What You Must Know About the Trucking Industry?
The trucking industry holds the majority of the freight movement. They are also the major stakeholder in the warehousing, transportation, and manufacturing industries not only in the United States of America but all over the world.
In the USA, business owners running trucking business –; drivers are required a commercial driver’s license (CDL) before operating.
Do you want to start your own trucking and transportation company?
If you are planning to operate trucking company as a hire carrier that will haul cargo across the state lines, you are required the following documents:
- Motor carrier operating authority (MC number)
- United States Department of Transportation (USDOT) number
Both numbers are provided by the Federal Motor Carrier Safety Administration (FMCSA).
Trucking is one of the most profitable industries in the United States
Without transportation companies, the economy would standstill. You can get into the biggest industry by opening a trucking company. Obtaining necessary equipment, business registration, and licenses will allow you to contribute your efforts for a better tomorrow.
How your trucking business will operate?
You can operate a trucking business by bidding on and compiling transportation contracts and accounts. Top trucking business usually operates in one or two categories- the difference lies in their method to acquire drivers to meet their contracts and accounts.
Sub-contracted drivers: In this option, you can run your trucking business by using sub-contractors as a driver. Though you are the owner of the business but drivers are not employed by the company. This option will cut down the insurance cost, start-up cost and required equipment.
Privately-owned drivers: In this option, you run all the operations of your business. you hire a fleet of drivers and pay higher insurance prices. This option promises the most returns and profits but on the other hand, it demands a great deal of start-up capital.
How to Find Loads to Haul?
If you have newly established your trucking company, load boards can help you to find freight. So you can start your hauling. Load boards help you to establish a relationship with various shippers and brokers. Once you maintain a strong customer base, you can direct meet your customers’ requirements without any mid-channel.
Check the Credit Regularly
Check credit on customers before you haul- It is also the best way to evaluate shippers and brokers. Doing so will make you confident that you are being paid regularly.
How to Maintain your expenses when setting up a new trucking company?
It is very important to figure out your trucking company business expenses. A bookkeeping software or a profit and loss statement can be great ways to track maintenance costs, fuel, office expenses, insurance payments, truck and trailer payments, and other office expenses. All expenses track will help you to set minimum amount per mile.
How to Save Money on Fuel in the trucking business?
Fuel can be 40% as compared to trucking company operating expenses. Getting a fuel card will help you to manage and control the fuel money at the filling station. Using fuel card gives you multiple benefits like IFTA reporting information, fuel management tools, and fuel theft protection.
How to manage cash flow to operate medium-sized trucking company?
As a start-up, you might not be able to receive line of credit from the bank to keep the trucks running. You can have the option of factoring companies that will help you to manage your cash flow and your trucks keep running on the road. Factoring companies offer you an advance percentage to manage your necessary expenses to operate your trucking business.
Comply with all trucking-specific business permits, forms, and licenses
In addition to the general state and federal requirements, there are permits, license, and tax regulations applied specifically to the trucking industry. Following requirements may include depending on the type of your trucking business:
- Motor Carrier Authority Number and Federal DOT Number
- Heavy Use Tax Form (2290) should comply with the tax regulations relating to heavy use of the USA roads along with IRS Form 2290
- International Registration Plan (IRP)
- International Fuel Tax Agreement (IFTA)
- BOC-3 Filing
With these operational requirements, if you are planning to hire private drivers, you will need to obtain special driver endorsement or permits, such as commercial driver license to legally operate the vehicles.
Obtain necessary insurance requirements
You will be required to meet the necessary insurance requirements such as comply with employee safety and health regulations and standards. The U.S. Department of Labor's Occupational Safety and Health Administration offers assistance for the trucking industry to meet certain expectations.
How to register an on online transportation company?
If you want to setup an online transportation company, you are required to register with your state office. You can choose one of the business structures such as:
- Corporation
- Limited Liability Company
- Sole proprietorship
- General partnership/Limited partnerships
