Are You Starting a Trucking Company? Here’s What You Need to Know

I tend to believe that most people would like to someday, own their very own business, where they are the boss and they have the final say in their own financial future.

However, the fact is that most people don’t actually believe, for various reasons, that they are capable enough to actually start and run their own company. 

It’s never easy getting a business started in any industry. However, a lack of transparency means that many people are sometimes confused in terms of starting a trucking company.

It is true, running your own company can be more time-consuming, a little more complicated, and at times, a bit frustrating. However, the benefits from operating as an independent operator far exceed and outweigh any potential hurdles that someone might go through, which is exactly why more and more people are minimizing their risk and venturing into that unknown territory and finding companies like Federal Carrier Compliance Registration to assist them with all of their legal filings and compliance requirements. A company like Federal Carrier Compliance Registration will file and register all the complicated filings for someone, such as filing for the independent operator’s USDOT Number, LLC filing in their state, EIN# with the I.R.S., Intrastate Authorities for those operating in states that require such, Public Utility filings that are required in specific states along with specific regulation requirements that differentiate from one driver to the next depending on which state they’re operating out of and if they’re crossing state lines and if they’re for hire.

These requirements are known as compliance mandates set forth by the USDOT and FMCSA such as:

Most new USDOT applicants are thrilled to be able to find a company that performs such services and is relatively cheap, especially when compared to most “Consulting” firms that have a professional organization with a dedicated agent at your side, walking the average USDOT applicant through all of these stages and semi-complicated steps. But to have someone perform that service for someone new to the industry is so absolutely essential and will truly make all of the difference in that individual’s experience. 

There are many online resources with information but few websites, pages, or articles that outline a simple list of the basic things you need to know.

Create a Plan and Strategize

When first starting out driving truck, it’s wise to have a plan. Too many individuals simply buy a truck and get a DOT Number and off they go, all because they used to drive a truck for someone else, they feel they understand what all it entails. Individuals would tend to benefit greatly if they’d simply see the importance of having a well-thought-out plan combined with asking the right questions. Experienced owner-operators tend to know that the more you start thinking ahead with strategizing, planning, and organizing, the more you’re ensuring that your future endeavors will be successful.

Pros and Cons of Starting a Trucking Company

First of all, you decide when to work, if there’s an event that you would like to take off for, you’re able to do so. There’s also the fact that you’ll make 3 to 6 times on average more for doing the same exact thing, driving truck. Also, there is the freedom of creative control, if you feel like things could possibly be done better or just done in a way that you enjoy the job more. You can hire others to work and drive for you so you won’t have to be gone as much, but yet are still making an income. Really, when it comes down to it, there are lots of reasons why someone would want to operate independently.

Whenever something breaks, you have to be able to cover the expense of fixing it or you won’t be able to operate. Managing all of the extra requirements, compliance, and state and government requirements. Having everything really rests upon your shoulders.

When thinking about some of the cons. If someone could mitigate some of the risks, as in having a company like FCCR, that takes away all of the extra frustration with the state and government compliance requirements, along with the risk and confusion regarding what one needs and doesn’t need to have. Not to mention that everything already does really rely upon one’s shoulders anyway. 

So, when someone really thinks about it, when you choose to operate independently, you can make a lot more money and end up with pretty much all of the benefits. I believe an applicant said it like this, “I much rather have the problems associated with running your own truck than have the problems running someone else’s and not be able to reap any of the benefits.” All and all you’re going to have ups and downs regardless no matter what you do and most of FCCR’s clients will say that it was worth it and others will say that it’s not for everyone, but whether or not someone should up and quit their job, well I guess that’ll be up to them to decide, “Is it worth it.”

Regulations, Finances, Insurance, and Your Business Plan

When it comes to deciding whether or not one should leave the company that they’ve been operating for 1,2, or 3 years plus, to venture out and operate as an independent operator, they must consider a few things and probably conduct some thorough planning prior to making the change to an independent operator. Let’s take a look:

  • Finances – You will not only need capital finance to cover the costs of the truck/trailer but also the costs associated with registration and licensing. For this reason, you will also need to think about where to secure this line of credit and save money to cover as much of these costs as possible.
  • Business Plan – You need a business plan to outline what kind of expenses or revenue you can expect. Without a business plan, any business is vulnerable and far less likely to succeed.
  • Licensing – As mentioned above, you will need to acquire a commercial driver’s license. Needless to say, this training program will also cost money and licensing is mandatory for anyone that wants to start a trucking business. If you already have your CDL you are ahead of the game.
  • Insurance – According to law, you must have $750,000 primary liability coverage, and some shippers/brokers require $1 million or more. That being said, you will also need cargo insurance and any physical damage to the actual truck. Insurance is often the most expensive aspect of a start-up a trucking company.
  • Lease – You can choose between various types of leases. For instance, a full-service lease will cover taxes, permits, and maintenance. Meanwhile, a lease-purchase plan is for those who might not have a decent credit history.

What most people don’t realize when first starting out, is that when it comes to filing a Motor Carrier Authority, you need to have the specific insurance for the F.M.C.S.A. to grant Authority in a 21-24 day timeframe after the USDOT Number was filed. If the necessary steps aren’t taken in the specific order that they’re needed to be done, it could drastically change the outcome and cause a multitude of issues, not to mention if you’re filed wrong, an applicant can sometimes pay for thousands of dollars of insurance each month that isn’t even necessary, we’ve seen it happen plenty of times. FCCR makes sure there is no wasted time or money.

What Questions Should I be Asking Myself About my Trucking Company?

There is really no end to the questions that you should be asking. After all, the more questions you can ask, the more certainty you will have moving forward. That being said, here are some of the most common questions that you might want to consider:

  • Where will you park the truck/s?
  • Who will you employ to drive the trucks?
  • Who will take care of truck maintenance?
  • Who will take care of accounting, invoicing, and other paperwork?
  • Where will you load trucks or even locate these loads?
  • What laws and regulations should you know about?

That said, let’s take a look at some of the regulations which apply.

What Regulations Apply to Me?

  • Operating Authority – You need authority from the Department of Transport to move goods across state lines.
  • Heavy Vehicle Tax – Does your truck weigh more than 55,000 lbs? You will need to pay tax.
  • BOC-3 – You will need to appoint an agent in each state where you have an office for the business.
  • USDOT Number – You must acquire this number from the Department of Transportation. The USDOT is used to monitor company safety etc.
  • IFTA Decal – If you intend on driving between multiple states, you must have a decal for the International Fuel Tax Arrangement (IFTA).

While this is not an extensive list of regulations, these are some of the most important to keep in mind.

After you’re able to get the compliance end of things squared away, that’ll be a large part of the headache gone. However, most don’t have the time or patience to want to go and do all the digging and research themselves. That’s where FCCR comes in, we’re trained professionals in DOT & FMCSA compliance requirements, rules, and regulations. We’re quickly able to determine what all you’ll require, regardless of state, operating class, cargo, or carrier operation, and will even fill out the application on your behalf. We always go above and beyond for our clients by assigning them their own personal, dedicated agent that they’ll speak with every time they call and that knows their specific situation.

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