Starting a hauling business: steps, costs and which rig to start with

Step 1: pick the rig and the market

Everything else follows from this choice: the license, the insurance, the customers and how the work pays. Look at what freight moves near you, what you know how to haul, and what you can afford to buy and keep running.

Lower-cost rigs get you started sooner; specialized rigs pay more per load but take more money, skill and customers to keep busy. Compare trailers in hauling trailers.

Step 2: get the right license

A single truck rated 26,001 lb or more needs a Class B CDL Source; a combination rated 26,001 lb or more, towing a trailer rated over 10,000 lb, needs Class A. Source Add endorsements for tanks (N), hazmat (H) or both (X). Once you or your drivers need a CDL, the business also needs a DOT drug and alcohol testing program. Source

Step 3: register with FMCSA

1. Form the business (LLC or other entity) and get an EIN, so contracts and insurance are in the company's name.
2. Get a USDOT number and, to haul for hire across state lines, operating authority (an MC number). FMCSA's registration filing fee is $300. Source
3. File a BOC-3 naming process agents in each state, usually through a blanket agent service.
4. Register for UCR each year, priced by fleet size.
5. Set up IRP and IFTA if your vehicles qualify for apportioned plates and fuel tax reporting.
6. File Form 2290 for any vehicle with a taxable gross weight of 55,000 lb or more. Source

Your authority becomes active only after your insurer files proof of coverage with FMCSA, so line up insurance before you expect to haul.

Step 4: insurance

For-hire carriers of non-hazardous property in trucks of 10,001 lb or more need at least $750,000 in public liability Source, and oil and many hazardous materials need $1,000,000. Source Brokers and shippers usually also require cargo insurance at set limits, and you will want physical damage coverage on financed equipment. New authorities pay the most in their first year, so get quotes before you buy the truck; the premium can decide which rig makes sense.

Choosing an insurance agent

Use an agent who writes trucking policies every day, not a general agent doing you a favor. Ask which insurers they place new authorities with, what each policy excludes, how cargo coverage handles your type of freight, whether the policy names the drivers and radius you will actually run, and how quickly they can send certificates to brokers. A cheap policy that a broker won't accept, or that excludes the freight you haul, costs more than it saves.

Step 5: equipment

Buy for the freight you will actually haul. A truck that is cheap to buy but always in the shop costs more than one that runs. Check the ratings that decide your license and payload, the trailer's condition and the maintenance records. Keep a budget for tires, brakes and repairs from the first month.

Step 6: customers and pricing

Load boards are where most new authorities find their first freight; DAT, for example, listed carrier plans from $59 a month when we checked. Source Brokers will check your authority, insurance and safety record before booking you, and some won't work with very new authorities. Price every load from your own cost per mile, which you can work out with the trucking cost per mile calculator. Local trades price by the hour, ton or load instead; see bulk hauling.

How long until a new authority gets steady loads?

Expect the first months to be the hardest. Some brokers won't book a carrier until its authority has been active for a set time, and shippers want a record of on-time deliveries before they hand over regular freight. Insurance is at its most expensive, and you are still learning which lanes pay. Carriers that get through it usually do three things: they take loads that build a record even at modest rates, they keep empty miles low, and they ask every good customer for the next load. A clean first audit and a few months of reliable deliveries open many more doors.

Local or over the road?

Local hauling, such as dump, water, scrap, hay and final-mile box truck work, keeps you home most nights and often qualifies for the 150 air-mile short-haul exception, but it pays by the hour or load and depends on a few local customers. Over-the-road freight reaches far more brokers and shippers and pays by the mile, but means nights away, more fuel and more empty miles to manage. Many new owners pick based on family and home life first, then the rig that fits it, and that is a sound order.

Step 7: cash flow

Brokers and shippers often pay 30 days or more after delivery, while fuel, insurance and payments come due every week. That gap sinks more new hauling businesses than bad rates. Keep cash for at least the first couple of months, invoice the day you deliver, and consider factoring if slow pay is the problem. See new authority factoring.

