Given the increased freight demand and rising rates, this could be an ideal time to start a trucking company. This situation would favor smaller businesses that can get up and running quickly and with a low initial investment.
- Is the Trucking Business Profitable?
- Can You Be a Trucking Operator Without a CDL?
- Where Do You Begin, Though?
- Create a Business Plan
- Understand License And Permit Requirements
- Get a Commercial Driver’s License (CDL)
- Apply for Federal DOT and Motor Authority Numbers
- Complete Your Unified Carrier Registration (UCR)
- Get an International Registration Plan (IRP) Tag
- Understand Heavy Use Tax Regulations
- Obtain an IFTA Decal
- File a BOC-3 Form
- Business Insurance
- Purchasing Your First Truck
- Tracking Fleet and Finances
- Driven by Technology
- Matrack Solutions For New Trucking Business
Is the Trucking Business Profitable?
The trucking business directly impacts the country’s economic growth. According to American Trucking Associations, in 2021, approximately 3.5 million truck drivers moved nearly 72% of freight tonnage in the United States. Hence there will always be a demand for trucks and trucking companies. Truckers play an integral role in regulating supply chain functions and driving the economy.
Less is more. You can begin with just one unit, lowering your initial investment. Over the years, you can grow from one trucking service to an expanded one that cares for clients. The trucking industry can be lucrative if you know what you’re doing.
With the right tools, a trucking business is a huge chance to develop and thrive. Many current and former truck drivers decide to take their careers further and open a trucking business. Let us dig a little deeper into how to run a trucking company without driving.
Can You Be a Trucking Operator Without a CDL?
Yes, you can. When you are an owner-operator and hire truck drivers, they need a valid commercial driver’s license (CDL), as required by the Federal Motor Carrier Safety Administration (FMCSA). As an owner running the business, you only need a CDL if you intend to drive.
Other owner-operators are self-employed truck drivers. Such owner-operators have to be dependable drivers as well as skilled business owners. Choosing not to drive allows you to concentrate on owning the business and handling the obligations that come with it.
Where Do You Begin, Though?
Consider yourself an entrepreneur, and follow the same steps every other small company owner does when beginning theirs.
Create a Business Plan
Discover the fundamentals of running a profitable trucking company.
Owning and operating a trucking company has several advantages. You can select which companies to work with, what loads to transport, and how frequently you’ll run. You may be paid more because you own the company and receive a larger share of the profits. Starting a trucking company can be difficult despite the numerous benefits of this type of business. It comes with its own set of challenges and issues. As a result, despite the potential rewards, only a few people consider starting a trucking company.
To be successful, you must set realistic goals and work on timelines. Set goals, and have the right attitude, flexibility, and passion for what you do.
Understand License And Permit Requirements
Trucking is a highly regulated industry with numerous rules and regulations. Below let us navigate through all the necessary steps to help you acquire the authority to operate legally as an interstate trucking company.
Get a Commercial Driver’s License (CDL)
Ensure that all drivers for your trucking company have a valid commercial driver’s license. Each state has its testing requirements. Find out what your state requires by visiting your local Department of Motor Vehicles.
You need to remember all the pre-trip inspection items before appearing for a CDL examination. Here is the pre-tip inspection checklist for a class A CDL will give you an overview of how to perform an inspection.
Apply for Federal DOT and Motor Authority Numbers
These Numbers are required for your trucking company to transport cargo throughout the United States. The Federal DOT number keeps track of your trucking company’s safety records and compliance rules.
The Motor Carrier (MC) number, also known as the “operating authority,” aids in determining the type of trucking business you run and the goods you’re permitted to transport.
You will receive your MC and USDOT numbers once your application is submitted and your request for authority is reviewed by the Federal Motor Carrier Safety Administration (FMCSA).
Complete Your Unified Carrier Registration (UCR)
In every state where a motor carrier operates, the UCR system is utilized to verify active insurance coverage.
Get an International Registration Plan (IRP) Tag
An IRP license plate allows your truck to operate in all states and most Canadian provinces. Your company’s home state issues it.
Understand Heavy Use Tax Regulations
Your truck will be subject to the federal heavy highway use tax if it weighs 55,000 pounds or more. Every year, this is reviewed through IRS.
Obtain an IFTA Decal
The International Fuel Tax Agreement (IFTA) enables the reporting of fuel consumed by trucks that operate across the USA and some provinces in Canada.
File a BOC-3 Form
For your trucking company to acquire authority to operate on the interstate, registration of a current BOC-3 form with the Federal Motor Carrier Safety Administration (FMCSA) is needed.
It is a good idea to engage with a lawyer that has worked with other trucking companies to ensure legal compliance. Some types of insurance you’ll need to include Public Liability insurance, Bobtail insurance, Cargo insurance, and physical damage.
Purchasing Your First Truck
When starting a trucking company, your first commercial trust will be one of your most significant investments.
