenance or repairs, but truck lease payments will be added to their taxable income.
Purchase trucking insurance, get business licenses and permits, register your truck(s), and select truck parts to use that will keep your truck on the road for as long as possible. If you lease or buy your truck from a truck manufacturer like Freightliner Trucks, you can also enroll in Freightliners’ professional driver training academy, which will help truckers become better truck drivers as well as truck owners.
Purchase Other Necessary Trucking Equipment
In addition to the costs of purchasing a truck and insurance, truckers will need other equipment such as:
- Heavy-duty flatbeds
- Cargo lifts or ramps
- Uniforms and trucker hats
- Hoses and nozzle accessories for liquids (ex. water)
Be sure to know what type of trucking operation you will be setting up and what truck supplies your truck will need before purchasing additional equipment.
Get Your Truckers the Right Training and Education
The trucking industry is always changing, so truck drivers must get their CDL (Commercial Drivers License) and get trucker training every year to make sure they are aware of changes to trucking laws and truck safety tips. Truckers should also complete truck driver education online, through truck driving schools, or with truck simulator computer programs.
Do Your Paperwork
Running your own trucking business means doing your own paperwork, so get started on the trucker’s logbook by creating an entry for every hour your truck is in use. Record truck driving hours, trucking miles, trucking expenses, trucker pay earned, and the federal tax filings that your truck company pays quarterly.
Keep Your Business Running Smoothly
In addition to logging daily truck operations, filling out quarterly tax forms, managing finances, and trucker pay, truckers will also need to complete other business paperwork such as:
- Work orders for truck repair and maintenance work
- Truck accident reports when necessary
- Invoices for trucker services provided
How Big is the Trucking Industry?
The trucking industry has one of the largest revenue streams in the nation’s economy. Total industry revenues reached $791 billion last year and employed over two million people, including truckers, dispatchers, trucking company managers, and agents. The industry moves 70% of all goods that are purchased across state lines each year.
What are the Key Segments of the Trucking Industry?
The trucking industry is divided into three key segments: full truckload (FTL), less than truckload (LTL), and couriers.
Full Truckload (FTL) trucking accounts for the largest trucking segment, about 75% of the market. These companies primarily serve customers with freight that is not temperature-sensitive and requires transportation. FTL truckers move products across long distances between truck terminals and distribution centers.
Less than truckload (LTL) trucking is another trucking segment that provides services to businesses in areas with frequent local deliveries. LTL truckers transport truckload shipments to local businesses, warehouses, retailers, manufacturers, government agencies, construction sites, utility companies, and farms.
Couriers, or expedited truck transport, are the third trucking segment and they transport products under 100 pounds including packages, documents, and items. These services generally provide short-distance delivery services within 48 hours, whereas a regular truckload delivery could be anywhere from 1-7 days.
What External Factors Affect the Trucking Market?
The following are among the several external factors affecting the trucking market:
Economic factors directly impact the industry. If there is a large demand for goods or services, truck transportation will rise due to an increase in shipments moving across the country.
With the truck driver shortage on the rise, trucking companies will be forced to increase pay rates to attract new hires. This means larger businesses may reduce their overhead by outsourcing this process to smaller trucking companies that are not as well known.
There is an increasing amount of safety concerns within the truck driving industry regarding accidents caused by tired or distracted truckers.
Autonomous commercial vehicles have been used in truck driving for several years already. Self-driving trucks have been developed and tested through many different industries, including mining and farming.
Alt Image Text: Industry Trends
Who are the Key Competitors in the Trucking Market?
The trucking industry is a competitive one. Trucking company owners have to be willing to work around the clock to succeed in the industry. There are 3 major competitors in the industry: UPS, FedEx, and XPO.
What are the Key Customer Segments in the Trucking Market?
The market has many customer segments that it serves, but there are five key groups that the industry focuses on the most. These include: residential, government/military, food and beverage companies, manufacturing companies, and retail stores.
Residential-Residential customers are those that have small families or live alone. These people have the largest amount of money to spend on food and luxuries, but they generally can’t carry items home from a store because their cars are small. Residential customers also place more emphasis on having fresh produce delivered quickly so they don’t have to go to the grocery store frequently.
Government & Military-Government and military institutions often need supplies shipped around the nation or world. They generally use large vehicles for this purpose, which makes them one of the industry’s largest groups of clients.
Food & Beverage Companies-Food companies rely heavily on trucking services because many foods cannot be refrigerated until they reach their final destination.
