3 Things You Need To Know Before You Start a Transportation Company

You may have found this article because you are curious how to start a transportation company. To guide you in the right direction, here are 3 things you need to know before you start a transportation company.

There are many different ways people make money nowadays, some being new opportunities and some that have been around for generations. The Transportation Industry is one that has been around for ages as it is an integral part of the American economy. People and businesses need to transport goods and services for many reasons.

Every industry relies on trucking for delivery of materials to make the product and then to transport it to the marketplace. The importance is evident, but the details of this industry are not as easy to obtain. For this reason, I created this blog for you to learn 3 Things You Need to Know Before You Start a Transportation Company.

Just like any job, it is important for many people to understand the amount of effort and time it takes to start and continually put in in order to be successful. I wish there was a simple grading scale I could use to show you the difficulty level of starting a transportation company, but it is not so simple. There are many factors that go into this that I will discuss more in the next section: Profit Margins of Starting a Transportation Company.

As for the business aspect of this industry, entering the freight transport industry is relatively easy. There are no certifications or degrees needed to start a freight transport company although any business background will be helpful. You will need to have a business plan, legally establish your company, obtain a USDOT Number and Motor Carrier Operating Authority (MC Number), buy or lease equipment, select insurance, track income and expenses, find loads and lastly stay up to date with filing requirements.

This may be a lot to take in and you may be feeling a bit overwhelmed but trust me the hardest part is getting started.

Now that you know the difficulty level of starting a transportation company, it is time to see if all of this work is worth it financially. As I mentioned in the previous section, there are many factors that may increase the difficulty level. In this case, start-up costs may be the reason you are not able to enter the freight transport industry.

It costs money to start a company, pay registration and format documentation, buy insurance, buy a transport vehicle such as a truck, purchase IRP plates, buy gas, hire a driver potentially and more. The good news is that the start up costs are estimated to be around anywhere from $5,000 to $15,000 not including equipment such as trucks and are guaranteed to be paid off within the first year if everything goes according to plan.

The most difficult part financially are these initial costs you must save ahead of time because as your company starts to pick up, this is when your profit margins begin to make sense. An owner operator may take home around $2,000 to $5,000 weekly, while an investor can make a profit of $500 to $2000 per truck weekly.

You now have more information regarding the difficulty level and profit margins of starting a transportation company, the next question is how in demand is the transportation industry?

The first thing I need to mention are the four seasons of trucking that impact how busy the industry gets. From the start of the year, in January, it is considered a quiet month and continues until March. April to July are the “find me a truck season” as the industry starts to pick up. The industry peaks are August to October which then leads into the holiday season of November and December where the season starts to decline.

Despite the highs and lows of the Transportation Industry, there is always some demand for transport. “The overall outlook of the trucking industry is trending in an optimistic direction, and it has been for months despite the shortage of drivers,” Avi Geller, president of the transportation management services provider Maven Machines, told Transport Topics. According to the American Trucking Associations (ATA), the Transportation Industry is expected to grow more than 25 percent by 2030 to 20.6 billion tons— with revenues increasing 53.8 percent to $1.6 trillion.