Starting Your Trucking Company
You have decided to start a trucking company. Congratulations! It is a great decision; American Trucking Association Estimates a need for about 50k additional trucking capacity this year and the shortage is going to expand to about 200k trucks in next ten years. The shortage will only expand as the freight is going to grow by a third in next decade. American economy is built on trucking industry and there is great opportunity for growth for new trucking companies. We have put together a comprehensive guide for you to start the trucking company the right way.
Create a business plan
Before starting the company. Create a business plan, the plan should include an estimate of investment needed to purchase or lease required equipment, how to source loads, how and where to hire drivers, where to operate your trucks, how to manage the equipment finance payments and fuel payments etc. etc. We will touch on each of the above items in the article below one by one. Better prepared you are, better are your chances of success.
Register your business
The first step after you have prepared your business plan is the register your business entity type with your secretary of state. There are many entity types to choose from and to choose a good name for your business. There are registration agents such as https://www.jjkeller.com/home, http://www.etruckpermits.com/ and https://www.etruckingsolution.com/ that can help you in selecting the business entities.Trucking is heavily regulated industry. It needs several licenses and permits and other requirements before you can operate a commercial truck on the road.
Driver’s License, Commercial Insurance
The most basic requirement for operating a trucking company is that all drivers of the trucking company should have a valid commercial driver license (CDL). Each state has different requirements for issuing a CDL, at a bare minimum, CDL aspirant needs from a trucking school, pass a written and driving exam, must be 21 years of age to drive truck across state lines and must be drug free. Next is obtaining commercial insurance, there are many components of insurance, however you must obtain minimum required coverage mandated by DOT to gain Motor Carriers Authority. It includes liability coverage, cargo coverage, property damage etc.
MC authority and DOT Number
MC authority and DOT Number are required for a trucking company carry commercial loads in the United States. The USDOT number is used to track your company’s safety record and compliance with regulations. The motor carrier (MC) number defines kind of loads your trucking company is authorized to carry. Federal Motor Carrier Safety Administration (FMCSA) issues these numbers after you complete a (MCS-150) report and Safety Certification Application.You will receive your MC and USDOT numbers after the application is filed, but your request for authority must still be reviewed by the FMCSA. That review includes a “mandated dispute period” in which your application is posted to the Federal Register for 10 business days. This period is to seek out public comment from anyone who might contest your application for authority.
Unified Carrier Registration
The UCR system verifies that the carrier has an active insurance coverage in each state the carrier aspires to operate. Carrier must register with the UCR with his MC and DOT numbers.
IRP Plates
Trucking companies are required to pay taxes to each US state and Canadian provinces based on the number of miles driven in each jurisdiction. This is done by the IRP system. Your truck which intend to operate in interstate commerce must get the IRP plates and pay the fees annually based on the number of miles driven in each jurisdiction.
IFTA Decal
Each state has different rates for fuel taxes and your company must pay fuel taxes per number of miles driven in each state, these taxes are filed quarterly. You need to get a fuel license called IFTA (International Fuel Tax Agreement) annually and it needs to be displayed on each side of your trucks.
BOC – 3 Form
One requirement to gain interstate operating authority is to register an BOC-3 form with the FMCSA. The form designates a attorney on your behalf in each state where your company operates to act as a legal “process agent.”. The process agent can receive legal complaints or documents on your behalf in each state and send it to you.For more information on the BOC-3 form, visit www.fmcsa.dot.gov.
Other Requirements
There are some specific requirements beside the above general requirements based on what type of cargo you plan to haul, what states you plan to drive or what equipment you choose to run. For better understanding and help with the specific requirement, we recommend that you seek help of a local permits or registration agents in your area. Once you have your fleet up and running, Sound Finance can further help you with business, by providing discount fuel cards, cash flow solutions, inexpensive insurance etc. We wish you all the luck.