Costs to Start a Trucking Company

USDOT Number and Motor Carrier
Number

A United States Department of Transportation (USDOT) Number serves as a unique identifier for companies that operate commercial vehicles to transport passengers or cargo in interstate commerce. Similarly, a Motor Carrier (MC) Number identifies carriers who transport regulated commodities for hire in interstate commercial — or companies that haul loads in multiple states.

You can get both your USDOT Number and MC Number for $300 per operating authority, according to the Federal Motor Carrier Safety Administration (FMCSA).

Truck and Trailer

One of your most crucial trucking company startup costs is
the truck itself. The cost of commercial vehicles can vary dramatically, depending on whether you buy them new or used. For example, a used truck can cost anywhere from $15,000 to $100,000 based on its size and age, while a new truck typically costs between $80,000 and $150,000.

You could also consider renting or leasing a truck, though this option will cost you thousands of dollars per month that only go toward vehicle use, not ownership.

You’ll also need a trailer to attach to your commercial truck, which can add another $30,000 to $50,000 to your costs.

Commercial Driver’s License

If you don’t already have a commercial driver’s license (CDL), you’ll need to get one if you plan to drive a commercial vehicle — a necessity when running a trucking company.

There is no universal CDL cost, as these fees vary from state to state. For example, a CDL in Texas costs $97. You will also be required to take a CDL training course to qualify for your license, which costs significantly more than the license itself. In Texas, these classes can cost up to $4,500.

Insurance

With large commercial trucks comes the need for insurance to ensure that your equipment and drivers are protected on the road. You’ll need two primary insurance policies for your trucks — auto insurance and liability insurance. As a new driving authority, you can expect to pay anywhere from $12,000 to $18,000 per truck for this insurance.

Business Entity

Setting up your trucking company as a Limited Liability Company (LLC) allows you to keep your business liabilities and personal assets separate, giving you numerous tax and legal advantages. The filing fee for an LLC may cost you between $50 and $800, depending on your state.

Fixed Costs

Fixed costs are expenses that consistently occur, such as monthly truck payments, monthly insurance payments, and bi-weekly payroll. Annually, you will need to pay permit or license renewals. These payments are generally the same every pay term so budgeting for these expenses is usually simple.

Cost Per Mile (CPM)

Your Cost Per Mile is the cost of operating for every mile you drive. It’s found by dividing your costs by the number of miles you drive. Mastering this calculation lets you know a minimum freight rate to accept when booking loads. As a frame of reference, the American Trucking Research Institute (ATRI) reported the average cost per mile in 2019 was $1.65.

Variable Costs

Variable costs are expenses that vary when operating your trucking company. It includes costs of fuel, maintenance and repairs, meals, and lodging. After all, you can’t make money in the trucking industry without spending some too! Variable costs are harder to anticipate when compared to fixed costs. After operating a few months, you should be able to estimate your variable costs.

Operating Ratio

Your operating ratio determines whether you’re operating at a profit or loss. It’s calculated by dividing your expenses by your revenues.