Determining Your Best Trucking Companies To Work For
These factors will largely determine which carriers will appeal to you the most.
Overview On How To Start A Trucking Company
There is so much benefit to running a trucking business. You can choose which companies to work with, decide what load to haul and how often youll make the runs. You may also be paid better since you own the company and get a bigger share of the profits.
Despite all the benefits mentioned, however, its worth pointing out that starting a trucking business can be quite overwhelming. It has its hurdles and challenges. Thats why not many people venture into starting a trucking company despite the potential benefits they can enjoy.
This guide is for you if you want to learn how to start a trucking company.
Register For Your Quarterly Fuel Taxes
Your quarterly fuel taxes are dictated by the International Fuel Tax Agreement and the International Fuel Tax Association. You will need to register with and order decals from your state agency that administers IFTA regulations. All trucks must have an updated IFTA decal to be in compliance.
Resource: US State Website Directory
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Quick List Of Requirements To Apply For A Tow Truck Company License
See Requirements section for detailed descriptions. Make sure you provide all requirements otherwise, your application is incomplete. DCA can only consider complete applications for license issuance.
- Basic License Application
- Sales Tax Identification Number OR Application Confirmation Number
- Roster of Vehicles
- New York State Commercial Truck Registrations
- Department of Buildings Document
- One Current Color Passport-size Photograph of License Applicant
- Business Information
- Repair Shop Registration
- Proof of Workers Compensation Insurance
- Personal and Property Liability Insurance for Tow Trucks
- DCA Trust Fund Enrollment or Copy of Surety Bond , properly signed
- Proof of Right to Use Premises
- Roster of Employees
- Granting Authority to Act Affirmation
- Fingerprints and Processing Fee
- Inspection of Your Premises and Trucks and $50 Inspection Fee per Truck
- License Fee
Submitting your application does not mean your license is automatically approved.
To Drive Or Not To Drive
There are a couple of different ways to start a trucking business. One is to run your business using sub-contractors as drivers. Subcontracted drivers have their own trucks, so you dont need to lay out capital for the vehicles. The drivers are also responsible for maintaining and insuring their trucks, all of which saves you time, money and hassle. You wont have to provide drivers with benefits, either, but you may need to pay them higher wages than in-house truckers to make up for their higher costs. Youll also have less control over the drivers and may face challenges finding drivers to fulfill contracts during times of high demand.
The other way to run your trucking business is using your own trucks and hiring the drivers as employees. Youll pay more to start up and operate this type of trucking business, but youll have more control since the drivers are employees. You wont have to worry about finding driversinstead, your concern will be keeping all of your drivers busy.
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Choosing A Process Agent
You will need to choose a process agent who can represent you in regards to court papers. You will need to have a process agent for each state your trucking company operates in. They are used if there ever is an issue where court papers are to be served to your trucking company in a state other than the state your company is registered in.
What Is The Fmcsa
Part of the U.S. Department of Transportation, the FMCSA develops and enforces federal safety standards for commercial vehicles. Areas the agency oversees include CDL standards, carrier safety scores, drivers hours-of-service and driver medical examinations. The FMCSA also provides funding for states to conduct roadside truck inspections and other safety programs.
Trucking is a heavily regulated industry. Before your company can begin operating, there are numerous government requirements you will need to meet and also keep current.
This checklist walks you through all the steps necessary to gain your authority and operate legally as an interstate trucking company:
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Acquire A Business License
The first step to take is to acquire your business license. And, you will have options.
In the US, there are four types of business structures/entities to choose from.
I usually suggest that trucking companies go with an LLC because it gives business owners many of the same protections of a corporation with the ease of a sole proprietorship or partnership. You may be able to have your licensing fees paid by leveraging an economic development grant.
To acquire business licensing, go to your states Secretary of State website for more information.
Track Expenses Stay Tax Compliant And Avoid Cash Flow Issues
Being an owner operator requires constant attentiveness. Stay updated on filing requirements and renewals. Remember, decals expire.
Missing deadlines or expiration dates can cause you to lose good standing and acquire significant penalties. You could even have your LLC authorization revoked.
Another aspect of owner-operator trucking that remains important after initially starting your trucking company is tracking expenses. Trucking is reliant on cash flow. Money evaporates quickly through fuel purchases, truck payments, and more. Its important that you find a way to replace that money quickly.
