How to start a trucking company
The current freight market makes one thing clear, America needs more truck drivers, and more people to start their own trucking businesses. Capacity is at historic lows and rates are skyrocketing nationwide. Spot Van rates in June rose to unprecedented levels, reporting a 23% increase year over year (DAT). Drivers across the country constantly consider starting their own trucking company. With rates through the roof, what better time to apply for your own MC and learn how to start a trucking company?
Here at Convoy, Owner Operators (trucking company owners who also drive their own truck) are the foundation of our company and the heart and soul of the American trucking network. Many owner operators are fulfilling a lifelong dream of owning a business. Convoy carrier, LBP3 Transportation, was ready to make more money and control his own schedule. “You can have the freedom to drive and run your company the way that is best for you.”
Are you a ready to start a trucking business?
Starting a trucking company requires an abundance of licenses before hitting the road. Below are the major steps recommended to become an Owner Operator and open your own trucking business:
- Register the Business: Establishing an LLC is the most common designation for Owner Operators. Doing so allows control of the business while limiting liability to the business owners personal assets.
- DOT Registration: The US Department of Transportation requires all motor carriers with vehicles having a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight of 4,536 kg (10,001 pounds), or more, whichever is greater, AND which operates in interstate commerce to register for a DOT number. Registering with the DOT must be done prior to applying for a motor carrier (MC) number. While some states don’t require intrastate only carriers to register with the DOT, many shippers and brokers (Convoy included) require all carriers to be registered with the Department of Transportation.
- Operating Authority: Issued by the FMCSA, any interstate carrier is required to register for a MC Number. Registration can be submitted through the FMCSA website. Obtaining an operating authority is not required for intrastate only carriers.
- BOC-3: All interstate motor carriers must file a BOC-3 designating a process agent in each state in which the company operates. Process agents are present to receive legal paperwork on behalf of the out-of-state trucking company. Filing a BOC-3 is not required for intrastate carriers.
- International Registration Plan: IRP is an agreement between the United States and Canada allowing carriers to be apportioned in all 48 states and 10 provinces.
- International Fuel Tax Agreement: Similar to IRP, all 48 states, and 10 Canadian provinces participate in the International Fuel Tax Agreement. Setting up an IFTA account is necessary to report mileage needed for fuel taxes across state lines. Quarterly tax filings are dependent on miles were driven in each state or province.
- Insurance: The FMSCA requires a carrier to have a minimum of $750,000 commercial auto liability insurance. While $750,000 is the minimum, it is suggested all carriers acquire $1 million commercial auto liability insurance and $100,000 cargo insurance as most shippers and brokers (Convoy included) require this level of coverage.
Note: While this list is designed as guidance for those interested in hauling general freight (not household goods, passengers, hazardous materials, or other special categories of freight), this list is not comprehensive and, depending on the characteristics of individual motor carriers, requirements may be different. Do your research!
When it’s time to hit the road
Finding that first load can be a complicated process that involves building relationships with brokers, finding a factoring company, or even hiring a dispatcher. But don’t sweat those details – Convoy makes talking to brokers, factoring companies, and dispatchers obsolete. The Convoy app is a great place to find that first load and begin learning about rates in your market. We pride ourselves on giving Owner Operators the necessary tools to receive loads directly without the struggles of dealing with brokers:
- We show you ALL of our available freight directly in the Convoy mobile app. We don’t follow the common industry practice of hiding loads or dedicating freight to large carriers.
- No need to talk on the phone all day trying to establish a relationship with a broker. Our app is self-service and allows YOU to book loads directly through Convoy.
- Convoy understands the upfront costs to start a business and wants you to get paid as fast as possible. We offer quick pay to all carriers with zero fees attached.
Never hesitate to reach out to Convoy directly if you need a helping hand while on the journey from company driver to a business owner. Our friendly team is waiting for your call!
About the Authors
Brian started at Convoy in early 2016 and was immediately drawn to the carrier side of the business. In his current position managing the South region of Convoy’s Brokerage Operations team, Brian focuses on serving our current carrier base and exposing new carriers to the benefits of Convoy. A graduate of Gonzaga University, Brian had a background in sales before jumping into the exciting world of freight. Outside of trucking, Brian enjoys eating great food, drinking great beer, and wishes every season was football season.
Travis is a senior broker operations specialist at Convoy. Having worked in freight for a number of years, he recently made the jump from the carrier side of LTL. In his time in freight, Travis has developed working relationships with drivers and brings insights from the carrier experience side of the industry. Outside of work, Travis enjoys attending all sporting events and is excited to transition from the Big House of Michigan football to rooting on his new local teams.