How To Start Trucking Company? Essential Steps & Cost Analysis

Olivia Carter

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how to start trucking company

Opening a trucking company in the US is one of the most profitable businesses. However, starting a trucking company is not easy by any yardstick.

To start a trucking company, you will require a capital of tens of thousands or even millions of Dollars. Raising such capital isn’t easy, as you would already know.

In fact, trucking is a large industry and includes some of the biggest players in the world. To understand the significance of the US trucking industry, here’re some facts and figures that you should know.

Facts & Figures of the US Trucking Industry

Trucking is perhaps the most important part of America’s logistics industry. According to the Department of Transportation- Bureau of Transportation Statistics, trucking alone constitutes some $368.9 billion of the US national Gross Domestic Product.

“Trucking contributed the largest amount of all the freight modes, at $368.9 billion. For-hire transportation services contributed $169.8 billion, while in-house trucking operations contributed $199.1 billion. In comparison, total household transportation’s contribution to GDP was $359.5 billion, larger than any of the other transportation modes,” the BTS website says in a public statement issued in 2024.

Growing Demand for Trucking

However, that’s not all. The trucking industry plays a vital role in the US economy by transporting goods and products across the country.

It includes both in-house trucking services, where companies operate their own truck fleets, and hired trucking services, where companies contract with independent trucking companies or owner-operators. The overall economic impact of the trucking industry is significant, as it supports various sectors and contributes to the Gross Domestic Product (GDP).

According to the American Trucking Association (ATA), the trucking industry is responsible for transporting the majority of freight in the United States. In 2020 beginning, it was estimated that trucks moved approximately 11.84 billion tons of freight, which accounted for about 72.5 per cent of total domestic freight tonnage.

The ATA also reported that the trucking industry generated $791.7 billion in revenue in December 2019.

It's important to note that the GDP of the trucking industry includes not only the direct revenue generated by trucking companies but also the indirect economic impact.

This includes the ripple effects on related industries, such as fuel suppliers, truck manufacturers, maintenance and repair services, and the retail sector that relies on trucking for the delivery of goods.

How to Start a Trucking Company

Defining a Trucking Company in the USA

The term ‘trucking company’ has different meanings around the world. In some countries, a trucking company is only a business that leases its trucks to individuals. In other places, a trucking company is a state-owned player that provides logistics.

A trucking company in the USA is a business that specializes in transporting goods and cargo over the road using trucks. These companies are also known as freight carriers, truckload carriers, or motor carriers. They play a crucial role in the country's economy by providing transportation services for various industries, including manufacturing, retail, and logistics.

Trucking companies in the USA operate a fleet of trucks, ranging from small vans to large tractor-trailers. They typically offer services such as:

1. Full Truckload (FTL): Transporting a single shipment that occupies the entire capacity of a truck.

2. Less than Truckload (LTL): Combining multiple smaller shipments from different customers into a single truckload.

3. Intermodal: Utilizing multiple modes of transportation, such as trucks, trains, and ships, to move goods efficiently over long distances.

4. Specialized Freight: Transporting oversized or hazardous goods that require specialized handling and equipment.

5. Expedited Services: Providing fast delivery options for time-sensitive shipments.

6. Dedicated Contract Carriage: Offering dedicated transportation services for specific customers or routes.

Biggest Trucking Companies of USA

Trucking companies are responsible for managing various aspects of the transportation process, including logistics planning, route optimization, freight tracking, and delivery coordination. They employ truck drivers, dispatchers, mechanics, and support staff to ensure the smooth operation of their services.

Some well-known trucking companies in the USA include UPS Freight, FedEx Freight, J.B. Hunt Transport Services, Schneider National, and Swift Transportation. However, the industry consists of numerous small to mid-sized companies as well, contributing to the overall transportation infrastructure of the country.

Importance of Truck Fleet

A trucking company in the USA doesn’t usually depend on one or two kinds of trucks. Instead, they have a fleet that consists of different types of trucks for a variety of applications.

Trucking companies in the USA use a variety of trucks depending on the type of cargo they transport and the specific needs of their operations. Here are some common types of trucks used by trucking companies:

1. Semi-trailer Trucks (Tractor-Trailers): Also known as “18-wheelers” or “big rigs,” these trucks consist of a tractor unit (the cab) and a detachable trailer. They are widely used for long-haul transportation of goods and can carry a significant amount of cargo.

2. Straight Trucks: These trucks have a single rigid frame, combining the cab and cargo area into one unit. They are commonly used for regional or local deliveries, especially in urban areas where manoeuvrability is essential. Straight trucks come in various sizes, such as box trucks, delivery vans, and refrigerated trucks.

3. Flatbed Trucks: Flatbed trucks have an open cargo bed without sides or a roof. They are used for transporting oversized or irregularly shaped cargo that cannot fit inside enclosed trailers. Flatbed trucks are commonly used in construction, agriculture, and hauling large equipment.