Factoring solves any potential financing issues caused by the discrepancy between the time it takes to receive money and how quickly it gets used. Without factoring, shippers and brokers might wait to pay invoices for as long as 45 days. Thats a big delay.
With factoring, youll receive up to 98% of your unpaid invoices within 24 hours. Because of the quick turnaround, you can get back on the road and keep going. Stop turning down loads. Keep moving your trucking business forward.
So how exactly does factoring work?
Essentially, owner-operators can sell their unpaid invoices to a factoring company at a slight discount.
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What Is An Owner
Another trucking company comes in the form of an owner-operator. An owner-operator is someone who owns a small business and also runs the companys day-to-day operations. The term owner-operator is used in many industries, but it often refers to trucking.
Becoming an owner-operator in the trucking industry is a way to use your knowledge of trucking, without having to necessarily be behind the wheel, though thats still an option. It can come with autonomy and freedom, but it also requires more responsibility and business skills.
Here are the steps you can take to start a trucking company:
How Much Does It Cost To Start A Trucking Company
Now that all your ducks are in a row, what is the amount of money youll need to start your business? The answer is, of course, it depends. The size, scale and scope of your company will make a huge difference in what the total cost of starting your company will be. However, here are a few of the definable costs that you should factor in:
- Registration and formation documents: $500+
- IRP plates: $298
- CDL endorsements: $142.25
Some of these costs are mere estimates that can vary wildly depending on your state, the enactment of recent legislation and your goals as a company. For startup fees alone, you should likely budget $10,000 to $20,000 and then add on the price of your truck, driver salaries, maintenance costs, ongoing insurance and office expenses.
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Best Long Haul Trucking Companies
Hirshbach Motor Lines Based out of Dubuque, Iowa, with yards in Sioux City, IA, Denton, TX Springfield, MA, Atlanta, GA and Crete, NE, this company has been around for over 80+ years.
They are privately owned, and are known for a low driver turnover rate. Definitely an over the road fleet, hauling mostly temperature controlled product as well as some dry freight.
They hire company drivers and owner operators.
They employ drivers from Illinois, South Dakota, Wisconsin, Iowa, Minnesota, Nebraska, Texas and the New England states.
Do Truck Loads Pay A Decent Amount Of Money
Freight rates related to truck-loads change almost every single day. This means we should conduct a trucking company industry average. The average comes out to around $1.25 to $2.75 for every mile a truck drives. Different factors will raise or lower the payment total. Weight, number of drops, and the type of trailer and equipment matter. Every trucking business must calculate fees, routes, schedules, and rates. Do not panic if you’re not exceeding your companys goals. Try to keep working hard. Youll start to experience high-quality business results in the future.
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Forms Licensing And Insurance For Trucking Companies
We wont sugarcoat it, there are A LOT of forms and licensing that new trucking companies must apply forhere is a list of the major ones:
- FMCSA Number & Registration- before you can get started with your company, you must first be sure that you are registered with the Federal Motor Carrier Safety Administration and the Department of Transportation.
- IRS Form 2290 otherwise called the Heavy Use Tax Form, this is the sheet that all trucking company owners must fill out in compliance with IRS policies.
- IRP Tag and IFTA Decal each state has a different policy for obtaining International Registration Plan Tags and International Fuel Tax Agreement Decals. Find out what your state requires.
- CDL License naturally, you and the rest of your drivers will all need to obtain a Commercial Drivers License from whichever state you are based.
- LLC Status you will have to register your trucking company as a Limited Liability Company.
- BOC-3 Form if you plan on doing a lot of interstate business, youll need a BOC-3 form. This form essentially establishes that you have a legal conduit within each state that you operate.
As far as insurance is concerned, policies vary depending on your company and location. For specifics on different policy plans and instructions on how to apply, check out what the FMCSA has to say on the matter and decide which insurance plan you are best suited for.
To buy or to lease? New or used? Now those are the questions
Best Carriers For New Cdl Drivers
Estes A good starting company for new truckers. They have a large freight base.
TMC A good starter company for the new driver. The pay is decent and yep they have Peterbilts, if that appeals to you.
Schneider A financially sound company , no team driver training, 3 week very structured training, less time with a mentor on the road than most.
They run well equipped Freightliners with APU + fridge. Good benefit package.