Should you buy or lease? Your payout is completed when you purchase a truck. When you rent a truck, you do not own it. You must make regular payments and follow specific regulations.
Tracking Fleet and Finances
You will have more to manage in your role as an operator, from regulatory compliance, customer service, chasing payments, and staffing to finding new clients.
To keep your business running, you must ensure that your customers are satisfied and will want you to handle their deliveries in the future. Take the time to connect with clients in any way you can.
The final aspect of running a business is keeping track of cash flow. Consider considering hiring someone with the bookkeeping and timely payment to your employees.
Driven by Technology
In the trucking business, you’ll typically encounter the following paperwork: driver logs, Invoices, Interstate Fuel Tax Agreement (IFTA) reports, payments, truck maintenance records, and Mileage reports.
The advances in technology make it possible to automate and streamline these management processes to smooth over the worst complexities. To prevent tax penalties, these must be filled in correctly and free of errors. Manually tracking your trucks, planning routes, answering customer calls, etc., would involve a lot of time and potentially costly human mistakes, which can be avoided with an efficient management system.
In light of the recent FMCSA changes brought by the Electronic Logging Devices mandate, trucking companies must shift to the computerized record of driving hours and other relevant information.
As a business owner, to optimize profitability must also execute business-related tasks, such as building a stable pipeline of work. Among the other responsibilities are accounting duties, including providing tax data and figuring out business costs to calculate the net income.
If you are seeking the best ELD devices for small fleets to improve your team’s performance, then here are the ELD devices for small fleets.
Matrack Solutions For New Trucking Business
Many businesses have been able to streamline their business operations, create fuel-efficient routes, and reduce their expenses on fines and taxes since switching from paper logs to Matrack ELD and fleet management system.
Here’s how Matrack ELD and software helped them:
FMCSA & DoT Compliant
All Matrack ELD hardware is FMCSA approved and strictly complies with Department of Transport regulations regarding Hours of Service. Matrack devices collect accurate data preventing any violation of HoS.
GPS Tracking and Mapping
A reliable GPS tracking and mapping function help track each employee’s location and status. It gives access to real-time data, such as the current traffic conditions. This data makes it easier for your employees to identify the best routes to ensure timely deliveries.
Fuel and vehicle maintenance management
As your fleet grows, fleet management makes it possible to have absolute control over every transportation. It allows tracking of your driver’s location and status in the field using GPS (Global Positioning System).t will improve your team’s routes and achieve consistency in the maintenance of vehicles, routing or mapping, fuel costs, and warehousing, among other essential features.
ELD devices automatically record all data, and the device itself is tamper-proof; the authenticity of such information is intact and error-free, allowing easy DoT log transfer on inspections. Not only are paper logs complicated to maintain, but they are also difficult to store. With the Matrack ELD app, drivers can complete all forms within the Matrack ELD App, save time and reduce producing Automated and accurate HoS logs.
IFTA Taxes and Reports
The Matrack ELD solution is a two-step procedure. The hardware device records the data, which is then collected and analyzed by Matrack’s intelligent fleet management software. The system generates essential reports based on the client’s requirements, such as IFTA tax calculations.
Installation and Usage
Access data via desktop, mobile phone, or tablet. The provider offers a seamless, intuitive, user-friendly app and a dependable ELD device.
Real-Time Safety Management and Risk Alerts
Access and monitor driver behavior day and night. Analyze extreme braking activity and speeding at or above 80mph. They also allow historical records, accessible storage, accident reporting, and data retrieval.
Onboarding ELD, fleet, and asset management software such as Matrack in your operations will give you time to focus on other strategic aspects of the trucking business, including more efficient ways of providing your services. It aids in data management and recording, avoiding violations, maintaining an accurate record of driver logs, and managing fuel and maintenance schedules and expenses. Matrack’s free ELD, most affordable subscription rate, and features and customer service make it the best ELD for you, whether you are an owner-operator or have a large fleet.
As a start-up, it’s essential to know that because there is a cheaper solution, you may still need something else. It might need to be more capable of meeting the needs of your trucking company, or it could be unadaptable as the business grows. At the same time, just because a software system is expensive doesn’t guarantee that it’s efficient for your business.
It would help if you struck a balance between the efficiency of the software and what you can reasonably afford in the beginning. Depending on the size of your company, you may or may not need to get customizable software. You’ll need to determine if the extra cost of that feature will be worth it, given where your business is currently and where it’s projected to go.
Trucking operators of all sizes use GPS Fleet and Asset Tracking solutions such as those offered by Matrack Inc., making it most preferred by those entering the trucking business.
As these digitally enabled, cloud-based solutions come online, they will rearrange how the trucking business operates, rendering obsolete old business models and allowing new ones. And in the long run, they will pave the way for the new world of fully digitalized and autonomous trucking.