How to run a trucking company
How Much Does Starting a Trucking Company Cost?
This is a common question that our business receives from new customers. But there is no simple answer. So, here’s the truth. The cost of forming a trucking company always varies. It depends on the nature of your business and the state where it’s located. Plus, the cost of starting a trucking business will fluctuate. Why? Because it depends on the specific type of company that you intend to start.
Here is an example of starting a trucking business. You must decide the type of cargo or freight that you intend to haul. Then, you'll need to figure out the type of operation you plan to run. Next, you must secure trucking insurance coverage that fits your business. Here is the average cost of investment for a new trucking company owner. It ranges from about $10,000 to $20,000. You will need this capital to form a small trucking business. This estimate relates to owning a startup with either one or two trucks. Next, let's continue by breaking down what your money will go toward. Click here to discover Starting a Trucking Company Correctly.
Basic Costs When Forming a US Trucking Company
Are you considering creating your own trucking company? If so, you need to know which startup costs you can expect. The key is to get these expenses knocked out right away. Then, you can begin analyzing potential ongoing costs. Written below are some common basic trucking company costs for new business owners. Please let our organization know if you have any questions about these costs. For additional information Driver Qualification Files.
CDL: Commercial Driver’s License
Say that you do not have a CDL (commercial driver’s license) at the moment. You must get one right away. Otherwise, you will not have the ability to drive any commercial vehicle. Thus, you will miss out on a critical component of running a trucking company. The cost of securing a CDL varies from state to state. Here is an example. The cost of a brand-new CDL in Texas will set you back $97. Find out more Contact us to get an IFTA sticker & IFTA license from us today.
Once you buy a CDL, each state will make you take a CDL training course. You cannot receive a valid license until you pass the course. In most states, the cost of taking a CDL training course exceeds the cost of a license. CDL training courses in Texas cost an average of $3,800 to $4,500. Find out more about DOT Clearinghouse Enforcement.
The MC (Motor Carrier) Number & USDOT Number
Are you familiar with a USDOT number? It stands for a United States Department of Transportation Number. The FMCSA uses the number to recognize all companies in trucking. (FMCSA refers to the Federal Motor Carrier Safety Administration.) These businesses transport cargo or passengers through interstate commerce. But they can only do so once they have an active DOT number. Extra information DOT Compliant Drug.
An MC (Motor Carrier) number is much like a DOT number. The MC number recognizes carriers that transport regulated commodities. These carriers do so on a for-hire basis within the interstate commerce sector. Every company that transports loads across more than one state needs a number. The FMCSA will charge you over $300 to get an MC number and DOT number. But you do not have to go through the FMCSA to register your numbers. Instead, our third-party company can provide you with each number. Please browse our website to learn about ordering MC and DOT numbers. Additional information Texas DOT Number.
Truck & Trailer Costs
The most important trucking company startup cost is a new or used truck. Commercial vehicle costs vary based on many different factors. A key first step is for you to decide if you want to buy a new or used truck. Here is an example. Say that you intend to buy a used truck for your new company. The cost of the truck can range from $14,000 to well over $100,000. The age and size of each truck will determine its listing price. Meanwhile, the cost of a new truck can range from $85,000 and $160,000.
Do not forget that you can always lease or rent a truck. But doing so will cost you and your company thousands of dollars each month. The downside is that the cost each month goes toward vehicle use. (Instead of ownership of your truck.) Your new or used commercial truck will also need a trailer. The cost of a low-cost trailer hovers around $30,000. But a new, Apex-level trailer could set you back over $55,000. Find out more about How to Obtain your MC.
The Cost of Insurance
Say that you jump right in and buy a large commercial truck. Your next key step is to get insurance for the vehicle. This way, both your drivers and their equipment will have protection. There are two main types of insurance policies for commercial trucks. They are: liability insurance and auto insurance. You will begin operating your truck as a new driving authority. This means you will have to pay between $10,000 and $20,00 per truck. Otherwise, you will not have the ability to get the type of insurance that you need. Check out New DOT Authority Package.
