Along with insurance, equipment purchases or leases, and other required filings and registrations, the process can be lengthy and complicated. Services like the Apex Startup Program can help you start your own trucking company easily. We handle the tedious parts for you.
We do everything from collecting all the necessary information, and assisting with entity formation in your home state to completing and filing the appropriate registration applications. Once your trucking company has active authority we send you a Record Book with all the paperwork organized and ready to go.
Load boards can help you create and establish relationships with a variety of brokers and shippers. Once you have a solid customer base, you can build on those relationships. In some cases you can start hauling directly for your customers and establish your own lanes which creates a regular, stable income. Checking credit on your customers before you haul a load is one of the best habits to form. Doing so routinely helps you assess brokers and shippers.
Running credit checks will help you feel confident that your customers will pay regularly. Subscriptions to credit services are available but can be expensive. To maximize your efforts, try to choose loads that pay more per mile, not necessarily faster.
When you factor with Apex Capital , you get unlimited, free credit checks , which can help you make the best decisions for your trucking company. A profit and loss statement or bookkeeping software are two of the most effective ways to track insurance payments, truck maintenance and repairs, truck and trailer finance payments, fuel, office expenses, salaries, and other expenses. You can even track tax deductions, which can help you save money.
Knowing how much it costs to run your trucking company is important to ensure that your business is profitable. Setting a minimum amount for your cost per mile will help so you never get undercharged or come up short on a load. Getting a fuel card for trucking companies can help you control and manage your fuel purchases and save money at the pump. The factory's owner tells the operations manager what the factory needs to have picked up, when it has to be picked up, where it's going, and when the shipment must be delivered to its destination.
The operations manager tells the factory's owner what the trucking business will charge to do that shipment for the factory. Once the price is set and sometimes other money has to be added in, like special fees if the shipment must be delivered very quickly and a team of truck drivers is needed to get it there on time, or extra money to cover higher fuel prices , the operations manager has the dispatcher enter data on the computer so the necessary paperwork is generated for the driver.
Then the dispatcher looks at his load board to see what driver is available closest to the factory needing the pickup, and either sends a signal by satellite or calls the driver to tell him to pick up the load. A trucking business may specialize in what it hauls. Some trucking businesses move people's households, tanks and weapons for the military or heavy equipment like huge bulldozers and cranes. Some have armed guards aboard their trucks while taking irreplaceable art and sculptures to museums.
To a layman being an owner operator or trucking fleet owner seems like a dream job. To those of us in the industry we know it to be otherwise: long hard hours, a constant hunt for freight or drivers or both! Maximizing equipment utilization and controlling costs to drive as many loaded miles as possible is the key to making good money in freight transportation.
The logistics and financial obligations of operating a trucking business can be overwhelmingly difficult if not managed well. But, trucking is an essential service that has outlasted economic crises, global pandemics, changing technology and environmental regulations. It will remain an essential service for decades to come and will continue to provide opportunities for growth. For those willing to work hard, work smart and are dedicated to operating at high efficiency, trucking is a huge industry with big rewards at stake.
Unless you know exactly how much it costs to run your trucking business, you will never be able to set a rate-per-mile to charge customers that will create profit. To identify the true cost to deliver a load you must consider both variable costs running costs and fixed costs overhead. This is where accurate bookkeeping and financial reporting becomes critical. Ensure you record every dollar spent on large ticket items, over-the-road expenses and even small office supply purchases. Every dollar amount, large or small adds to the overall picture.
A common problem most trucking companies share is the keeping of messy books, inability to understand some key business metrics and not entering the right measurements into their accounting systems.
It is well advised for all trucking companies to produce monthly financial statements that accurately record all transactional details and to analyze these reports regularly to best control finances. With this level of detail, determining your cost-per-mile is an easy exercise with the use of an online cost-per-mile calculator. Be aware that competition is high and trucking profit margins are exceedingly low compared to most other industries. Be careful not to pad this rate with an excessive profit margin that will price you out of the market.
The trucking industry is highly competitive and cyclical creating wild roller coaster rates and profit margins. To remain competitive, keep profit margins slim and regularly measure your per-mile rate against your competition. Once you have compared rates, you may have to focus on decreasing costs or commit to driving more loaded miles to improve profit margins and remain competitive. Established fleets, growing companies and new start-ups all compete for the same load.
Your best strategy is to be relentless and use every tactic available to book freight. To help with this endeavor, we have compiled a list of 7 ways to find more loads. Changing any one of the three key actions listed above will have a ripple effect throughout your company that may or may not result in the desired outcome.
Trucking companies are constantly trying to adjust to improve returns and remain competitive. Without a defined approach, knowing what to do and when to do it is very much a guessing game.
Will the savings in fuel costs out way the increased monthly carrying costs of the new equipment? Or, what if you take on that new customer; will adding more trucks and drivers to fulfil the contract return a profit, or create losses? It is the careful balancing of the three key actions that will best position your company to generate the highest return on investment.
By adjusting the calculator with the accounting details of adding new equipment, taking on a new customer or any other change, the calculator will predict the likely outcome as a positive or negative result towards improved profits. Using the calculator to predict results on paper is much less risky than committing to change in real time and waiting to discover the final impact.
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