How to Find Success in the Trucking Industry
A trucker’s job is most often grueling and thankless, but trucking is inarguably one of the most important industries in our modern economy. That is why so many truckers remain loyal to the field — and why so many trucking companies are extraordinarily profitable. Sales in shipping and freight are steadily increasing at a rate of about 7 percent per year, and as the economy heals, most experts predict the field could grow even more.
However, trucking is as competitive as it is lucrative, any many entrepreneurs enter the field utterly unprepared for the fierce rivalries and ruthless undercutting they immediately face. New and old truckers alike can find success in the trucking industry, if they are diligent, hardworking, and ready for the fight ahead.
Get Experience as a Driver
You might be able to start a shipping business without experience in the field, but you won’t be able to understand the industry as well without a history of driving on the open road. Truckers have a unique culture that grows from their odd always-moving lifestyle, and the only way you will be able to relate to your employees is by getting a trucking job and living in a truck yourself. Additionally, with experience moving freight around the country, you can honestly address your clients’ needs and desires with legitimate trucking solutions.
Draft a Business Plan
This step is the same across every industry: For your business to succeed, you must have a clear idea of where it’s headed. In your plan, you should consider such issues as:
- What type of accounts you will accept. While you should be open to any business that comes your way, you can’t feasibly cater to every type of shipping need.
- What kind of drivers you will contract. You can either privately own your drivers, taking them in as full employees, or you can subcontract drivers who own their own equipment but provide you less control.
File Trucking-Specific Paperwork
All new businesses have probable tons of paperwork to complete and file, but the trucking industry requires even more. The federal and state governments wield differing tax, licensing, and permit regulations for trucking companies, and you must complete everything to the letter to ensure the legality of your operation. Here are a few of the registrations you may need to obtain:
- Heavy Use Tax Form
- BOC-3 Filing
- Federal DOT Number and Motor Carrier Authority Number
- Commercial Drivers Licenses
- International Registration Plan Tag
- International Fuel Tax Agreement Decal
If you have decided to privately own your drivers — which can be a wise choice, as you have full control over your clients’ goods and your capital — you will need to procure the proper equipment to get your business out of the warehouse. Unfortunately, this means that your start-up and operating costs are going to be higher than if you opted for subcontractors, but ultimately, you will see more of the profits, which can balance it out.
Obviously, you need as many trucks of the proper size as your business plan stipulates, and the trucks should be outfitted with the necessary features to keep your freight safe. For example, if you expect to ship food, you probably should procure refrigerated trucks. Additionally, you may want to keep in mind that used trucks often operate the same as new trucks — but at a substantially lower purchase price.
Subcontractors take full responsibility for their vehicles, including purchasing, maintaining, and insuring them. However, when you own your fleet of trucks and employees, you are accountable for keeping your equipment and staff healthy and whole. When it comes to insurance, you shouldn’t skimp on coverage; freight trucks require quite a bit of upkeep, and when they malfunction, it can be disastrous and deadly. No matter what your trucks contain, you want your insurance plans to keep your drivers, your trucks, and your cargo perfectly safe.
This is often the hardest lesson for new trucking company owners to understand: The shipping industry is absolutely cutthroat, so you must be ready and willing to beat your competitors in every way. Clients are looking for the cheapest, fastest, and most secure trucking companies available, so you should work to make your company look desirable in these and other significant ways. Ultimately, you’ll find success when clients are clamoring for your service while you competitors’ trucks remain parked in the garage.