How to Start a Trucking Company in 2023 | Connecteam (2024)

Logistics in general, and trucking business in particular, are often the engine, running the economy. It is true for many countries, and definitely for the US.

Trucking companies are constantly moving materials from suppliers to manufacturers and then delivering finished products from manufacturers to consumers. In fact, more than 70% of goods carried from one location to another in the United States are transported by trucks.

Without these constant flows, the whole economy will literally stop moving. That’s why, while many other businesses had to close down during the COVID-19 lockdowns, the trucking business not only kept running but had even more work than before the pandemic.

“I think the pandemic really accelerated the last-mile deliveries, and so we’re seeing a more rapid increase in that segment than I think you traditionally would have without the pandemic”, says Jason Morgan, the editor of Fleet Equipment

In February of 2021, the freight index set a new record. Van freight continues to surge, and 27% growth is expected over the next decade, according to American Trucking Associations.

Courtesy of Truckstop.com

With all that said, it’s not surprising that the trucking business is very lucrative, but also incredibly competitive. Many truck drivers every year decide to work on their own, start a trucking company and fail. The biggest mistake is forgetting that running a truck company is not the same as driving a truck.

You might be a world-class truck driver, but in order to succeed in running a trucking business, you need to be a good business owner first, and foremost.

Learn More About How Connecteam Helped Australian Transportation Giant ‘Keolis Downer’

The most common challenges of running a trucking company are also typical for last-mile delivery firms, food-trucks and many other field service operations with mobile employees:

• Information lags and distortions between the manager and employees
• Endless piles of reports, usually manual paperwork
• A multitude of safety protocols and legal compliance regulations must be followed
• Scheduling employees takes a lot of time, and scheduling conflicts or overlapping are often
• Internal communication is cluttered
• Onboarding and training is complicated
• Time tracking & accounting are complex and take a lot of counting and double-checking
• Travel costs & “gas money” to track and refund
• Efficiency control is hard or inapplicable for end result-based roles
• Invoice, work-order, and payments management is lengthy and difficult

So if you are looking for tips on how to start a trucking business, these 10 steps will point you in the right direction, and help you transition from a top truck driver to a successful trucking business owner and manager.

10 Tips on How to Start a Trucking Company Successfully:

Find The Right Market or Niche

The most important step to starting and running a successful trucking business is to find the right market or, even better, a particular niche of the market to serve.

First of all, it’s critical because of the high competition. For instance, making decent revenues with a dry van is especially hard on most markets, simply because there is too much competition from large carriers and other owner-operators trying to pull the “easier” loads.

That’s why, as a rule of thumb, when starting a new trucking company, focus on markets that the large carriers avoid. In other words, consider hauling specialized loads. And that brings us to the second point of why looking for the right market is very important right from the get-go.

The market you choose will determine the vehicles and equipment you buy or lease, the rates you charge, and the freight lanes you can service.

Fleets are usually divided by operating categories and load types, such as:

• Package
• General freight
• Household goods
• Tank trucks
• Heavy hauling
• Building Materials
• Motorized vehicles
• Petroleum products
• Bulk
• Refrigerated solids
• Agricultural commodities

On average, machinery, electronic and motorized vehicles make up about 27 percent of goods shipped by truck drivers in America. The most common thing trucks haul is machinery, followed by electronics and motorized vehicles. Additionally, mixed freight includes commodities such as food and restaurant supplies.

In most cases, choosing to focus your trucking business on some more niche loads, for example, hauling fresh produce and meat in reefers, or delivering some special materials can provide you with advantages, namely less competition, year-round work, resistance to recessions, and flexibility the large fleet operators usually don’t have.

However, different markets and locations have all kinds of different landscapes, so always make sure to start with research to find what’s relevant for where you are going to operate.

Start With A Business Plan

The idea of starting a trucking business in 2021 may seem intimidating. It may seem that huge corporate fleets from Amazon, Walmart, and the likes dominate the market and there is no place for new small trucking companies.

