How To Start a Trucking Company

I Want To Get My Authority

For years, we had people say, “I Want To Get My Authority. Can you help?”

What they are really asking is, “Can You Help Me Start My Trucking Company?”

We have developed a system to take people at all levels of knowledge and experience through the process, and help create a plan for starting, running, and growing a trucking company.

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423-641-0833

The Process

Educate

We start with building a strong foundation of knowledge on what is required for YOUR specific needs.

From business structure, cash flow, compliance, risk assessment, and timing, our goal is to make sure you start with a core knowledge of what is required.

 

listen

Most advice we observe given to people wanting to start a trucking company is provided with no knowledge of the person’s operation.

What state, equipment type, type of cargo, and operating radius are critical.

 

Build Plan

Now we start to build a road map for creating a successful trucking company for you.

Starting a trucking business will consume a considerable part of your life. Do not risk everything by not being prepared.

Implement

Coming up with the plan is the easy part.

Implementation takes hard work. Now is the time you have to get off your butt and do something.

Waiting for perfect is never as smart as making progress.

VLocity did all the paperwork for me to get my authority.  And by them handling all the compliance, IFTA, etc., I have been able to concentrate on building my fleet.

The entire team is top notch.

Jerry Seibert

Owner, Seibert Brothers Trucking LLC

Best company hands down. Great customer service . They went up and beyond to assist me in obtaining insurance for my semi and they handled my mc,dot, ifta and permits.

David McCoy

Owner, McCoys Express LLC

I can’t say enough good things about VLocity Group keep me legal and on top of my business even when I lose site of what needs to be done they are there watching my 6 all time.

Love them like family and that’s hard to find now a days in this business.

Zachary Hedges

Owner, Wasted Youth LLC

LET’S GO!

If you’re not a risk taker, you should get the hell out of business.

Ray Kroc

Founder, McDonald's

lET'S GET sTARTED

The first step in the process is getting a basic understanding of the pieces that go into starting a trucking company.

It does not matter if you want to do everything yourself or are looking a complete package.  You need a strong foundation. 

 

1. Business Structure

The first step is to select and establish the business structure that fits for you.  There are many “Experts” on social media that will give you advice on this without knowing a single thing about you and your business.

Talk to experts.  If you do not have a trucking tax specialist, schedule a call to talk to someone from our tax team – free!

2. US DOT/MC Filing

These filings are done with the FMCSA.  The DOT & MC are filed simultaneously.

It will take a minimum of 21 days form when you file, and your authority CAN go active.

Important

  • File as a “Common Carrier”.  Not Freight Forwarder, Broker, or anything else.  At the end of the application, you should only be asked to pay $300.  If asked to pay more than $300 – STOP – save what you have done and call us. We can review the filing with you. 

423-641-0833

  • Be careful when selecting cargo classifications.  Over 30% of carriers make mistakes in this area.  This impacts you in a few ways:

    1. Some classifications required additional insurance (and that ALWAYS cost more money).

    2. Some classifications are higher risk.  This can increase your insurance premiums, or in some cases eliminate you from a trustworthy insurance company because they do not insure companies with this classification.

Not sure of the correct classification?

Schedule A Call and we will guide you through it.  

Experience Matters

If you are seeking to learn how to start your trucking company yourself, or want someone to do everything for you, working with experts can save you time, money, and frustration.

At the VLocity Group, we have been drivers (over a million accident free miles), started a trucking company (sold company with over 80+ drivers in 2016), & currently have over 500 active compliance clients.

New Authorities Processed

3. Shop For Insurance

Insurance is expensive.

What makes it even more frustrating is that many people selling trucking insurance have no business working in this specialized market.  The number of mistakes is high, and the cost of those mistakes is passed  is on to carriers.

When shopping for insurance, shop for the agent/agency first. 

As a new carrier, you have limited options on the number of companies that will write insurance policies in your state.

If there are 3 companies that will write insurance in your state (and one of them will always be Progressive), then why would you need quotes from 5 different agents?

What Impacts Insurance Rates

Accidents and tickets always have the biggest impact on insurance rates.  This is common sense.

Other factors are:

Credit Rating – depending on the insurance company that will impact your risk factoring with the underwriter.  Other impacts are the amount of down payment and the interest rate of financing.

– State & Zip Code – (in this order) – The reasons states are becoming more and more of an impact is how the states tort laws are structured.  With million insurance policies, trucking companies are a target for attorneys.  Then, like automobile insurance, some areas have higher rates of fraud and theft. This impacts trucking companies at a higher rate.

