The competitive commercial freight business sees a multitude of startups each year. Whether they're offering local runs or operating internationally, trucking companies must meet a common set of logistical challenges. The first of these is a deciding to hire drivers as either contractors or employees. Newcomers must also deal with licensing, physical infrastructure, communications, staffing and sales.
Decide whether to hire employees or contract work out to independent drivers. By hiring drivers as employees, an owner pays a regular salary based on hours or distance, and exercises more control over costs and basic logistics. By working with independent contractors, the business has more flexibility, lower staffing and equipment needs, and lower insurance costs. However, using independent operators may lower operating margins and profits. To find drivers, website ads, blogs, print advertising and job fair events are common recruitment methods in the industry. State law requires drivers to have a commercial driver's license, or CDL, depending on the size of vehicle they'll be using and the freight they're hauling. You may also need to conduct drug tests and criminal background checks on potential new hires.
Building a Fleet
Trucking companies can purchase or lease their equipment. New commercial trucks can cost up to $250,000, according to TruckertoTrucker.com. You can avoid the upfront financial commitment by shopping around for used vehicles or leasing. Leasing allows more flexibility, and you can avoid the down payments, interest costs and depreciation of an owned vehicle. Leases in this sector usually allow open-ended driving, meaning no limitation on mileage or on how the vehicle is used. With either option, you must carry commercial vehicle insurance. If your drivers are independent contractors using their own vehicles, insurance costs are their responsibility.
Developing a Market
Businesses that need commercial freight services have plenty of vendor options. Their primary interest is reliability and cost. If you can't beat the competition on both fronts, your business will struggle. To find leads, contact company shipping managers, hand out business cards, attend trade shows and job fairs, chat up local drivers and shipping managers, and take any opportunity to learn from those in the know about the business. Prior experience provides a steppingstone to this essential know-how, but actually running a trucking company is fraught with more decisions and challenges than you may have imagined.
Licensing and Regulation
Once the company is established, you'll have to deal with licensing and regulatory issues; the first step is to get acquainted with the Federal Motor Carrier Safety Administration, which enforces federal regulations on trucking companies. New companies must apply for a U.S. Department of Transportation number if they are running vehicles with a gross vehicle weight of at least 10,001 pounds, or are transporting hazardous materials. Individual states also require registration of commercial trucking companies, and have their own DOT number, which must be displayed on the vehicle. Like any other commercial enterprise, you also need the business license and permits that the state and/or locality requires. You must also verify that your drivers have their state-issued commercial driver licenses with any required endorsements for oversize or hazardous loads. .
- Small Business Administration: Starting a Trucking Business
- Owning a Trucking Business - Requirements, Steps and Benefits
- TruckNews.com: So You Want to Start a Trucking Company?
- Randall Reilly: 3 Marketing Principles to Help You Recruit Truck Drivers
- TruckertoTrucker.com: Leasing and Financing for Commercial Trucks
- Federal Motor Carrier Safety Administration: Do I Need a USDOT Number?
- Photo Credit Peter de Kievith/iStock/Getty Images
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