4. Tanker Trucks: Tanker trucks are designed for transporting liquids or gases, such as fuel, chemicals, or food-grade products. They have specialized tanks with various compartments to ensure the safe transportation of specific types of cargo.

5. Refrigerated Trucks (Reefers): Reefers are equipped with refrigeration units and insulated cargo areas to transport temperature-sensitive goods, including perishable food items, pharmaceuticals, and other products that require controlled temperature conditions.

6. Dump Trucks: Dump trucks have an open-box bed that can be hydraulically tilted to unload bulk materials, such as gravel, sand, or construction debris. They are commonly used in construction, mining, and waste management industries.

7. Specialized Trucks: Depending on the nature of their operations, trucking companies may also use specialized trucks such as car carriers, livestock trailers, logging trucks, cement mixers, and more.

It's important to note that trucking companies may have a mix of these truck types in their fleet to accommodate different customer needs and cargo requirements.

Laws to Start a Trucking Company

Starting a trucking company in the USA involves complying with various laws, rules, and regulations at the federal, state, and local levels. Here are some key considerations:

1. Business Formation: Determine the legal structure of your trucking company, such as a sole proprietorship, partnership, limited liability company (LLC), or corporation. Follow the necessary procedures to register your business with the appropriate state and local authorities.

2. US Department of Transport Number: Apply for a USDOT number from the Federal Motor Carrier Safety Administration (FMCSA). This unique identifier is required for companies involved in interstate commerce and certain intrastate operations.

3. Motor Carrier Authority: Obtain operating authority from the FMCSA, depending on the type of operations you plan to undertake. This may include obtaining an Interstate Operating Authority (MC Number) or a Freight Forwarder Authority.

4. Insurance Requirements: Trucking companies must meet certain insurance requirements, such as obtaining liability insurance to cover bodily injury and property damage. The specific coverage amounts depend on the type of cargo and operations. The FMCSA sets the minimum insurance requirements.

5. Compliance with Safety Regulations: Ensure compliance with safety regulations outlined by the FMCSA, including driver qualification standards, hours of service regulations, drug and alcohol testing programs, vehicle maintenance requirements, and more. Implement safety management systems and maintain proper records.

6. International Registration Plan (IRP): If your operations involve travelling across multiple states, you may need to participate in the IRP, which allows for the proportional registration of commercial vehicles among member jurisdictions.

7. International Fuel Tax Agreement (IFTA): If your operations involve travelling across multiple states or provinces, you may need to participate in the IFTA. This agreement simplifies the reporting and payment of fuel taxes.

8. State and Local Permits: Obtain any necessary state and local permits, such as oversize and overweight permits, if your operations involve transporting loads that exceed legal limits.

9. Taxes and Financial Reporting: Comply with tax obligations at the federal, state, and local levels. This includes income taxes, employment taxes, and any specific taxes related to the trucking industry. Maintained proper financial records and submitted required reports.

It's important to note that the trucking industry is highly regulated, and the specific requirements may vary depending on the type of operations, fleet size, and jurisdiction. It is advisable to consult with legal and accounting professionals or industry associations for detailed guidance specific to your situation. Additionally, regularly review the FMCSA's regulations and guidelines for any updates or changes that may affect your trucking company.

Role of the NTSB with Trucking Companies

The National Transportation Safety Board (NTSB) does not directly govern trucking companies in the USA. However, the NTSB plays a significant role in promoting transportation safety and investigating accidents across various modes of transportation, including trucking.

The NTSB is an independent federal agency that conducts investigations into transportation accidents, determines their probable cause, and makes recommendations to improve safety. While the NTSB's primary jurisdiction is focused on aviation, rail, marine, and pipeline accidents, it does have some influence on trucking safety.

When a trucking accident occurs, especially if it involves multiple fatalities, significant injuries, or other exceptional circumstances, the NTSB may launch an investigation to determine the cause and contributing factors.

The NTSB's investigations often result in recommendations for regulatory agencies, industry stakeholders, and the public to enhance safety measures and prevent similar accidents in the future.

The NTSB's reports and recommendations can indirectly impact trucking companies by influencing industry practices, federal regulations, and state laws related to trucking safety.

While the FMCSA (Federal Motor Carrier Safety Administration) is the primary regulatory authority for trucking companies, it may take NTSB recommendations into account when formulating or revising regulations pertaining to trucking operations and safety.

Overall, while the NTSB does not directly govern trucking companies, its investigations and safety recommendations can significantly influence the industry's practices and contribute to improving trucking safety standards in the USA.

Size of the US Trucking Industry

The American Trucking Association (ATA), a national trade association representing the trucking industry, has reported that there are over 3.5 million professional truck drivers in the United States. These drivers operate a significant number of trucks and commercial vehicles.

