Haul Star Pro Tips: The Expenses of Starting a Trucking Company
Carriers • Published on March 19, 2021
Over the last 22 years Shain, owner of Greenmiles, has invested his time into acquiring and sharing a knowledge base for the trucking industry. Shain has directly mentored dozens of new owner-operators through the hurdles of becoming a new motor carrier and has indirectly helped thousands more through his interactions on social media.
He is the proud founder of the Facebook mentorship group, “Raising the Trucking Bar”, which aims to help other drivers accomplish their goals and provide resources to help educate and inform new carriers operating in the United States.
In partnership with Convoy, Shain has identified the main expenses and resources associated with becoming a new carrier. Read our six steps on How to Start a Trucking Company.
The Largest Expenses for a New Carrier
Trucking Insurance – $12,000-96,000 per Year/Truck
The very first thing you should do (before starting a new authority) is to inquire about potential insurance expenses. These expenses can change drastically based on an individuals’ driving record, the business owner’s credit, the type of freight hauled, and driver equipment. For more information on filing your insurance with the FMCSA, click here.
Note: If you plan to haul freight with Convoy, make sure RMIS is listed on your insurance as a certificate holder. RMIS (Registry Monitoring Insurance Services) provides continuous Certificate of Insurance (COI) monitoring on auto and cargo coverage, as well AM Best Ratings for insurance providers.
International Registration Plan (IRP) – $1600-2500
The IRP is the national registration program that will distribute funds to the states you travel to. Although the IRP pricing will vary by state, the FMCSA provides a wonderful resource to register, file, pay, and manage IRP’s.
Truck – $25,000–175,000
The price of the truck will vary dramatically, however, carriers should expect to have no less than $25,000 invested in a roadworthy truck. New carriers can utilize Convoy’s discounts on Penske and Ryder trucks by visiting Convoy’s TruckYeah Savings page.
For advice on finding the right truck (used or new), we also recommend you join the Facebook group, “Raising the Trucking Bar”. This group is run by the Greenmiles team of owner-operators, who specialize in educating and mentoring new owner-operators/carriers who join the industry.
The Smaller Expenses for a New Carrier
Operating Authority Cost – $300-500
There is a $300 FMCSA filing fee to get your MC/USDOT Numbers. New carriers can also pay a service to file for an authority to do it for you. Please note, the FMCSA does not refund filing fees, so make sure you have explored the expenses of your insurance prior to filing!
As part of the New Motor Carrier Authority, you need a Processing Agent to file Form BOC-3. This form can only be filed by a processing agent. For a complete list of third-party processing agents, click here!
Business Registration – $10–500
Before you begin your motor carrier registration, you need to register your business and receive an Employer Identification Number (EIN). The cost of business registration varies per state, but we recommend new businesses use the online IRS portal.
Unified Carrier Registration (UCR) – $59 (minimum)
The UCR fees start at $59 for 0 to 2 vehicles and increase as more vehicles are added to your fleet. For a full list of the fees based on fleet size, click here.
Federal Highway Tax (2290) – $550
The Heavy Vehicle Use Tax (HVUT) Form 2290 is a form the IRS requires you to pay annually if a vehicle operates on public highways at a weight equal to or exceeding 55,000 pounds. To learn more information about this tax, click here. If you are interested in having a third party pay for this, Greenmiles recommends Express Truck Tax!
State Permits – $0-25
Some states require you to register with them separately. The best resource available with the FMCSA can be found here.
Drug Consortium – $100 per year
Pre-Employment Drug Screen – $65-75 per test
The cost of the consortium does not include the cost of the physical drug test. Your carrier should plan on having each driver tested prior to driving. Carriers can contact their consortium for more information about scheduling a test.
Additional Discretionary Expenses in Trucking
Trailer – $0-80,000
The price of the trailer varies depending on the type of freight you will be hauling and the year of the trailer. If you wish to utilize Convoy’s discounts on Penske, Ryder, and Great Dane trailers, visit Convoy’s TruckYeah Savings page!
Carriers can always choose to haul Power Only freight if they wish to avoid purchasing or renting trailers. For more information on Convoy’s Power only loads program.
Maintenance Fund – $0-25,000
Trucks break down. A smart business owner plans for these expenses by setting aside savings for rainy days. If your truck has warranty coverage, Shain recommends saving 10-15 cents per mile. If you do not have a warranty, Shain recommends having enough funds saved to cover a catastrophic engine failure.
Fuel – $100-7,500
Depending on payment terms, new carriers could expect to run six weeks before the first load pays out. Thankfully, Digital Freight Networks like Convoy provide Fuel Card programs and Free Quickpay on loads!