You may have come to a stop driving for others and launch your own trucking company. Or maybe you’re a total stranger to the transportation industry who’s decided now would be a good time to throw your hat in.
Specifically, how much money is needed to launch a trucking company? Keep reading to learn how much it will cost to launch your own trucking company.
Corporate Organization
Getting your business officially established as a legal entity is an initial step. Getting an EIN and forming an LLC are the first two steps in starting a business (EIN).
Depending on the state, the cost to register a limited liability company can be anywhere from $50 to $500. In addition, a fee might be assessed if you obtain your EIN through a business formation service.
Documents Required to Operate Lawfully and Pay Taxes
Your next step before launching your business is to secure all required permits and licenses.
To legally transport goods across the country, you’ll need a USDOT (United States Department of Transportation) number and a Motor Carrier (MC) number from the US Department of Transportation. In most cases, the total filing fee is $300.
You’ll also have to pay a flat rate to the Unified Carrier Registry (UCR) regardless of how many vehicles you plan to run. Fees start at $69 for up to two trucks and rise to $206 for three to five.
Getting IRP plates and IFTA fuel tax labels will cost you extra. IRP plates can cost anywhere from $1,500 to $3,000 per vehicle, depending on the state.
While the IFTA fuel tax sticker is inexpensive at only $2, it requires careful record-keeping of fuel purchases and truck mileage. Then, IFTA will decide if you owe fuel taxes or will receive a refund each quarter.
You’ll need to verify the CDL status and endorsements of all drivers. For example, a driver may need an endorsement to transport certain types of freight.
For transporting dangerous goods, you would need an “H” endorsement. Carrying dangerous goods costs $187.
The HGV use tax applies to each truck you operate. Costs range from $100 to $550, with individual states determining their rates. Depending on the state, you may be required to pay additional taxes on your HGV.
Cost of Equipment
The next step in getting started as a truck driver is to put down some money. If you can’t find a used truck in great condition, it’s best to buy a new one.
To keep an old car running can cost as much as buying a new one. Of course, your credit score will determine the exact amount but expect to pay anywhere from $3,000 to $10,000 for each truck you finance.
Policy Premiums
Insurance is the final major hurdle before getting your trucks on the road. You can expect to pay more for insurance if your truck is older or in poorer shape, if it transports expensive or unusual equipment, or if your business is located in a high-crime area.
A yearly premium for insurance can range from $5,000 to $7,000. But at first, the monthly outlay will be closer to $600.
How much money is needed to launch a trucking company?
The final price will differ greatly from one state to the next and from one number of vehicles to another. However, using the above data, we can estimate that it will cost between $10,000 and $15,000.
Purchasing trucks represents the largest initial investment needed to launch a trucking company. But then, all that remains is to apply for necessary licenses and submit paperwork.
However, once operations begin, you’ll need to factor in fuel, maintenance, and advertising expenses.
With this information in hand, you can begin planning for the launch of your trucking company by setting aside funds and applying for business loans.
Example of Successful Trucking Business in the US: GP Transco
As a startup, it’s important to look up to the journey of more established trucking companies in America and learn from their journeys. A remarkable example remains GP Transco, a trucking company that caters to the United States and Canadian market. The company was also hailed as the best trucking company to work for in 2021 and 2022 by Smart-Trucking and was also recognized on the list of rising growth potential of companies by Inc. 5000.
GP Transco’s dry van freight transportation and logistics services are trusted by many customers across the United States. Using cutting-edge technology and smart processes, this Chicago Tribune Top Workplace and EPA SmartWay Carrier Partner with over 500 trucks and over 700 trailers delivers superior freight transportation solutions to its customers.
Drivers for GP Transco are considered full-time W2 employees and receive a salary of $80,000 to $90,000 annually plus medical, dental, vision, life, long-term disability, and a 401(k) with a 5% employer match.
The company has begun conducting reviews every six months to determine whether or not drivers are eligible for a profit sharing increase of one cent per mile. Compared to the industry average turnover rate of around 99 percent, the carrier’s survey results showing that 94% of its drivers intend to still be employed by the company this time next year are striking. The company began rewarding the top 50% of its drivers with a monthly salary bonus based on fuel efficiency from 2019.