According to the U.S. Department of Transportation's Federal Highway Administration (FHWA), as of 2022, there were approximately 15.5 million trucks registered for business purposes in the United States. This number includes various types of trucks, such as tractor-trailers, delivery vans, straight trucks, and specialized trucks used in different industries.

It's important to note that the number of trucks and commercial vehicles operating in the USA can fluctuate over time due to changes in the economy, industry demand, and other factors.

Cost of Starting a Trucking Company

The cost of setting up a trucking company in the USA can vary widely depending on various factors such as the size of the fleet, the scope of operations, the geographic area served, and the specific requirements of the business. Here are some common expenses to consider when estimating the cost of starting a trucking company:

1. Equipment: The cost of purchasing or leasing trucks and trailers is a significant expense. The price can range from tens of thousands of dollars for used vehicles to several hundred thousand dollars for new trucks, depending on the type and specifications.

2. Licenses and Permits: There are fees associated with obtaining licenses, permits, and operating authority, such as the USDOT number, MC number, and state-specific permits. The costs can vary depending on the type of authority required and the jurisdictions where you plan to operate.

3. Insurance: Trucking companies need to carry various types of insurance coverage, including liability insurance, cargo insurance, and potentially other specialized coverage based on the specific operations. The cost of insurance premiums will depend on factors such as the size of the fleet, the type of cargo transported, and the safety record of the company.

4. Maintenance and Repairs: Truck maintenance and repairs are ongoing expenses for a trucking company. It's essential to budget for routine maintenance, inspections, repairs, and unexpected breakdowns. These costs can vary based on the age and condition of the vehicles.

5. Fuel: Fuel expenses can be a significant portion of the operating costs for a trucking company. The total fuel cost will depend on the number of miles driven, fuel efficiency, current fuel prices, and the routes covered.

6. Personnel: Hiring and retaining qualified drivers, dispatchers, and support staff is another significant expense. This includes costs such as salaries, benefits, training, and potential bonuses or incentives.

7. Office Space and Utilities: Depending on the scale of operations, you may need to rent or purchase office space, as well as cover utilities like electricity, internet, and phone services.

8. Compliance and Safety: Maintaining compliance with various regulations, including driver qualification files, drug and alcohol testing programs, and safety management systems, may involve costs associated with recordkeeping, training, and administrative tasks.

It's important to note that the costs mentioned above are estimates and can vary widely based on individual circumstances and market conditions. Conducting a thorough business plan and consulting with industry professionals or financial advisors can provide a more accurate estimate of the specific costs involved in starting a trucking company in the USA.

Also Read:

How To Start A Logistics Company? A Comprehensive Guide

93 Best Home Based Business Ideas You Can Start In 2023

Income from Your Trucking Company

The revenue and profitability of a trucking company can vary significantly based on various factors such as the size of the company, the number of trucks, the type of freight being transported, the geographical area of operation, operating costs, and market conditions.

On average, a small trucking company with a few trucks may generate monthly revenues ranging from $30,000 to $100,000. However, keep in mind that this revenue figure represents the total amount earned by the company, not the profit.

From this revenue, the trucking company needs to cover various expenses such as fuel costs, maintenance and repairs, insurance, salaries, permits, licenses, and other operational expenses.

Profit margins in the trucking industry are generally low, typically ranging from two per cent to 10 per cent. This means that for every dollar in revenue, the company may keep between $0.02 and $0.10 as profit. However, larger trucking companies with more efficient operations and economies of scale may have higher profit margins.

Wages of Truck Drivers in the USA

The income of truck drivers in the United States can vary depending on several factors, including experience, the type of trucking job, the company they work for, and the region where they operate. Here are some general figures for truck driver earnings:

Entry-level or local truck drivers: Entry-level truck drivers or those working in local or regional routes typically earn an average of $35,000 to $50,000 per year before taxes. This translates to approximately $2,900 to $4,200 per month.

Long-haul truck drivers: Long-haul or over-the-road truck drivers who cover greater distances and spend more time away from home generally have the potential to earn more. On average, long-haul truck drivers can earn around $45,000 to $75,000 per year before taxes, which is roughly $3,750 to $6,250 per month.

It's important to note that these figures are approximate averages, and individual earnings can vary significantly. Some experienced, and highly skilled truck drivers can earn higher salaries, while others may earn less depending on their specific circumstances.

Additionally, these figures represent gross income before taxes and do not account for deductions such as fuel costs, meals, insurance, and other expenses that truck drivers typically bear.

Investments to Start Truck Company

The above information clearly shows that it’s not easy to start a trucking company. One of the greatest threats to opening a trucking company, you will require a lot of money.

However, there’re a few known ways to attract such stiff. Here are some such ways to get the necessary capital.

Wrap Up

If you’re willing to do all the above processes and start a trucking company, you will surely be a successful entrepreneur. Trucking companies aren’t just a profitable venture: they also keep America and its products moving from producer to the markets

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