Cargo – Some classes of cargo present a higher risk.  When you stop and think about it, something like seafood is far more sensitive to temperature fluctuation than beef.  So it makes sense that seafood has a higher claim rate.  Then think about products that are targeted for theft. Clothing, alcohol, consumer electronics – many of these products will be excluded from insurance policies (always check your policy after binding).  The higher the risk, the higher the premium.

– Physical Damage – First, ALWAYS have physical damage.  If you are in an accident and there is a diesel spill, it is your physical damage that covers the cost of the hazmat clean-up.  We lived in a area that seemed like there was a weekly accident on the interstate with a semi.  A creek went between the East and West lanes that feed into the Tennesse river.  In one accident, less than 100 gallons of diesel were spilled into the river, resulting in over a $30k clean up bill.

Physical damage also covers the tow and other items related to the vehicle when there is an accident.

– Experience of Driver – If you are looking at a CDL vehicle, 2 years is the minimum experience insurance companies are searching for.  There are options for less experience, but it can be more expensive.

4. UCR, BOC-3, and other filings

BOC-3  must be in place BEFORE your authority goes active.  The BOC-3 places a process agent in each state that can accept legal filings on your behalf.  We charge $35 for a BOC-3 and it is a permanent – 1 time fee.  There is no need to get an annual BOC-3 service.  Call 423-641-0833 or email BOC-3 with your DOT # and we will file this for you.

UCR – The UCR is an annual filing that is typically due by January 1st.  The fee is to pay for state DOT systems and training.

Filing is easy and can be done at www.UCR.ORG.

We also have a video on how to do the filing if you need help.    How to file your UCR

 

Get Expert Advice

FREE!

Every week, we talk to dozens of people just starting out and wanting to start a trucking company.

The second step in our process is to LISTEN.  We have a series of questions to help us learn about your NEEDS, so we can help you build a ROAD MAP towards success.

Schedule your FREE CALL below.

Average Free Weekly Calls

5. Cash Flow - Important

I labeled this important because in the 30+ free consultation calls I have in a week (schedule a free callHERE), at least 50% of the people I talk to are unaware that they will not get paid immediately when a load is delivered.

45 days from delivery to payment is normal.

Many carriers turn to factoring, or accounts receivable financing, because they can not wait that long for their money.  

6. Driver Files

Meeting Your DOT Recordkeeping Requirements

Yes, the FMCSA/DOT has a LOT of requirements for record-keeping,

Some will tell you that these records are safety measures.  What they are is a record of your safety and compliance.

It is your responsibility to document compliance with safety regulations established by the Federal Motor Carrier Safety Administration (FMCSA).

You are responsible for maintaining these records.  Due to the sensitivity of the records, the FMCSA even has guidelines on securing the records (shameless plug – that is why we recommend using our secure, online driver file system).

You must also retain these records—in some cases, in secure locations—for varying lengths of time depending on the regulation, lest you face violations, fines even downgraded safety ratings. All of which could ultimately lead to the loss of your business.

 

Driver Qualification Files

These must be kept throughout a driver’s employment, then for three years thereafter, and includes (among other documents):

  • Annual List of Violations
  • Annual State Agency Inquiry
  • Annual Driving Record Review
  • Medical Examiner’s Certificate
  • Safety Performance Evaluation Certificate (if applicable)

At VLocity Group, we can process your driver file for you and have a monthly service that helps maintain driver files.   We ensure it is 100% ready for your new entrant audit.

We also have a free driver file you can download if you want to process this on your own.

Drug Testing - for CDL Vehicles

If you are driving a vehicle with a GVWR of 26,001 lbs or more, you are a CDL class vehicle, and all drivers are required to participate in a random drug & alcohol program.

This does not matter if you are the owner & the driver, you still must participate.

There are three key areas (we cover this in our free call):

1. Pre-employment Drug Test – Before a driver can perform safety sensitive duties (that would be driving), the driver must pass a pre-employment drug test.

2. Drug & Alcohol Clearinghouse – Begining Jan 6, 2020, all drug & alcohol violations must be reported to the Clearinghouse.

And all carriers must verify that a driver has not been reported into the Clearinghouse. Or if they have, that they have started/completed a proper return to duty program

3. Random Testing Program – After passing the pre-employment drug test, a drive must be enrolled in a random testing program.

Drug testing is considered one of the “Deadly Sins” when it comes to your new entrant audit.  Failure to meet these guidelines will result in the DOT putting the carrier out of service for 30 days.

Vlocity Group has served me well for about a year now, providing business setup and maintenance, factoring, and advice on the office side of my Hotshot business.

