Starting Your Own Trucking Business: What It Takes and What It Costs

The trucking industry is a significant player in the U.S., providing jobs for 6% of the workforce and generating revenue that surpasses the GDP of many countries. If you're thinking about diving into this booming industry by starting your own trucking business in the USA, here's a friendly guide to help you understand the steps and costs involved.

1. Registration
Cost: Up to $1,590 (one-time fee)

Your journey begins with registering your company. To legally transport goods within the country, you'll need various permits. Start at the state level, where you'll check if your chosen company name is available through the Department of State. Once approved, your company becomes official and its details show up on the Department of State's website.

2. TAX ID Number
Cost: $79 (one-time fee)

Getting a TAX ID number is essential for opening a business bank account and paying your annual taxes. It's like your company's federal ID card and can even be obtained if you're not a U.S. resident. The process is usually online, making it hassle-free.

3. MC Number and DOT Number
Cost: $300 (one-time fee)

After sorting out your registrations and TAX ID, you'll need a Motor Carrier (MC) number and a Department of Transport (DOT) number. These digits are your tickets to legally transporting cargo and must be displayed on your trucks, showing off your company name, MC number, DOT number, and more. Depending on your needs, you may require additional trucking-related registrations.

4. Purchasing Trucks and Trailers
Cost: It Varies

Now comes the exciting part – buying trucks and possibly trailers. You can opt for brand-new or used vehicles. New trucks range in price, starting around $113,000. A new sleeper truck goes for roughly $125,000, while trailers typically cost about $50,000. If you're looking for specialized trucks, they can be pricier.

Used trucks are budget-friendly but be careful with extremely cheap options, as they might lead to high repair bills. Aim for trucks less than five years old with fewer than 600,000 miles. The average price for a used class 8 truck was about $43,808 recently. Before buying, thoroughly inspect the vehicle and check its history.

5. Heavy Vehicle Use Tax
Cost: $100 - $550 per year

Trucks weighing over 55,000 pounds are subject to the Heavy Highway Vehicle Use Tax. Trucking companies need to file an annual return and pay the tax for their fleet.

6. Insurance
Cost: $9,000 - $12,000 per year

Insurance is your safety net for trucks and cargo. It comes in three main flavors:

Physical damage: Covers your truck's full value.
Cargo: Usually recommended at $10,000.
Liability: Covers damage caused by your truck or driver to third parties.
You're looking at an annual cost of $9,000 to $12,000 per truck for comprehensive coverage.

7. IRP Plates Registration and IFTA
Cost: $1,500 - $2,000 per year

IRP plates are essential for trucks that travel across state lines, listing all 48 continental U.S. states. IFTA (International Fuel Tax Agreement) usually comes bundled with IRP plates and involves renewing an annual decal by paying fuel taxes. The cost varies but typically falls between $1,500 and $2,000.

8. ELD, Trailer Trackers, Dash Cams
Cost: Approximately $950 per year

These tech tools boost your business's efficiency and safety:

ELD (Electronic Logging Device): Keeps you compliant with driving regulations and tracks driver hours.
Trailer Trackers: Monitor your trailer's location.
Dash Cams: Record driving footage, potentially lowering insurance costs.
ELDs cost around $350 per year, Trailer Trackers are $250 annually, and Dash Cams add another $350 yearly.

9. Hiring Drivers
Cost: Average of $59,925

If you're thinking of expanding, hiring experienced drivers is a smart move. Skilled CDL-licensed truck drivers with technical know-how are your secret weapons. They earn an average of $59,925 per year, though it depends on factors like trip length and type. Before hiring, do thorough background checks, including Compliance Safety Accountability records, driving history, and drug testing, which costs about $300 per year.

10. Running the Business
Variable and Fixed Expenses

Running your trucking company involves various expenses:

Variable Costs:
Fuel: Costs vary depending on mileage and vehicle efficiency, with an average cost of $1.82 per mile in the USA.
Factoring Fees: Factoring companies charge around 3% to speed up client payments.
Tolls: Use EZ passes to avoid toll booth stops, with costs differing by location.
Scales: Pre-passes help skip scales, similar to EZ passes.
Permits: Some states require additional permits.
Dispatch Fees: Typically a flat rate per load, usually 5-10%.
Hotels: Drivers may need accommodations during long hauls.
Maintenance and Repairs: Regular maintenance averages around $16,000 annually, but it varies based on your truck's condition.
Starting a trucking business is a thrilling adventure, filled with financial investments and regulatory obligations. But with careful planning and management, it can be a rewarding journey in an industry that keeps the wheels of the nation's economy turning.