The stubborn numbers however say that 91% of trucking companies are rather small, running with six or fewer trucks in their fleet. This means the guys and gals like you that are running small trucking companies actually make the biggest impact on the trucking and logistics industry.

But before you rush to buy a fleet of used trucks and get out on the open road, make sure to do some research and planning, to get a broader view of the industry and develop a basic trucking business plan.

This business plan for starting a trucking company should begin with market research and result in a clear, data-driven strategy, with step-by-step goals that answer all the basic questions, such as:

• What are the type of vehicle(s) and equipment you need to purchase or lease?
• What are the types of loads and freights you will work with and where should you find them?
• Where will your fleet be based and who you should hire to drive for you?
• What tariffs are applicable and how are you going to quote, invoice, and charge your customers and freight brokers?
• Who are your main competitors and what are their strengths and weaknesses?
• Who are your ideal customers and what can you offer them?
• Who are your secondary clients and how can you diversify?

A business plan is your roadmap on how to start and run a successful truck company. Now, it’s likely that once your trucking business grows you may want to update it or change it later down the road, but for now the most important to get your foundations in place.

It helps you stay focused, set clear goals, define your company values, and prepare for potential challenges.

Writing a business plan may seem like a lot of work, especially when there are so many factors to consider, but it’s a very important step to do on the way to starting a trucking company. Plus, you are welcome to use our free business plan template!

Register Your Trucking Company & Get All The Required Permits

Starting a trucking business should start with registering your company and obtaining necessary business licenses and permits.

There are more than 150,000 filing jurisdictions across the USA, all with independent requirements. Depending on your service and your state, a different number of licenses and permits may apply to your business. Based on that, you may require some or all of the following, to run a truck company:

• United States Department of Transportation (USDOT) Number
• Motor Carrier (MC) Number from the Federal Motor Carrier Safety Administration (FMCSA)
• A commercial driver’s license (CDL) and any necessary endorsem*nts: Federal law requires drivers of commercial motor vehicles to obtain a CDL. (Contact your state’s licensing agency for more details)
• Commercial Trucking Insurance
• International Registration Plan (IRP) credentials and International Fuel Tax Agreement (IFTA) decal

Running a trucking business as a properly structured corporation or Limited Liability Company (LLC) allows you to separate between your personal assets and business liabilities, and mitigate some risks of unexpected losses. In addition to that, officiating your business like this, can get you several legal, tax, and business advantages.

If you decide to go this route and form a corporation or LLC, you will need to take the following steps:

• Appoint a registered agent who must be present at a physical address (not a P.O. Box) and be able to sign for and receive legal notices, state mandates, wage garnishments, and tax documents during specific business hours. Registered agents must be consistently accessible. A missed delivery could jeopardize your company’s good standing with the state or enable a lawsuit to proceed against you without your knowledge.
• Obtain your employer identification number to open a bank account. Your employer identification number, or EIN, is like a social security number for your business. This nine-digit number is required to open a business bank account and must be present on all tax filings for the life of your business.

Along with insurance, equipment purchases or leases, and other required filings and registrations, the whole process may take some time, and you should be ready for it.

Buy Or Lease The Right Equipment

The proper equipment and the right vehicle for the job can be the make-it or break-it moment, once you’ve begun running your trucking business.

When selecting equipment for starting a trucking company, consider the following items:

• Can the vehicle accommodate the needs of your cargo? For instance, if you are transporting perishable items, you might consider a refrigerated compartment.
• Is buying or leasing equipment a better option for your new business?
• Can you and should you seek some business funding for it?

You can settle an insurance coverage plan before actually purchasing the trucks and gear, but at the very least, it’s important to know the type of equipment you want in order to calculate all the associated costs beforehand.

Run An Efficient Back Office

Starting a trucking company goes far beyond being ready to haul loads.

