MSW Enterprise Ltd. Professional Services

The trucking industry market size is expected to grow at a 3.0% CAGR through 2027, and truck driver jobs are expected to grow 6% through 2030. AltLine reported, in 2022, the United States trucking market was worth $217.3 billion, and the global trucking market was worth $2.2 trillion. Freight carriers are an essential part of the economy, and truck drivers are responsible for transporting 71% of the U.S. economy’s goods.

A major and important trend boosting the trucking industry is the use of technology platforms and data & analytics to support the daily business of trucking. Trucking has gotten more visibility over the last few years both due to rising demand and to supply chain issues. To keep up with market expansion, owner-operators, carriers, brokers, and shippers are seeing the benefits of technology. App-based solutions li are changing the game. With DAT One, you can access the largest load board in the U.S., factor loads quickly, and grow your business with solutions at your fingertips. Additionally, the amount of data collected daily on the billions of dollars of freight transported throughout the U.S. can bring actionable insights for owner-operators and trucking businesses looking to expand.

6 Important Steps to Starting Your Trucking Business Include:

1. Creating a business plan. This plan should include your foundational reasoning for starting the company as well as the necessary capital to get the company off the ground. Typically, a business plan will include a 3-5 year projection of how you expect the company to grow. As a new business owner, developing a thorough, detailed plan is extremely important because it’s a stepping stone to the rest of the process.
2. Secondly,  you will need to have a commercial driver’s license, or CDL, depending on the type of equipment you want your company to acquire, as required by the Federal Motor Carrier Safety Administration (FMCSA). Some business owners opt for acquiring Cargo, Box, or Sprinter’s where the licensing requirements aren’t so stringent. If you opt for hauling heavy freight that requires the use of Sleeper Trucks, Flatbed Trailers, RGN’s, or Step Decks, you’ll need to acquire a CDL license. There are different types of CDL licenses, so it’s important to know which type your business will require. Depending on the type of materials you are transporting there are also endorsements needed, many of which require additional testing and may mean you have to renew your license more frequently for safety reasons. Make sure to do your research and ensure you have the proper licenses for your business needs. The application requires fees, proper identification, tests for knowledge and vision confirming you understand the requirements for operating a large truck.
3. Thirdly, you’ll need to officially get your business up and running, which will require you to register with local and state governments according to regulations in your area. This process includes choosing a business entity that suits your needs. For example, if you are starting the business alone, you may want to consider a limited liability company (LLC) for the protections it affords. There are other types of LLCs for partnership companies or larger corporations. Next, you will want to choose a business name that expresses the identity of your company and communicates a strong impression to customers. Before doing so, it is important to consult the US Patent and Trademark Office database to make sure your company name is original. Finally,  you will need to apply for your trucking authority. This registration is mandatory for companies using vehicles of more than 10,000 pounds Gross Vehicle Weight (GVW). You can file an application concurrent with your business registration through your state.
4. In order to officially get your business up and running, you will need to register with local and state governments according to regulations in your area. This process includes a couple steps, as seen below. First, you will want to choose a business entity that suits your needs. For example, if you are starting the business alone, you may want to consider a limited liability company (LLC) for the protections it affords. There are other types of LLCs for partnership companies or larger corporations. Next, you will want to choose a business name that expresses the identity of your company and communicates a strong impression to customers. Before doing so, it is important to consult the US Patent and Trademark Office database to make sure your company name is original. Finally, you will need to apply for your trucking authority. This registration is mandatory for companies using vehicles of more than 10,000 pounds Gross Vehicle Weight (GVW). You can file an application concurrent with your business registration through your state.
5. Following your registration procedures, you need to make sure to obtain the proper licensing and permits to operate your business legally. Because of the unique challenges trucking companies face in a highly regulated industry, it is important to research all requirements before you begin operations. These steps may include:
   • Getting your U.S. Department of Transportation (USDOT) number
   • Getting your MC/Operating Authority
   • Getting your International Fuel Tax Agreement (IFTA) stickers
   • Obtaining an Employment Identification Number (EIN)
   • Register for properly apportioned license plates
   • Obtaining a Standard Carrier Alpha Code (SCAC) from the National Motor Freight Traffic Association (NMFTA)
   • Acquiring proper local/state business licenses
   • Obtaining commercial liability, cargo, physical damage, and other necessary types of trucking insurance
   • Obtaining a processing agent
   • Joining an Alcohol and Drug Consortium

Lastly, let’s discuss, the costs required to start your trucking business which ultimately depends on your location, number of trucks, and business plan. Registration, taxes, and other paperwork to start the business alone can cost up to $15,000. Obtaining your CDL also depends on the locality but typically costs between $3,000 to $10,000. Once you start purchasing equipment the cost rises significantly, but, as mentioned above, the total cost will depend on many factors such as leasing or buying new vs. used trucks and trailers.

As discussed above, you will need to make a detailed business plan which forecasts possible revenue and other related financial projections to make sure your company will have cash flow and can remain profitable and successful.

Although, the steps above may seem daunting, remember, owning and operating a trucking company can actually be highly profitable! This is partially due to it being one of the world’s oldest and most reliable industries.