How do I start a trucking company?
The first step in starting your trucking company is deciding what kind of company you are going to create and filing with your state secretary of state office. An LLC is the most popular form of small business, but Sole Proprietorship and C-Corporation are used as well. Once you file for your company with your state secretary of state office, you will also need to register for an Employer Identification Number (EIN) with the IRS. We highly recommend that you do not use your personal SSN for running your business, even if you are registered as a sole proprietorship.
Once your business and EIN have been created, it is time to decide what kind of trucking company you will be running. The categories include;
- Interstate (multiple states) or
- Intrastate (one state)
- Non-CDL (10,000 - 26,000 lbs GVW) or
- CDL (26,0001 lbs GVW and up).
The type of trucking company you are going to start will determine what kind of government filings you will be required to complete to be legal. You will also need to determine what and where you are planning to haul, as those decisions may also change your requirements.
After you have determined how and where your trucking company is going to operate, it is time to get your authority requirements filed and taken care of. If you are confused as to what your requirements are, or are unsure how to file the required paperwork, our expert authority and compliance staff can take care of the process for you. After your authority filings are complete, you have to complete a 21-day protest period before the FMCSA will activate your authority. During that 21-day window, you should be looking to complete the final requirements to get on the road.
As soon as you have filed for your authority, you will need to begin the process of shopping for your required commercial insurance. Your insurance requirements will vary based on what you are hauling, your GVW, and other details. As such, it is important that you shop for insurance with a company that is familiar with the insurance requirements of the FMCSA to ensure that you are getting the insurance that will be required of you. It is also important to note that not all insurance companies will underwrite brand-new authorities, so finding a company that will is especially important. Our insurance partner, Mustard Seed Truck Insurance, does both.
If you are going to be driving across state lines, or more than a 150 mile radius from your home base, in most cases you will also be required to install an Electronic Logging Device (ELD) in your truck. At its most simple, an ELD will log your hours of service for DOT audits. For those trucks at CDL weights, your ELD will also track your miles driven per state, and in rare instances, also your gallons of fuel purchased per state. This data is critical to both DOT audits, as well as your IFTA and IRP filings.
One of the biggest expenses you will have when operating your trucking company is fuel. Hauling a full load at 80,000 lbs. can cost an immense amount of fuel, meaning that any savings you can find for fuel will quickly add up. The most common way carriers save on fuel is to apply for a fuel card that offers them fuel discounts at the pump. These fuel discounts can save a carrier thousands of dollars a year, which directly translates into better profits. Our WEX/EFS fuel card comes with pre-negotiated fuel discounts at thousands of locations nationwide.
Once you have everything you will need to start running, you will have to concern yourself with how you are going to maintain cash flow out on the road. Brokers taking 30-60 days to pay on a delivered load is extremely common, which can severely restrict your cash flow and make it difficult to run without a large savings to live off of. Most truckers either only work with brokers who offer a quick pay option, or they find some other sort of same day payment service to help them maintain the cash flow they need to operate. Our same day payments service helps our clients convert their invoices instantly into cash, allowing them to grow and invest in their business much faster than waiting for their slow paying customers to mail a check.
Even once you are fully legal and running, you will be required to maintain your authority with monthly, quarterly, or annual filings. The filings you will be required to maintain depend on the type of authority you have. Our Annual Services program is built to help you stay legal and in compliance so you can operate knowing everything required to keep you legal is being taken care of.