Step 8: safety and compliance systems

FMCSA audits new carriers in their first months, so set up the records before the first load, not after. You will need a driver qualification file for every driver, including yourself; maintenance and inspection records for each truck and trailer; hours-of-service records, on an ELD unless you qualify for an exception; and, for CDL operations, enrollment in a drug and alcohol testing program, which most small carriers do through a testing consortium. Every commercial vehicle also needs a periodic inspection at least once a year, with proof on the vehicle. Source A folder per truck and per driver, kept current, makes the audit routine.

Your first 90 days

1. Weeks 1 to 2: authority active, insurance on file, carrier packets sent to brokers, ELD and accounting set up.
2. Weeks 3 to 6: first loads; track every mile, gallon and dollar so you learn your real cost per mile.
3. Weeks 7 to 10: drop the lanes and brokers that don't pay well or on time; ask good customers for repeat freight.
4. Weeks 11 to 13: review the numbers: revenue per mile, empty miles, days paid after delivery, and cash left. Adjust before the next quarter.

Bookkeeping and the business side

Open a separate business bank account from day one, keep every receipt, and use simple bookkeeping software or a bookkeeper who knows trucking. You will owe fuel tax reports if you run under IFTA, the heavy vehicle use tax for trucks of 55,000 lb or more, estimated income taxes and, with employees, payroll taxes. A trucking accountant usually costs less than the mistakes they prevent. Set aside a fixed share of every payment for taxes and repairs so neither surprises you.

Hauling business ideas by budget

With the smallest budget, local hauling with a pickup and trailer, or a 26 ft box truck on broker freight, gets you working while you learn. A hotshot rig opens regional work for equipment, parts and oilfield freight. A dually and wedge opens car hauling. With more capital and a Class A CDL, a tractor with a van, reefer or flatbed opens the largest freight markets. Specialized rigs, tankers, hoppers and livestock trailers, pay best per load but need the most money, endorsements and customer relationships. Many successful carriers start small, learn the business and add trucks once the first one is consistently profitable.

Starting a car hauling business with a dually

A one-ton dually with a three-car wedge or gooseneck is the common entry into car hauling. A few things decide whether it works:

• License: a dually and a trailer rated 26,001 lb or more combined, with the trailer over 10,000 lb, needs a Class A CDL. Source
• Payload: Texas Pride's 50 ft three-car wedge, for example, carries 13,820 lb on a 21,000 lb GVWR. Source That is three sedans but not three full-size pickups.
• Securement: every vehicle needs at least two tiedowns, front and rear. Source
• Freight: auto transport boards such as Central Dispatch, with plans from $139.95 a month Source, and Super Dispatch, which offers a free carrier board Source, are where most new car haulers start.

Wedge or stinger?

A dually and wedge costs far less to buy and insure, works local and regional dealer and auction freight, and can be learned faster. A tractor and 7 to 10 car stinger earns more per trip but needs a Class A tractor, much more capital and insurance, and loading skill. Many owners start with a wedge and move up once they have customers. GearLoads no longer dispatches car haulers, so this path is for readers weighing it; see car hauling companies and how much car haulers make.

Leasing on instead of starting your own authority

If the paperwork, insurance and freight-finding feel like too much for day one, leasing your truck to a carrier is a real option. The carrier provides authority and freight, and usually liability insurance, for a share of revenue. Federal truth-in-leasing rules require the lease in writing with pay, chargebacks and escrow spelled out. Source Many owners lease on for a year, learn the work, then start their own authority.

Start-up costs, built up

Only the $300 filing fee is a fixed government number here; everything else is an assumption to show the shape. The operating cash line is the one people cut and regret.

Mistakes new hauling businesses make

• Buying the truck before getting insurance quotes.
• Pricing loads from what others charge instead of their own cost per mile.
• Running without operating cash and missing a payment while waiting on brokers.
• Choosing a specialty rig with no customers lined up near home.
• Ignoring hours-of-service limits; local operators may qualify for the 150 air-mile short-haul exception, but only if they meet its conditions. Source

For the whole picture of trades and rigs, read hauling, explained by rig and line haul trucking. Once your authority is active, our desk can keep the truck loaded; see dispatch for owner-operators, how truck dispatch works or the GearLoads home page. This guide is general information, not legal or tax advice.