5 Smart Practices for Starting a Trucking Company

Trucking continues to be a booming business. There simply are not enough service providers to meet the demand, and that demand is expected to continue growing. That makes this a great time to start a trucking company. Of course, none of this makes establishing a trucking company any easier, and there are some smart practices that you can apply to help ensure you success.

1. Consider a Startup Program

While self-driving trucks may be on the horizon, it will be decades or longer before the need for human truckers is eliminated entirely. Establishing a trucking company can be complex. It can be even harder when you consider that most new truck companies are just a single person with an owned or leased truck.

You can do it all on your own, but a preferable option for many is to participate in a trucking company startup program. These are a paid service that help entrepreneurs through the process. In many cases, they will prepare and file all of the documentation your behalf. There are specialists available to give you professional advice as well as direct you to a broad range of other resources. While such services do cost money, the sheer time-savings often makes it well worth it.

2. Establish Your Trucking Authority

Whether you are starting out with one truck or dozens, you need to be properly licensed. To begin with, you need a USDOT number from the U.S. Department of Transportation. Next, you’ll need a Motor Carrier operating authority number. An MC number will be awarded to you from the Federal Motor Carrier Safety Administration. The FMCSA is an agency of USDOT, and it often is possible to file for and receive these two numbers at the same time.

You’re also going to need insurance. If your company performs interstate trucking, then you meeting federal standards is often good enough, but you should meet with a trucking insurance specialist to discuss your usual cargo and territories in order to determine appropriate coverage. It also doesn’t hurt to establish your authority and expand your network by joining and being certified by relevant trade associations, such as the American Trucking Associations.

3. Be Particular About Trucking Assignments

As a new trucking company, there can be this sense that you shouldn’t turn down work. What if there’s no new work tomorrow? It’s an understandable fear, but nothing will sink a new trucking company faster than a broker or shipper that can’t pay. There may be times where it makes sense to accept a less-than-appealing job as an inroad. Generally, however, you want to be selective. An important part of this selectiveness is running credit checks. A credit service subscription will let you run these checks quickly and easily, and it will give you peace of mind that your customers can and will pay you for your work.

4. Track Your Expenses

Tracking a business’s expenses may seem like an obvious thing, but many driver-owners don’t do this as comprehensively as they should. Invest in bookkeeping software and create profit and loss statements so that you know exactly what your fixed costs are, where your best profits are coming from, where you are losing money and so on. Track fuel costs, maintenance expenses, repair bills, office expenses and so forth. This gives you the data to know exactly what your minimum cost per mile is so that you know exactly what to charge. It will also make growth a lot easier as you begin to hire employees and lease/purchase additional trucks and other equipment.

5. Minimize Your Fuel Costs

Fuel costs can easily account for up to 40 percent of your fixed costs. Minimizing those costs lets you increase your profits as well as have breathing room to pass savings on to clients. Among the best ways to do this is a fuel card. Fuel cards allow you to get cash prices at many truck stops and gas stations. Other benefits can include fuel management tools, reporting tools and even fuel theft protection. Some even have reward programs that let you earn cash back on each purchase that you can use for fuel, food and other necessities.