Forming a Business Entity
Many new business owners in trucking form each trucking company as an LLC. It stands for limited liability company. Having an LLC can help you separate personal assets and business liabilities. As a result, you can experience big-time legal and tax advantages. Every state has its own unique LLC filing fee. The cost of the filing fee can range from $50 to $800. Find out more How To Pass Dot Drug Test.
Limit Your Registration & Startup Costs Through Our Services.
FMCSAregistration.com is here to help your new trucking company get off the ground. Sure, we have trucking packages at set prices. But we can provide custom service plans to any new transportation business. Each fee depends on the exact services that you're in need of. Plus, the state where you're forming your company also makes a difference. Please contact us now to receive first-rate registration services. We’ll keep our filing fees low to help your business startup succeed. Without question, our organization is the apex of trucking company solutions. Get more information Trucking Operating Packages.
We Provide Tons of Business Filing Options
Let’s now go over some of the business filing options that our company can provide. We can take care of all your LLC entity formation documents. Our affiliates can file those documents with the Secretary of State. Does your company need an Employer Identification Number (EIN)? If so, our affiliates can secure an EIN on your behalf through the IRS. More information FMCSA Hours of Service Suspended.
Our organization also specializes in providing MC and USDOT numbers. We’ll get these numbers registered with the FMCSA and DOT. Plus, we can take care of all your intrastate authority registration needs. Here is an example. Say that you're in Texas. We can provide you with a TXDOT Number. Plus, we also specialize in BOC-3 registration to secure process agents. Even UCR (Unified Carrier Registration) becomes simple thanks to our experts. As a separate service, we can also take care of your IFTA registration. There's no limit to the registration solutions that we provide for trucking companies. We encourage you to give us a call right now to get started.
Trucking Company Startup Costs
You've now read the common costs of getting a trucking company formed and registered. But there are some different trucking business expenses to keep in mind. Here are some examples. You must provide an insurance down payment for every truck. The cost of the down payment will range from $2,000 to $4,800. To learn more check the link below DOT Number in California.
A new trucking business will have to register with the US government IRP program. This refers to securing apportioned plates for every truck. The cost will range from $500 to $3,000. Every trucking business has to pay the Heavy Vehicle Use Tax. This tax costs $100 to $550 per truck. Some states, like New York and New Mexico, have state-specific taxes. Per truck, a state tax will cost a company about $500. Get more information Full Motor Carrier Authority.
The Ongoing Costs of Operating Your Trucking Business
Say that form a trucking company and receive authority through the FMCSA. This means that the government has given you every permit needed for operating. As a result, your trucking company can soon begin hauling freight. But wait! Do not get on the road today. Instead, it’s time to consider the ongoing costs of operating your business. Understanding these costs can help you learn to expect certain expenses. Because of this, you can become skilled at setting a budget for your trucking company. Check out New York Highway Use Tax Registration.
What Is a Fixed Cost?
A fixed cost is any expense that takes place in a consistent manner. For example, a truck payment each month counts as a fixed cost. An insurance payment that you must make each month is another example. On an annual basis, you'll need to pay for license and permit renewal. In most cases, the price of each fixed cost remains the same from month-to-month. This can make the budgeting process simple for many trucking professionals. To learn more check the link below MCS-150.
What Are Variable Costs?
Every variable cost features the opposite concept of a fixed cost. This means that a variable cost is not consistent. The price can change from one week or month to the next. Common variable costs include fuel costs, meals, lodging, and repairs or maintenance. But do not get scared about potential variable costs. You cannot make money in trucking without spending some on your variable costs. Compared to fixed costs, it is more difficult to expect certain variable costs. But say that you've started operating your trucking company for a few months. You will not have an easier time when it comes to estimating variable costs. More information USDOT Number Registration.
CPM: Cost Per Mile
What is CPM: cost per mile? It is the cost of operating related to every single mile that someone drives. Here is how to figure out your CPM with ease. All you must do is divide all costs by the number of driven miles. Say that you master how to perform this crucial calculation. You will discover the minimum freight rate that you can accept to book new loads. Here is a CPM statistic to keep in mind. In 2019, the average cost per mile within the US was $1.65. For additional information What Is IRP or Apportioned Registration.
