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Commercial Trucking Company Tips on Running a Successful One

12/14/2021 16:11

In general terms, logistics (and especially commercial trucking) play an important role in most economies by providing goods for consumption and services for production. In fact, it’s true for most countries, including the United States.

If there aren't continuous streams of capital flowing into our economies, then they'll simply come to a halt. It was because they were able to adapt quickly and keep their trucks moving that most truckers weren't laid off when the coronavirus hit.

1. Find and Target the Right Market or Niche

In order for your commercial trucking company to be successful, finding the right market or niches within a certain geographical region is crucial. In particular, making decent profits with a dry van is particularly difficult for most markets, simply because they are so competitive from larger carriers and other owner-operator trucks who want to take advantage of lower rates by offering smaller loads.

That's why, as a basic guide, when you are about to start a new trucking company, you need to focus on markets that the large carriers avoid. In other words, consider hauling specialized loads. And that brings us to the second point of why looking for the right market is very important right from the get-go.

Take note that the market you choose will determine the vehicles and equipment you buy or lease. It will of course affect the rates you charge, and the freight lanes you can service.

Here are how fleets are divided based on the operating categories and load types:

- Package

- General freight

- Household goods

- Tank trucks

- Heavy hauling

- Building Materials

- Motorized vehicles

- Petroleum products

- Bulk

- Refrigerated solids

- Agricultural commodities

On average, machinery, electronic and motorized vehicles make up about 27 percent of goods shipped by truck drivers in America. The most common thing trucks haul is machinery, followed by electronics and motorized vehicles. Additionally, mixed freight includes commodities such as food and restaurant supplies.

In most cases, choosing to focus your trucking business on some more niche loads, for example, hauling fresh produce and meat in reefers, or delivering some special materials can provide you with advantages, namely less competition, year-round work, resistance to recessions, and flexibility the large fleet operators usually don't have.

However, different markets and locations have all kinds of different landscapes, so always make sure to start with research to find what's relevant for where you are going to operate.

2. Make Sure to Start with a Concrete Business Plan

Truck driving has become one of the best ways to earn money during this time of economic uncertainty. Many people are now turning to it as an alternative to working at a traditional job. However, before you jump right in, you should know what you’re getting yourself into. Here we share some tips on how to get started as an independent truck driver.

Take note that 91% of trucking companies are rather small, running with six or fewer trucks in their fleet. It simply means the guys and gals like you that are running small trucking companies actually make the biggest impact on the trucking and logistics industry.

But before you rush to buy a fleet of used trucks and get out on the open road, make sure to do some research and planning, to get a broader view of the industry and develop a basic trucking business plan

This business plan for starting a trucking company should begin with market research and result in a clear, data-driven strategy, with step-by-step goals that answer all the basic questions, such as:

1. What is the type of vehicle(s) and equipment you need to purchase or lease including the license plates?

2. What are the types of loads and freights you will work with and where should you find them?

3. Where will your fleet be based and who you should hire to drive for you?

4. What tariffs are applicable and how are you going to quote, invoice, and charge your customers and freight brokers? Are there insurance payments or variable costs involved?

5. Who are your main competitors and what are their strengths and weaknesses?

6. Who are your ideal customers and what can you offer them?

7. Who are your secondary clients and how can you diversify?

A business plan is your roadmap on how to start and run a successful trucking company. Now, it's likely that you may update or change it later down the road, as your trucking business grows, but you need to build the foundation to start with and get back to if something goes wrong.

3. Registering Your Trucking Company & Getting All the Required Permits is a Priority

Starting a trucking business should start with registering your company and obtaining the necessary business licenses and permits. That's the rule in the transportation industry.

Whether it is for equipment purchase, vehicle maintenance, truck payments, the insurance company, or insurance premiums, it should be managed. 

There are more than 150,000 filing jurisdictions across the USA, all with independent requirements. Depending on your service and your state, a different number of licenses and permits may apply to your business. Based on that, you may require some or all of the following, to run a trucking company:

International Registration Plan (IRP) credentials and International Fuel Tax Agreement (IFTA) decal

Running a commercial trucking business as a properly structured corporation or Limited Liability Company (LLC) allows you to separate between your personal assets and business liabilities, and mitigate some risks of unexpected losses. In addition to that, incorporating can get you several legal, tax, and business advantages.

