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How to Start a Trucking Business

Protect your personal assets in the trucking company startup.

Deborah Sweeney, CEO of MyCorporation


The trucking industry benefits everyone across America. Studies show that trucking moves 71% of all freight in the United States, more than 10 billion tons of freight per year. Without long-haul drivers, grocery stores would start running out of food and supplies within three days.

Nearly 6% of all full-time jobs in the United States are in the trucking industry. This may be the perfect time to start a trucking company. Many entrepreneurs choose to be an owner and operator. This means that you are responsible for driving and maintaining your own truck. As time progresses and your trucking business expands, you may choose to assemble a fleet of trucks and hire drivers to support your growing activities.

Start A Trucking Company | LLC For Trucking Company

Do you have the drive it takes to succeed? Below is everything you need to know about starting a trucking company.

Step 1. Obtain a Commercial Driver's License (CDL)

A standard driver's license will not be sufficient for entrepreneurs starting a trucking company. Truckers that plan to drive a Commercial Motor Vehicle (CMV) must first obtain a Commercial Driver's License (CDL).

A CDL will provide drivers with the necessary skills and knowledge for driving non-commercial vehicles. Truckers must obtain this license through their home state. Contact your state licensing bureau, like the Department of Motor Vehicles, with any questions you may have about the CDL program.

Step 2. Buy or Lease a Truck

After obtaining a CDL, truckers have the option to buy or lease a truck.

This choice often depends on the entrepreneur's financial situation and needs as a trucker. In addition, it's a good idea to consider whether you need to buy or lease other trucking equipment. For example, this may include trailers, reefers, or vans.

Step 3. Writing a Trucking Business Plan

The trucking company should be built on a foundation within a business plan. A business plan allows you to set goals for the company. You may establish timelines in this plan to reach each goal and milestone you have for your trucking business.

When you are working on your business plan, you will want to conduct a market analysis. For example, look at who makes up your client base. What are your plans for growing clients and sales? You may also outline who is responsible for handling accounting and invoicing and the process for hiring employees. In addition, cover expenses and guidelines to follow for trucking maintenance and parking.

Step 4. Trademark the Business Name

What will you name your trucking company? A business name should be original. Clients should be able to easily identify the business and its offerings.

Once you pick a business name, it's important to conduct a name search. This allows you to check if the trademark is available or if the mark is already pending elsewhere. If the trademark is available, file to register the trademark. Registering the trademark gives the owner exclusive rights. To sum up, it insures nobody plagiarizes the mark.

Step 5. Incorporate the Business

A trucking company may choose to be a sole proprietorship. This is the default entity formation. However, a sole proprietorship does not include limited liability protection. This type of protection may be found by forming a limited liability company (LLC) for the business.

Incorporating as an LLC provides trucking businesses with limited liability protection. This separates personal and professional assets. Let's say an unforeseen circumstance occurs, such as accruing business debt. There will be no impact to the owner's personal belongings, like houses and cars, due to limited liability protection.

In addition, other entity formations are also available. You may consider incorporating as a corporation or a partnership. Meet with a legal professional if you have any questions about the process. They will help you determine the entity that is the best fit for your business.

Step 6. Designate a Process Agent

Carriers must designate a process agent on behalf of the business. This is the point of contact to whom court papers are served in a legal proceeding. The process agent must be designated for each state or through which the carrier operates and a resident of that state. Only the process agent, on the carrier's behalf, may file Form BOC-3 with the Federal Motor Carrier Safety Administration (FMCSA).

Step 7. Obtain a Tax ID

Does your trucking company plan to hire employees or open a business bank account? You'll need to file for an employer identification number (EIN) in order to do either - or both.

An EIN is a federal tax ID. The IRS issues this nine-digit number to businesses to legally identify the business and ensure it remains in compliance paying federal and payroll taxes. In addition to being a hiring requirement, an EIN is also required when opening a business bank account and establishing business credit.

