Starting a Trucking Business: Costs and Essentials

The trucking industry plays a vital role in the American economy, accounting for 6% of all full-time jobs in the country. In 2017, the American trucking industry generated revenue that surpassed that of 150 countries. If you're considering embarking on this entrepreneurial journey, here's a breakdown of the costs involved in starting a trucking business in the USA, with a focus on the ELD mandate, Tail light, and ELD mandate dashcam.

Registration

Cost: Up to $1,590 (one-time)
The first step in establishing a trucking business is to incorporate a company and obtain the necessary permits to legally transport goods within the country. Registration starts at the state level, and it's crucial to check name availability with the Department of State. Once the name is approved, you can officially register your company.
TAX ID Number

Cost: $79 (one-time)
A TAX ID number is essential for opening a business bank account and fulfilling tax obligations. It's essentially your company's registration at the federal level, and even non-U.S. residents can apply for it online.
MC Number and DOT Number

Cost: Variable
After completing registrations and acquiring permits, the next step is to purchase trucks and trailers. Whether you opt for new or used vehicles, costs can vary widely. New trucks can start at around $113,000, while used ones are more affordable. However, when buying used trucks, it's advisable to choose those less than five years old with fewer than 600,000 miles.
Heavy Vehicle Use Tax

Cost: $100 - $550 (per year)
Trucks weighing over 55,000 pounds are subject to this tax, and trucking companies must file an annual Heavy Highway Vehicle Use Tax Return and pay the applicable tax for their fleet.
Insurance

Cost: $9,000 - $12,000 (per year)
Insurance is a crucial expense and should cover three key areas:
Physical damage: Coverage matching the truck's value.
Cargo: Recommended coverage of $10,000 or more, depending on the cargo's value.
Liability: Covers damage to third parties. Combined insurance for these aspects typically costs between $9,000 and $12,000 per truck per year.
IRP Plates Registration and IFTA

Cost: $1,500 - $2,000 (per year)
IRP plates are required for interstate operation, listing all 48 states in the continental U.S. IFTA decals are included, renewed yearly as long as fuel taxes are paid.
ELD, Tail Light, and Dash Cams

Cost: Around $950 (per year)
These technological requirements are essential for a trucking business. The ELD (Electronic Logging Device) is mandatory for compliance with regulations, aiding in tracking driver hours and identifying violations. Tail Light provides tracking for your trailers, and dash cams help maintain a video record for potential insurance cost reductions. ELDs cost around $350 per year, Tail Light has an annual cost of $250, and Dash Cams add another $350 per year.
Hiring Drivers

Cost: Average of $59,925
Hiring experienced drivers is vital for the success and growth of your trucking business. A CDL-licensed driver with the necessary technical knowledge is a valuable asset, earning an average annual salary of $59,925. However, payments vary based on factors like trip distance, frequency, and haul type. Thoroughly check the driver's background, including Compliance Safety Accountability records and conduct random drug tests as required by law.
Running the Business
Running a trucking company involves both fixed and variable expenses. Fixed expenses, such as insurance and permits, have been covered. Variable costs can fluctuate based on your business's output and operations. Some examples include:

Fuel: Costs vary depending on mileage and fuel efficiency.
Factoring Fees: Around 3% commission for getting paid more quickly.
Tolls: Variable costs based on travel routes.
Scales: Used to bypass weigh stations.
Permits: Additional permits for specific states.
Dispatch Fees: Flat rates per load.
Hotels: Accommodation for drivers on long hauls.
Maintenance and Repairs: Keep the vehicle in good condition, with an average annual cost of around $16,000.
Summary
In summary, the cost of starting an owner-operator trucking company in the United States typically ranges between $100,000 to $200,000. For larger fleets with additional drivers, expenses increase proportionally at an average of $59,925 per driver. Keep in mind that the nature of your business, location, distance, and operational area can significantly impact these costs. To mitigate unexpected expenses, maintaining a financial reserve is essential. Starting and running a trucking business is a significant endeavor, and careful planning and financial management are key to success. Keep on trucking!