Having an efficient back office is essential for building well-organized trucking business operations, running like a well-oiled machine that keeps moving, makes good money, and wins customers in the long run. It gets critical when you start hiring drivers that you need to dispatch in real-time. That’s where running a trucking company’s daily operations can become quite challenging as you grow.

You can outsource your back office to dispatchers and brokers, but it can get pricey, and you should select them very meticulously because a dispatcher can make or break your trucking business.

Alternatively, you can do it yourself at least at the beginning, and run your trucking company, literally out of the cab of your truck.

Just a few years ago, to do that, you needed to have a laptop, a portable internet router or access to the wi-fi internet connection, and a printer. You also needed a complex accounting system installed on your computer to run your business.

Thankfully, those days are long gone, and today you don’t need much more than your smartphone and simple fleet management and GPS-tracking software or a trucking dispatch mobile app.

Luckily, there are solutions like Connecteam that are all-in-one and combine all those features in a single mobile-first employee management app.

Connecteam is a leading small business management app that helps hundreds of small business owners save time and money on daily operations, streamline communication with teammates, suppliers, and partners, all while keeping a finger on the pulse, and overseeing the whole business performance, from an all-in-one business-management app.

Everything you need to effectively run your trucking company operations right from the start and develop your business — under one roof.

• Quick and simple dispatching and scheduling to assign routes and plan deliveries, provide relevant information such as time, address, and special instructions. Send notifications and reminders, get notified when drivers acknowledge or reject a shift, check-in late, or when they complete their tasks.
• GPS-empowered employee time tracking with accurate time tracking allows your employees to clock in and out directly from their smartphone. Whenever employee clocks in and out, at a designated place, a real-time timestamp and GPS location are tagged.
• Easily exports time sheets with the click of the button and send to Connecteam’s integration with QuickBooks Online and Gusto for 100% accurate payroll.
• Real-time reports from the field to streamline reporting from field to office with real-time digital reports to be submitted on the go, such as truck repair requests, vehicle inspections, and more.
• Efficient team communication tool for logistical and operational communication, important updates, announcements, real-time group and private chats with push notifications, and more.
• Simple task management to allocate one-time tasks to your deskless teams and include built-in reminders for your team to execute and automatically receive updates in real-time on task completion. Examples of one-time tasks include license renewal and yearly vehicle inspection.
• through ‘read and sign’ forms and instant access to important safety information and resources, such as safety protocols, ongoing safety training, and real-time safety reporting.
• Effortless remote training for new hires quickly and efficiently onboard your drivers and get them up to speed and create a structured onboarding experience with read and sign forms, quizzes, videos, PDFs, and more.

Actively Look For Loads And Orders

When you are starting a trucking company, you’ll have to find loads and freight to transport. If you’re new to the trucking industry, online load boards can help you find freight so you can start hauling. You can try free load boards, like NextLOAD.com, or pay a monthly subscription for others.

Another option to start a trucking business would be to start networking and building relationships with potential customers through marketing and networking efforts. Contact local shippers directly and meet prospective customers where they do business.

Once you have a solid customer base, you can build on those relationships. In some cases, you can start hauling directly for your customers and establish your own lanes which creates a regular, stable income.

Ensure Compliance with Regulations And Safety Protocols

Running a trucking business means staying on top of time-sensitive filing requirements, ranging from IFTA’s quarterly tax returns to multi-year renewals for CDLs.

Truckers face several compliance regulations by federal, state, and local authorities – from noise emissions, fees for registration and insurance, receipts and bills, and many more. Additionally, there are also environmental issues like anti-idling, greenhouse gas, and other emission reduction regulations imposed at state and local levels. The compliance costs are easily exceeding their benefits, this is a great challenge faced by small truck business owners.

Complying with federal laws so drivers don’t work overtime or experience burnout is a must for HR departments, but that’s easier said than done sometimes.