4. Know the Right Equipment You Should Buy or Lease

The proper equipment and the right vehicle for the job can make all the difference between your running a trucking business towards success or failure.

When selecting equipment for starting a trucking company, consider the following items:

- Can the vehicle accommodate the needs of your cargo? For instance, if you are transporting perishable items, you might consider a refrigerated compartment.

- Is buying or leasing equipment a better option for your new business?

- Can you and should you seek some business funding You can settle an insurance coverage plan before actually purchasing the trucks and gear, but it's important to know at least the type of equipment you want to calculate the associated operating costs for it.

5. Establish and Run an Efficient and Well-Running Back Office

Starting a commercial trucking company goes far beyond being ready to haul loads.

Having an efficient back office is essential for building well-organized trucking business operations, running like a well-oiled machine that keeps moving, makes good money, and wins customers in the long run. It gets critical when you start hiring drivers that you need to dispatch in real-time. That's where running a trucking company's daily operations can become quite challenging as you grow.

Outsource your back office to dispatchers and brokers, but it can get pricey, and you should select them very meticulously because a dispatcher can make or break your trucking business.

Alternatively, you can do it yourself at least at the beginning, and run your trucking company, literally out of the cab of your truck.

Just a few years ago, to do that, you needed to have a laptop, a portable internet router or access to the wi-fi internet connection, and a printer. You also needed a complex accounting system installed on your computer to run your business.

Thankfully, those days are long gone, and today you don't need much more than your smartphone and simple fleet management and GPS-tracking software trucking dispatch mobile app that helps hundreds of small business owners save time and money on daily operations streamline communication with teammates, suppliers, and partners, all while keeping a finger on the pulse, and overseeing the whole business performance, from an all-in-one business-management app.

Everything you need to effectively run your commercial trucking company operations right from the start and develop your business under one roof.

Quick and simple dispatching and scheduling to assign routes and plan deliveries, provide relevant information such as time, address, and special instructions. Send notifications and reminders, get notified when drivers acknowledge or reject a shift, check in late, or when they complete their tasks.

Mobile time tracking with accurate time tracking allows your employees to clock in and out directly from their smartphones. Whenever employee clocks in and out, at a designated place, a real-time timestamp and GPS location are tagged.

Real-time reports from the field to streamline reporting from field to office with real-time digital reports to be submitted on the go, such as truck repair requests, vehicle inspections, and more.

Efficient team communication tool for logistical and operational communication, important updates, announcements, real-time group and private chats with push notifications, and more.

Simple task management to allocate one-time tasks to your deskless teams and include built-in reminders for your team to execute and automatically receive updates in real-time on task completion. Examples of one-time tasks include license renewal and yearly vehicle inspection.

Compliance & safety protocols through ‘read and sign' forms and instant access to important safety information and resources, such as safety protocols, ongoing safety training, and real-time safety reporting.

Effortless remote training for new hires quickly and efficiently onboard your drivers and get them up to speed and create a structured onboarding experience read and sign forms, quizzes, videos, PDFs, and more.

6. Be Pro-Active Looking for Loads and Orders

When you are starting a commercial trucking company, you'll have to find loads and freight to transport. If you're new to the trucking industry, online load boards can help you find freight so you can start hauling. You can try free load boards or pay a monthly subscription for others.

Another option to start a trucking business would be to start networking and building relationships with potential customers through marketing and networking efforts. Contact local shippers directly and meet prospective customers where they do business.

Once you have a solid customer base, you can build on those relationships. In some cases, you can start hauling directly for your customers and establish your own lanes which creates a regular, stable income.

7. Make Sure You have Full Compliance with Regulations And Safety Protocols

Running a trucking business means staying on top of time-sensitive filing requirements like business license, ranging from IFTA's quarterly tax returns to multi-year renewals for CDLs.

Truckers face several compliance regulations by federal, state, and local authorities – from noise emissions, fees for registration and insurance, receipts and bills, and many more. Additionally, there are also environmental issues like anti-idling, greenhouse gas, and other emission reduction regulations imposed at state and local levels. The compliance costs are easily exceeding their benefits, this is a great challenge faced by small truck business owners.