Step.8 Complete Compliance Filings To Start A Trucking Company

An owner-operator starting a trucking company will need to obtain the additional filings to stay in compliance. These legal requirements must accompany your CDL, U.S. Department of Transportation Number, and license plates.

  • Apply for a USDOT Number. A USDOT Number is a unique identifier when collecting and monitoring a company's safety information. Commercial vehicles that haul cargo in interstate commerce must be registered with the FMCSA and have a USDOT Number.
  • Operating Authority (MC Number). An FMCSA operating authority, often identified as MC, is a requirement for transporting passengers or federally regulated commodities owned by others in interstate commerce. You may file an operating authority application through FMSCA.
  • International Registration Plan (IRP). The International Registration Plan (IRP) is an agreement between U.S. states and Canadian provinces. It recognizes the registration of commercial motor vehicles registered by other jurisdictions. Registering through IRP and paying the registration fee allows your truck to haul interstate loads and freight through Canada.
  • International Fuel Tax Agreement (IFTA). Is there a tax on fuel? Yes. The International Fuel Tax Agreement is established between U.S. states and Canadian provinces to help simplify fuel use reporting by drivers in multiple states. Carriers will file a quarterly fuel tax report to determine their tax.

In addition, there may be more filing requirements for your trucking company. For example, you may pay heavy vehicle use tax. Check in with the FMCSA and SBA for a full list of requirements.

9. Obtain Truck Insurance to Start a Trucking Company

As a driver or carrier, it is critical to protect your trucking business with truck insurance. You may choose from insurance that includes primary liability, physical damage, and/or non-trucking use depending on your needs.

Additional Trucking Startup Information

In conclusion, this is a basic guideline for starting a trucking business. You can find more assistance through the FMSCA and American Trucking Associations.

Frequently Asked Questions

What are the benefits of forming an LLC for a trucking company?

Forming a Limited Liability Company (LLC) for a trucking company helps in several ways. Firstly, it provides limited liability protection for the owners, meaning their personal assets are safe. Only the business assets would be in jeopardy from business debts and lawsuits.

Additionally, an LLC offers flexibility with the management structure and tax options. This allows the owners to choose how they want the company to be run and taxed.

Finally, an LLC can improve a company's credibility and professionalism in the eyes of customers, suppliers, and lenders. This can help for securing contracts and financing.

What is the best way to finance a trucking company startup?

Securing a business loan from a bank or other financial institution is the most popular way. However, this can be tricky if you don't have a strong credit history or collateral to put up.

Another option is to seek out investors or venture capitalists interested in funding startups.

Crowdfunding and government grants are also viable options, but they can be competitive and time-consuming to secure.

When all is said and done, the best way to finance your trucking company startup depends on your circumstances and goals. See what options you have and review them before officially deciding on one. 

What are the permits and licenses needed to start a trucking company in California?

Starting a trucking company in California requires obtaining several permits and licenses. First, you'll need a Motor Carrier Permit from the California Department of Motor Vehicles (DMV).

Next, Unified Carrier Registration (UCR) from the Federal Motor Carrier Safety Administration (FMCSA) is required. You'll also need a Commercial Driver's License (CDL) to drive the trucks legally.

You may need additional permits to transport special cargo, such as a Hazardous Materials Endorsement (HME). Ensure you obtain any licenses if you plan to haul dangerous items. Failure to do so can result in losing the business and lawsuits.

What are some tips for selecting the right insurance for a trucking company LLC?

Some tips for picking the right insurance include determining the level of coverage you need. This can change based on where you drive or what you haul.

You should also consider the deductible and premiums for the policy. Look for ways to lower your insurance costs without losing important coverage. Research and compare insurance providers to find one specializing in trucking insurance. This can make any claims easier to process due to extensive trucking knowledge.

Lastly, read and understand the policy terms and conditions before signing up. Make sure to ask questions if anything needs to be clarified. 

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