The U.S. Department of Transportation clearly states that drivers must rest for 30 minutes during an eight-hour shift, and limit driving time to 11 hours per day with a cap of 14 hours – this brings the weekly total to 80. However, it does state that drivers can work over 70 hours if they’ve rested for at least 34 hours in a row.

In August of 2019, the Federal Motor Carrier Safety Administration (FMCSA), under the United States Department of Transportation, announced changes to its hours-of-service rules that will greatly increase the flexibility of truck drivers while they’re on duty. And this has been a long time coming for many truck drivers.

Read up now on the latest trucking laws that went into place in 2019.

To ensure compliance, many logistics companies use a mobile time clock to track breaks and drive time. In fact, logistics companies who rely on Connecteam rely on mobile-first and GPS-empowered accurate time tracking so that their employees can clock in and out directly from their smartphone. Whenever employee clocks in and out, a real-time timestamp and GPS location are tagged.

Track Your Income And Expenses

When you’re asking yourself how to run a successful trucking company, don’t forget that as a business owner, you should always take care of the money first. A key factor in running a trucking business is having a robust and transparent way to track income and expenses.

Regarding transportation companies, this is especially important in terms of logistics, because payments are often received weeks or months after delivery, and it can be difficult to track expenditures while you’re on the road.

To help avoid common startup obstacles, keep the following best practices in mind:

• Subscribe to bookkeeping software or hire an accountant. Online accounting software like Xero can help you track your income and expenses even while you’re away from home. They can also help you find an accountant or bookkeeper to help keep you on track.
• Understand when and how you’ll be paid for deliveries. Shipping contracts often provide for payment 30 to 90 days after delivery. Such delays can be managed, but only if you are aware of them ahead of time.
• Maintain thorough records of business expenses. Keep a file of invoices, receipts, and check stubs so you can prove your expenses if necessary.
• Keep your personal and business finances separate. Maintain separate bank accounts for business and personal use.

Running a successful truck company also implies that you must ensure a regular flow of cash in the initial phase of your business. Your trucking company will take many months before it starts earning regularly. Do not forget that clients generally take two to three months for making the final payment and clearing all dues.

So, despite getting the customers and delivering your services, you may get the payments after many months have passed. This means that you must have enough cash on hand to meet the daily expenses of your company and to pay the salaries of your staff. You will need cash to meet expenses like repairs and fuel. You can get immediate funds to have working capital from a factoring company. Many such companies offer working capital to small businesses.

Hire The Best Drivers & Maintain Them

One of the most important elements of starting a trucking company is thinking about how and where you can hire the best drivers and make sure they stay.

The most successful trucking companies offer some of the same benefits to their drivers, such as:

• Bonuses to accident-free drivers
• Recognition bonuses for signing on and staying
• Health care insurance
• Flexible scheduling
• Gift cards (restaurants, retail, etc.)
• Holiday, birthday or anniversary cards
• Driver appreciation events

The above list is a good example to consider when starting a trucking company, as it can help lower turnover rates. If you’re keen on more ideas for modern employee benefits and perks, take a look at this article.

Follow Trucking Industry Trends & the Predictions of the Future

If you’re still dreaming about running a trucking company and wondering how to start a trucking company, this video is for you.

Enjoy the hot trucking business overview and expectations from an industry expert, and make sure to stay up to date with the latest trucking industry trends.

Bottom Line On How To Start a Trucking Company

The trucking industry is one of the backbones, holding the US and European economies. It is the single largest form of transportation for materials and sources on land, so it’s only natural this industry is never out of demand.

Having a great vehicle fleet and the best team is half the battle, the other is having efficient back-office operations to keep everything under control.

Connecteam is a field service management software used by many small businesses to avoid miscommunications, delays, and errors, streamline daily operations, and simplify communications. It allows small business owners and managers to go paperless, automate daily procedures, create clear processes, instantly populate important updates, improve compliance, standardize operational communication, and all-in-all move the business forward with this impressive feature set.