Shaffer Trucking They have a 6-8 week training on a route with a mentor. 1 week is 8 hours of a team driving situation.
FedEx Ground This is not well known, but certainly worth checking out. FedEx Ground Contractors will take new CDL drivers and train them. Most of the jobs are team, but there are also many single runs as well as day runs. Weve discovered the pay range for these drivers $85,000 to $98,000 per year. This is out of Columbus, OHIO.
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Locate Your First Client
To get your trucking business on the road with that first customer, youll most likely need to start small. Start by reaching out to local businesses that need transportation services. Attend networking meetings and join social networking groups your target customers belong to. Reach out to prospective customers by attending trade shows for their industries. Once you get your first account, youll need to deliver standout service. Be specific as to what you can and cannot do. It doesnt do anyone any good to overpromise and under deliver, Burnham notes. By law, truckers can only drive 10 hours a day, so be careful when promising delivery dates and times. The key is to be reliable and gradually build up a base of clients that can refer you to new prospects and vouch for your abilities. You may have to bid low for contracts at first to get your foot in the door. However, know your margins and be ready to charge more once youve proven your worth.
Get A Truck And/or Trailer
Commercial truck financing terms vary depending on your credit. When you order your trucks, there are different types of leasing options available.
Types of leases:
Operators: This is having the vehicle full-time and always in your possession. You pay for permits, taxes, and maintenance and turn in the vehicle when the lease ends.
Lease-purchase: This is for drivers with less-than-perfect credit. They can finance trucks right away but may pay more in interest.
Terminal Rental Adjustment Clause: For this, you pay a down payment up front. At the lease end, you can pay the balance for the vehicle. Or, let the leasing company sell the vehicle, and they may share part of the profit with you.
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Annual Pay For Trucking Jobs In New York State
According to the Bureau of Labor Statistics, truck drivers in New York reported a median pay in 2020 of $51,500, a wage that is higher than the median wage for truck drivers across the United States.
However, the annual reported median pay for New York truck driving job earners in the top 10% of the industry ranked third among the high tier of pay reported nationwide. Logically, the statistics further show that CDL drivers who haul freight through major metropolitan areas, such as New York City, that experience extreme traffic congestion are typically more highly compensated for those types of driving jobs.
Create A System For Managing Finances
Your business will need a decent amount of money as you start having expenses . Trucks might cost an average of $80,000, and youll have other expenses, like insurance, legal fees, and maintenance.
Check with large and small banks and credit unions for financing. Credit unions may be easier to get a loan from, as larger banks want to see two years of operating history. You can also check online for trucking lenders.
And if you need to approach lenders, investors, or partners to finance your trucking business, the first thing many of them will want to see is your business plan. Heres a look at how to create a trucking business plan.
Once you get financing, hire the best tax attorney and bookkeeper you can afford to manage your accounting. Use Intuit QuickBooks or other accounting software.
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What Licenses Are Needed To Start A Trucking Business
The trucking industry has a lot of regulations you must meet before you can ever put a truck out on the road. Although meeting all the licensing and regulatory requirements can be tedious, its incredibly important to make sure you’re in compliance before you open your doors, or you risk losing your business altogether. Here are the licenses you need to get before you start your trucking company.
While complying with all regulations and getting all of your licensing set is a job all on its own, its the first step towards running a successful and profitable trucking company.
How Much Money Does It Take To Start A Trucking Business
When considering how to run a trucking business, one of your primary concerns is probably how much money it will cost you to start your business. When it comes to the cost of starting a trucking company, there is no one answer as to how much it will cost. Your cost will depend on several factors, including what state youre in, how many trucks you plan to have, whether you currently have your own truck and insurance, whether youll haul interstate or intrastate, and more. On average, owners usually pay around $10,000 to $20,000 to get their business up and running.
Here’s a breakdown of necessary costs to get you started:
- Insurance Down Payment: $2,000-$4,800 per truck
- Truck: $15,000-$175,000
- State Specific Tax: Around $500 per truck
- IRP: $500-$3,000
- IFTA Report: $150 per quarter
- UCR : $69 and up
- BOC-3 Processing Agent: $10-$50
- Trucking Insurance: $9,000-$12,000 per truck, per year
Taking the time to plan out your business expenses will help you make sure you are prepared to cover the costs of running your own trucking company.
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