There is no simple answer to how much starting a trucking company costs, as costs can vary from business to business and state to state. The expenses to start a trucking business can be influenced by the type of business you wish to start, including the freight you plan to haul, insurance coverage, and trucking permits you may need.
As a new trucking company owner, you can expect to invest somewhere between $12,000 and $20,000 to start a business with one or two trucks.
Costs of Starting a Trucking Business
If you are considering starting your own trucking company, you must wonder what initial costs you should expect. Once the first expenses are out of the way, you can begin to think about your ongoing costs. Before starting your trucking business, expect to encounter the following primary trucking company startup costs.
USDOT Number and Motor Carrier Number
Going under the premise that you already have a commercial driver’s license (CDL), which is necessary when running a trucking company, you will then need a USDOT number. USDOT, or United States Department of Transportation Numbers, represents a unique identifier for businesses that run commercial vehicles to transport cargo or passengers in interstate commerce.
On a similar note, a Motor Carrier number serves as an identifier for companies that haul loads in multiple states or transport commodities for hire on the interstate. Generally, you can get both of these numbers for $300 per operating authority.
As a new trucking business owner, you must register your business. While the costs of a business registration vary from state to state, on average, you can pay $500 to cover the business registration costs. Setting up your company as a Limited Liability Company (LLC) lets you separate your personal assets and business liabilities, providing various tax and legal advantages.
Truck and Trailer
One of the most vital trucking business startup expenses is the truck itself. The costs of commercial vehicles can vary considerably, based on whether you want to buy a new or used truck. A new truck generally costs between $80,000 to $150,000, while a used truck might cost anywhere from $15,000 to $100,000 based on age and size. Another alternative is renting or leasing a truck. This will only cost you a few thousand dollars monthly.
Moreover, you will want a trailer to attach to your truck, which can easily add another $30,000 to $50,000 to your expenses.
When it comes to commercial trucks, insurance coverage is vital to protect your equipment and drivers on the road. For starters, you will need two primary insurance policies: liability and auto insurance. As a new driving authority, you should expect to pay anywhere from $10,000 to $18,000 per truck.
Insurance coverage is one of the essential annual fixed costs and varies based on the age of your trucks, location, and commodities hauled. All these factors and more will be considered when putting together your commercial trucking insurance premium.
In addition to the expenses of forming and registering your trucking company, there are also other expenses you should consider:
- $100-$550: Heavy Vehicle Use Tax Obligations (per truck)
- $500-$3,000: IRP (apportioned plates per truck)
- $2,000-$4,800: Insurance Down Payment (per truck)
- $500: Additional State-Specific Tax Obligations (per truck)
What Are Some of the Ongoing Costs of Operating a Trucking Company?
If you have successfully started your trucking company and received your authority and all the permits you need to operate, now might be time to think about your operational costs so that you can set a budget for your business.
Fixed expenses are costs that occur on a regular basis, such as monthly insurance payments, monthly truck payments, or payroll. You will also have to pay permit and license renewals annually. However, these payments are typically the same every time, so budgeting for them is simple.
These are expenses that vary when you are operating your company. Variable costs include maintenance, repairs, lodging, meals, or fuel expenses. While such expenses are initially harder to anticipate, after running your business for a few months, you should be able to estimate your variable costs correctly.
Apart from the expenses already mentioned, it would be best to set aside around $5,000 for marketing purposes. That can include building your website, business cards, adverts, or setting up a social media presence.
Because starting a trucking business is hard work, you can get help from experts to assist with your trucking permitting and taxes, safety compliance, insurance, and financial services. Moreover, they can help you secure your DOT and MC numbers and establish your business entity while providing you with the necessary resources for a successful first year. That way, you get to focus on growing your business.