Yes, it is a good idea to start a trucking business in 2023. Starting a trucking company in 2023 can be very profitable for many reasons. According to reports, a massive 80% of all cargo in the U.S. is transported by the trucking industry and for every single truck today on the highway, there are an estimated 10 to 20 full truck loads expecting to be moved.
Also, as the economy keeps recovering from the setbacks of the pandemic of recent years, the demand for trucks to move freight is expected to keep growing. Starting a trucking company in modern America is a guarantee of making money. Note that for every full truckload that is moved, you can see income coming in almost immediately.
In the trucking industry, there’s not much time for waiting in-between. The worth of each truckload is determined by the type of trailer your truck is pulling and you are paid for your services by the mile. Anyone looking to venture into the trucking business should understand that this business has its pros and cons.
You need to come up with a business plan that specifies important things like marketing strategies, fleet management, prices, operational activities, and so on. Aside from that, the business plan will also have to pay precise attention to the financial and human resources required to start the company.
It should be noted that the trucking industry has high competition levels and entrepreneurs are advised to try to keep up if they want to get a foothold in the industry. Also, ensure you understand the legal requirements of starting a trucking business including licenses and permits.
Is a Trucking Business Profitable?
Yes. The trucking business is profitable. Just like every other industry, the trucking industry had to deal with the setbacks caused by the pandemic of recent years.
However, the industry bounced back with momentum in 2023. Experts note that the industry is setting a course for sustained growth in the coming years, especially since the global freight trucking market is projected to increase to $5.5 trillion in 2027 from $4.2 trillion in 2020, a compound annual growth rate of 4%.
Reports have it that increased consumer demand has made it very challenging for companies to keep up with shipping schedules and to acquire adequate equipment to handle shipping volume. This growing need for more trucks has created a viable opportunity and market for willing entrepreneurs.
Have in mind that the average income per truck is around $4,000 and $10,000 per week. An owner-operator who owns a company and manages operations will take home around $2,000 to $5,000 a week. Meanwhile, an investor can earn a profit of $500 to $2,000 per truck per week.
In this line of business, the more freight you can deliver per unit of time while keeping your costs down, the more money you can make. However, achieving success in the trucking business can still prove challenging. Issues such as driver shortages, fuel costs, and high contract rates have been potential roadblocks to success.
Starting and managing a profitable trucking company requires extensive planning. Niche selection, cost-cutting strategies, pricing, and cash-flow planning all play a very factual role in becoming and maintaining a successful trucking business.
Pros and Cons of Owning a Trucking Business
Just as was noted above, there are pros and cons associated with starting a trucking business. It is always recommended that you consciously weigh both before going on to make a decision.
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You Are your own boss
When you establish a trucking business, you will be responsible for making all your decisions. This gives you a whole lot of freedom (and responsibility), especially over your time, money, and equipment. As an independent owner of a trucking business with your authority, you won’t have to answer to anyone aside from yourself, the FMCSA, and your insurance company. You get to choose your pay and also what you would do with your truck.
The trucking industry remains of the most lucrative fields in the United States. Trucks are used to move almost everything in bulk, and these trucks are always in high demand.
Note that for every full truckload that is moved, you can see income coming in almost immediately. In the trucking industry, there’s not much wait time. Also note that the rising freight demand, coupled with the current driver shortage, guarantees that you can make a lot of money.
Control Your Own Income
Being the owner of your business lets you go after better loads and negotiate better rates with brokers if you aren’t satisfied with the rates you are charging per load. As the owner of your trucking business, you are not limited to a fixed per-mile rate or revenue share like you are as a company driver or leased to a company.
Rather, you are only confined by the category of loads you choose to accept. While it can be pretty slow in the beginning and you might feel like you have to agree to carry everything, note that once you have established yourself as a motor carrier, you can effortlessly compete for better loads and better rates, and also turn down the less paying ones.
Starting a Trucking Business is Affordable
Just as was noted above, you do not necessarily need to be the owner of the truck to start a trucking business, you only need to be the owner of the trucking business. Note that you can start a new trucking company with another person’s truck.
This is referred to as an owner-operator and you can register the owner-operator’s truck under your authority. Have in mind that a trucking business can be started with around $1200. As a trucking company owner who does not own their trucks, you would only need a basic computer with load board solutions and a TMS (Transportation Management Software) to start.
You Can Work From Home
You also do not need very large facilities to start and manage a trucking business. A good number of people who venture into this line of business do so from the comforts of their homes. As long as your truck is steadily moving freight daily, you won’t even have to bother seeing it unless you intend to carry out maintenance or check the equipment.
Also, know that you can monitor the activity of your truck from your home computer by GPS location software. You can also choose to allow a freight broker to dispatch your truck while you deal with other issues.
Managing The Business Side Of Your Trucking Business
As the owner of your trucking business, you have to do a whole lot more than a company driver or an owner-operator leased to a trucking company. You have to wear the hat of the company’s CEO, dispatcher, maintenance manager, safety and compliance officer, sales and billing supervisor, and human resources director. Also note that obtaining an authority will warrant a lot of new work, and you will also have to invest long hours in the business.
Keeping Up With All Your Paperwork
In addition, you will also need to manage all your bills, receipts, invoices, and compliance documents yourself. Note that larger trucking companies have a department specifically tasked with taking and retaining records for their drivers, but as the owner of your trucking business, you will be tasked with driving, maintaining your truck, and managing your records.
This can be very tasking and it is easy to get buried under it all. You can leverage the many trucking management software in the market today to scan, track, and organize your vital documents and receipts.
Note that the registration process of a trucking business can be very daunting. To legally start and run this business, you will first have to obtain licenses and permits. If you plan to start as an owner-operator, you will need a commercial driver’s license.
Other common licenses and permits you will be expected to obtain are the DOT and Motor carrier number, which are required by the government to monitor your business’s safety record and the actions you take in your business. Note that the motor carrier number is necessary to note the types of goods and commodities you plan to haul.
Finding Consistent Loads And Industry Competition
New trucking businesses always have to deal with finding consistent loads at very good rates. In addition, shippers and brokers are wary of working with new MC numbers and they prefer companies with notable track records. You should also expect to compete with several other companies for loads with top rates. To attain success in this line of business, you will need to actively and steadily seek new loads and negotiate your rates.
Indeed, it can be very challenging to start and run a trucking business; however, it can be lucrative if you manage your operation well. Managing your operation entails always seeking ways to increase your revenue and lower your costs.
Note that this is key to maintaining a strong trucking company profit margin and growing a very successful business. You can leverage the many trucking management software in the market today to scan, track, and organize your documents and receipts.