Starting a Trucking Company
Starting a trucking company can be a huge task, and it’s important to get the legal requirements right before you start operating. First, you’ll need to register your truck with the FMCSA and the Department of Transportation. Then you’ll need to file IRS Form 2290 and fill out various forms. You’ll also need to obtain IRP and IFTA decals, which vary by state.
Insurance is another important consideration. Your premium will be based on many factors, including your driving history and your credit score. A typical insurance premium for a single truck is $16,000 per year. If rates and demand for freight are high and the economic outlook is positive, a trucking company can become very profitable. However, you will also need to ensure that your costs and revenues are balanced. You’ll want to drive as much loaded miles as possible, but you’ll also need to look for ways to reduce expenses.
A company should be able to provide documentation supporting its insurance coverage, including insurance policy and license requirements. The FMCSA also requires that you register your trucking company with the Federal Motor Carrier Safety Administration (FMCSA). The paperwork you have to complete is not difficult, but it is time consuming. In addition, you’ll need to obtain a USDOT Number and an Operating Authority. These licenses will help you understand your legal obligations. You’ll also need to file for the Heavy Vehicle Use Tax (Form 2290), which is a federal tax on trucks over 55,000 pounds. This tax funds highway programs across the country. Lastly, you’ll need to register your trucking company with the FMCSA’s Unified Carrier Registration (UCR), which is designed to validate insurance coverage in all states.
A trucking company’s operations manager oversees all the loads for the company’s drivers. He or she should be flexible and willing to adapt to changes. Don Schneider, who founded Schneider, was an example of a successful business that embraced changes in trucking. In fact, he embraced rail for long-haul routes and intermodal innovations.
Trucking companies can use invoice factoring to increase cash flow and reduce administrative paperwork. A factoring company can also help trucking companies get paid faster. For some businesses, this means outsourcing some administrative tasks and sales strategies. Others might choose to hire staff when the volume of work requires it. It’s important to choose loads that pay faster and higher per mile.
A trucking company can be organized under several ownership structures. One option is to operate as a sole proprietorship, which puts you at risk of lawsuits if you get into an accident. Another option is a partnership, which is made up of two or more partners. This structure is usually more flexible and offers personal protection from lawsuits.
A new trucking company can focus on markets that are not targeted by the larger carriers. For example, it can specialize in hauling specialized loads. This choice will influence the equipment used and the rates you’ll charge. It’ll also determine which freight lanes to focus on. The most common types of freight include machinery, motorized vehicles, and electronics. Other types of freight include mixed freight, which includes commodities such as food and restaurant supplies.