Bill and Lauren know the trucking industry from first hand experience and know the ins and outs of different states regulations/laws to keep my business legal and running smoothly. I would highly recommend them.

Professionalism, Quality, Value

Randy Roof

Owner, Roof Brothers Transport LLC

7. Plate (IRP) & IFTA - For CDL

You can’t apply for IRP/IFTA until after you have an active authority.

If you are Interstate and have a GVWR (Gross Vehicle Weight) of 26.001 or more, you need to do this.

IRP – Plates – Apportioned Tags – Whatever you call it, this is a special registration that you must have if you are running across state lines.

While all state IRP offices are required to follow the rules set out in the agreement between all states & providences, we are talking state government.  The process from state to state only has a similarity.

IFTA – Fuel Tax – International Fuel Tax Agreement – While IRP is a program to ensure truck registration fees are shared among states based on where a carrier runs.  IFTA ensures fuel tax is distributed the same way.

IFTA is one of the most misunderstood processes for carriers, and we will not attempt to explain it here.  In short, the agreement is in place to ensure that the fuel tax paid at the pump is distributed to the states based on the miles you run in each state.

8. State Permits

There are 4 states that require additional permits:

Even if you did not run miles in a state, you hold a permit in, you are required to file a Zero Mile return.

1. NY – 18k+ GVWR – If you run in NY you will be required to file quarterly reports with the miles you run in the state and pay an additional fee.  Temporary permits for NY run about $70 and take a day to get. NY HUT accounts are free, and the sticker costs $1.50 and is issued every 2-3 years.

2. KY – 60k+ GVWR – The KYU is free, but running into KY without a KYU account isn’t.  If caught, there is a $1,000 fine, and the truck can’t move until it is paid.

3. NM – NM Weight Distance Permit – The permit costs $10 per year per truck, but you can get temporary permits at the port of entry.

4. OR – Oregon doesn’t participate in IFTA.  Yes, I know, ridiculous.  So you have to get an OR fuel account.  To make matters worse, they require a $2,000 bond for this privilege.  That costs about $200 per year if you go through a bonding agency.  On top of that, you are required to make monthly filings for the first 1-2 years.

Unless you are going to OR more than 15 times in a year, just get temp permits.  It is cheaper that way.

Also, make sure you get the temporary BEFORE entering the state.

Experience Matters

After selling our company, we did what many entrepreneurs do in our position – we became Fix It Specialists.

And that led to DOT Audits – we are talking DOT Officer with badge & gun sitting in a carriers office for 3 days – Audit.

We learned most carriers ended up in an audit because the things they did or didn’t do BEFORE they hauled their first load.

Schedule a Free Call, and we will make sure you know what is required for you to be compliant, so you can pass your new entrant audit.

DOT Audits Preformed

9. ELD - Electronic Logging Device

In Dec 2018, the ELD Mandiate went into effect, requiring most over the road carriers with a GVWR, greater than 10k lbs, to use an ELD.

If you are unfamiliar with the Hour of Services (HOS) rules, you can learn more about them here.

Special Note: Give yourself plenty of time and order you ELD as soon as possible.  The chip shortages have not ignored the ELD manufactures.

10. Getting Ready to Roll

You will be required to decal your truck on both sides and keep a permit book with specific documents in the trucks, and current, at all times.

Decaling Your Truck

Labeling Your Truck – Drive down the road and you will observe people with many numbers on the side of the truck.  Some numbers haven’t been used in over 10 years.

What is required:

1. Company name as listed with the FMCSA.

2. US DOT 1234567 (You must have the “US DOT” before you DOT #).

3. Truck number on front of your truck (this is not an FMCSA requirement, but most states require it).

If you go into Colorado, you will want to have the last 8 of your VIN – VIN 4E123F87.

Seriously, that is it.

Permit Book

2. Permit Book – there are documents that you are required to carry in you truck at all times.  Keeping a permit books helps you stay organized.

Start with a 1/4″ to 1/2″ binder with some clear plastic inserts.

Collecting the following documents and keep them in your book.

  • Operating Authority.
  • IFTA License (CDL Level).
  • Accord Certificate of Insurance.
  • Cab Card or Registration and Trailer Registration.
  • DOT Annual Inspection that encompasses the last 18 months.
  • State Permits
  • Copy TWIC Card (if you have one).
  • ELD instructions for Driver, Law Enforcement, and Tech Problems.
  • 10 days worth of paper logs.
  • Mechanics Certification for Annual Inspections and Brake Repairs.