What Is the Operating Ratio?
Are you unsure if you're operating at a loss or profit? If so, it’s time to calculate your operating ratio. All you've got to do is divide all expenses by revenues your company generated. Please contact us if you need help calculating your operating ratio. For additional information MC Number Insurance Requirements.
More Information About the Cost of Starting a Trucking Company
Again, the cost of forming a trucking company will vary based on many different factors. The beginning startup cost will range from about $6,000 to over $15,000. But this estimate does not include the act of buying any equipment. Instead, the estimate focuses on taking care of formation and registration documentation. This process, on average, will cost anywhere from $900 to $1,800. Then, you must pay for IRP (International Registration Plan) plates. The plates, per truck, can cost anywhere from $500 to over $3,000. In some states, like Kentucky and Oregon, you'll need to pay a state tax. The average cost of a state tax is about $500 for every truck in a fleet. Find out more about How to Prepare for Compliance DOT Audit, DOT Audit Checklist.
The average US truck driver earns around $0.40 cents per trucking mile. This comes out to a salary of about $60,000 per year. That is not a bad amount of money to make each year. After all, the median annual wage in the US hovers around $47,000. The key is to explore new ways to drive profit for your trucking company. This means you must focus on all operating dollars that you spend. Do you need more information about potential startup costs for a trucking company? If so, please give our organization a phone call. Additional information The Basics of Farm Exemptions.
What Is the Difference Between Fixed & Variable Costs?
There are two major types of costs that every trucking company must keep in mind. They are: fixed costs and variable costs. A fixed cost is a consistent charge that does not vary by much money over time. A common example is the price of a truck unit or the cost of maintenance. Insurance costs, taxes, and permits also count as fixed costs. Click here to discover FMCSA Registration.
Meanwhile, a variable cost can go up or down at any moment. Common variable expenses include fines, repair costs, and the price of fuel. About 60 to 70 percent of trucking operating costs come from variable costs. That is why you must pay close attention to variable pricing. Otherwise, your truck company will not have the ability to budget month-to-month. Learn more How To Request the DOT PIN Number.
Unified Carrier Registration (UCR) Filing
Your trucking company does not need to pay UCR fees through the FMCSA. Instead, our third-party business can take care of your UCR filing needs. Our UCR services apply to any type of trucking company or fleet. No matter how few or many vehicles you're operating, we can assist. Please check out the UCR page on our website. It features more information and details about UCR registration fees. We also encourage you to browse our site to learn about getting an MC number. Or, a USDOT number and any other type of FMCSA or DOT registration. Check it out The FMCSA 30.
Do Not Put Off Getting Trucking Insurance
It’s in your best insurance to secure insurance for your trucking business right away. Having quality truck insurance coverage matters. In fact, industry experts define it as the most crucial annual fixed cost. But there are unique factors for figuring out total trucking insurance costs. Find out more about IFTA Sticker Registration.
Trucking insurance companies will consider the age of your truck equipment. These companies will also analyze the types of commodities that you haul. Even the location of a truck makes a difference when it comes to cost. Insurers use criteria like this to place together an official insurance premium. The condition of your truck also makes a big difference. More information Top 3 DOT Violations.
Say that your truck is in good or excellent condition. The annual insurance cost could exceed $10,000 for every truck in a fleet. But the exact figure will vary based on the type of coverage that you have. The year and model of your truck also matters. So too, does the experience level of a driver. Here is a potential tip for reducing your insurance premiums. Consider using an FMCSA-registered electronic logging device. Having a device in your vehicle could help your company save money each month. Finding out more Get FMCSA Trucking Authority.
Questions About the Cost of Operating Trucking Companies? Call Us Now
Say you have questions about the costs involved in running your trucking company. Do not hesitate to pick up the phone and call our organization. Within minutes, our trucking experts can assess your information. Then, we can help you discover long-term, cost-effective solutions. As a result, you can find a way to deliver better profits to your business. Plus, our company can help you maintain full-scale compliance with the FMCSA. We look forward to helping your new trucking business reach new heights. For additional information DOT SAP Program.