Manufacturing Companies-Many manufacturing companies outsource their shipping to large distribution centers where trucks can easily pick up and drop off products without needing to go door-to-door. Sometimes these materials will be delivered directly from a plant or other location while other times they will be produced at another facility before being shipped out.
Retail Stores-The retail industry is one of the biggest users of trucking services because it relies heavily on having merchandise delivered quickly and accurately. These stores order many different types of goods from several different manufacturers, but they all need them shipped reliably for them to be able to sell the products they receive.
What are the Typical Startup Costs for a New Trucking Company?
Typically, start-up expenses for a trucking business can range from $6,000 to over $100,000, depending on the type of truck and clientele.
Some of the major costs include:
- Warehouse – You’ll need to purchase or lease a building with sufficient warehouse space to store your products in addition to making room for employees.
- Office – In addition to the warehouse, you’ll need an office to manage your company’s day-to-day operations.
- Trucks – It’s likely that you will need more than one vehicle when opening your own trucking company, so be prepared to purchase new trucks, trailers, and other equipment at the outset.
- Equipment – Depending on the type of trucking services that you plan to offer, you may need a variety of equipment from ramps to cargo spreaders to specialized cranes.
- Business Licenses, Insurance, and Permits – In addition to trademarking your business name and logo and registering your business with local and federal authorities, you’ll also need all the required commercial drivers’ licenses, insurance, and permits that are necessary to operate.
Is Owning a Trucking Business Profitable?
There is no one-size-fits-all answer to this question, as the profitability of a trucking business depends on a number of factors, such as the type of cargo you haul and the routes you travel. However, most experts agree that owning and operating a trucking company can be profitable if you’re knowledgeable about the industry and run your business efficiently.
One important thing to keep in mind is that there are many expenses associated with running a trucking company, so it’s important to have a solid understanding of your overhead costs. Additionally, profits can vary greatly from month to month, so it’s important to maintain healthy cash flow throughout the year.
Despite these challenges, there are many successful truckers who have launched successful trucking businesses. It’s up to you to determine whether this industry is right for you and your business goals.
What are the Keys to Launching a New Trucking Business?
Starting a business is a great opportunity to be your own boss. It’s also an opportunity to provide jobs for others. Here are some of the keys to launching a trucking business:
- Write a Trucking Company Business Plan
- Read and Understand Employment Laws
- Define Your Company’s Target Market
Most trucking companies are small businesses that are started with the owner’s personal money, loans from family members or friends, and possibly a bank loan. A trucking business plan is an essential tool for making sure you have all of your bases covered before taking on investors or getting any type of loan.
You must be familiar with local and federal rules that control employment practices. This includes making sure you know how much time off is needed for employees who drive more than 10 hours in a day before driving again, what payment methods are required, and what kind of background checks can legally be done on potential employees. Get proper legal and financial advice about these issues before starting your new business.
There’s nothing more important to a trucking business than knowing where it fits in the market. If you don’t plan your business properly from the start, as soon as you begin operations you’ll start losing money hand over fist. The first step is getting a good handle on which other businesses are competing for the same prospective customers and how they’re going after them.
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How to Start a Trucking Company FAQs
In addition to a business license, you need to get a commercial driver's license (CDL) and hazmat endorsement.
To get a CDL, you must apply for a driver's license with your state Department of Motor Vehicles (DMV). Your commercial driver's license will be in addition to your normal driver's license, and you can apply for it when upgrading your driver's license.
Meanwhile, a hazmat endorsement means you have the appropriate commercial license to drive on roadways and deliver hazardous materials. In most cases, you can get a hazmat endorsement after getting your CDL. Some states may have different requirements, so check with the DMV in your location.
There are several methods for new trucking company owners to locate loads. To begin with, it's worth noting that brokers will not always work with start-ups in the freight industry if they don't have a good reputation.
Using load boards is a viable alternative. They provide an open market for new and established businesses with accessible loads.
Another approach to locate freight is to make connections with direct shippers. It will be simpler to obtain top freight if you cultivate friendly trucker relationships. If you meet truckers while on the road, ask them for recommendations on reputable freight suppliers. This may help you get in touch with some excellent shippers or brokers.
Whatever trucking company you open, it's vital to have a few types of insurance to make sure you’re covered.
Outside of the required business insurance, you will also need full-coverage liability insurance for each truck and truck cargo insurance. There are different types of trucking companies out there, but these basics will always be the same.
You can download our trucking business plan PDF template here. This is a business plan template you can use in PDF format.
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