Complying with federal laws so drivers don't work overtime or experience burnout is a must for HR departments, but that's easier said than done sometimes.

The U.S. Department of Transportation clearly states that drivers must rest for 30 minutes during an eight-hour shift, and limit driving time to 11 hours per day with a cap of 14 hours – this brings the weekly total to 80. However, it does state that drivers can work over 70 hours if they've rested for at least 34 hours in a row.

August of 2019, the Federal Motor Carrier Safety Administration (FMCSA), under the United States Department of Transportation, announced changes to its hours-of-service rules that will greatly increase the flexibility of truck drivers while they're on duty. And this has been a long time coming for many truck drivers.

Speaking of further compliance, a DOT consortium can help you out! A consortium will often manage the DOT random testing programs of several employers, including those of owner-operators who are not permitted to manage random testing themselves. Consortiums that manage owner-operator programs play a very unique service agent role.

8. Tracking Your Income and Expenses is a Must

When you're asking yourself how to run a successful commercial trucking company, don't forget that as a business owner, you should always take care of the money first. A key factor in running a trucking business is having a robust and transparent way to track income and expenses.

Regarding transportation companies, this is especially important in terms of logistics, because payments are often received weeks or months after delivery, and it can be difficult to track expenditures while you're on the road.

To help avoid common startup obstacles, keep the following best practices in mind:

Subscribe to bookkeeping software or hire an accountant. Online accounting software like Xero can help you track your income and expenses even while you're away from home. They can also help you find an accountant or bookkeeper to help keep you on track.

Understand when and how you'll be paid for deliveries. Shipping contracts often provide for payment 30 to 90 days after delivery. Such delays can be managed, but only if you are aware of them ahead of time.

Maintain thorough records of business expenses. Keep a file of invoices, receipts, and check stubs so you can prove your expenses if necessary.

Keep your personal and business finances separate. Maintain separate bank accounts for business and personal use.

Running a successful trucking company also implies that you must ensure a regular flow of cash in the initial phase of your business. Your trucking company will take many months before it starts earning regularly. Do not forget that clients generally take two to three months for making the final payment and clearing all dues.

So, despite getting the customers and delivering your services, you may get the payments after many months have passed. This means that you must have enough cash on hand to meet the daily expenses of your company and to pay the salaries of your staff. You will need cash to meet expenses like repairs and fuel. You can get immediate funds to have working capital from a factoring company. Many such companies offer working capital to small businesses.

9. Take Tune to Hire The Best Professional Truck Driver & Maintain Them

One of the most important elements of starting a commercial trucking company is thinking about how and where you can hire the best commercial driver and make sure they stay. Be the best fleet owner out there.

A clear mention of business hours, the business structure is important. As well as the clarity on who will be the fleet operator matters.

Well, you can also hire carriers that already have a system in place and with a low driver turnover rate. Usually they have the most experienced drivers.

The most successful trucking companies offer some of the same benefits to their drivers, such as:

- Daily activities programs for improving health

- Bonuses to accident-free drivers

- Recognition bonuses for signing on and staying

- Health care insurance

- Flexible scheduling

- Gift cards (restaurants, retail, etc.)

- Holiday, birthday, or anniversary cards

- Driver appreciation events

10. Maximize the News and Follow The 2021 Trucking Industry Trends And Next 5 Year Predictions

Look for a hot commercial trucking business overview and expectations from an industry expert, and make sure to stay up to date with the latest trucking industry trends.

You can also check some trends regarding commercial vehicles to get a marketing strategy ahead.

Bottom Line On How To Run a Successful Trucking Company

The trucking industry is one of the backbones, holding the US and European economies. It is the single largest form of transportation for materials and sources on land, so it's only natural this industry is never out of demand. Despite the operating costs, they still thrive!

Having a great vehicle fleet and the best team is half the battle, the other is having efficient back-office operations to keep everything under control. Ready to have a successful trucking business? 

If you want to connect with the network of commercial truckers, our DOT Consortium Labworks USA established relationships with them throughout the years. Let’s connect.

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