How to start trucking business

[turbowarp]

Hello,

First off, let me say that I am not a trucker, I am just an old bean counter, that went to work everyday. I did drive over 35 years ago for a couple of years, but that was a long time ago.

Anyway, I have come into some money and have bought each of my 3 brothers a truck and trailer. (Not new.) Their experience is from 2-10 years of driving experience, but always for others in someone elses trucks.

We want to drive in Texas only for now. My brothers each have drivers licenses, but what do we do after that. What do we need from Texas DOT? The trucks are insured. How do we find loads, or trips or whatever the terminology is? Do we incorporate or should each brother be his own company?

How does someone go about dispatching trucks? Can I hit the bricks and make sales calls to businesses to sell our trucking services or would I need to be a broker?

We are fortunate to not be in desperate times while we figure out how to be in the business, but I don't want my brothers to be sitting all day around the kitchen too much. (We do have some family business that requires our trucking services so we have a bare minimum of work.)

I know that I am asking for quick answers to questions that some have taken lifetimes to learn. But, if we get it right that is good, if we get it wrong, we may have some good trucks for sale next year.

[solo379]

Well, i guess Gman is going to answer your "tactical" questions, so i wouldn't bother!
But i do believe, that was a bad investment, on your part! :sad:
Hope to be wrong, and good luck! 8)

[classicxl]

yea i would say ask GMAN

[turbowarp]

I'm new here. Just who is this "GMAN" everyone is talking about.

Coulda, shoulda, woulda. We aren't worried about failing, we are worried about not having tried.

I have had personal successes in other business ventures and am taking the opportunity to try this with my brothers; even though we seem disorganized right now with the cart before the horse.

[classicxl]

just do a search of the post for any from GMAN then send him a PM

[GMAN]

Welcome to the forum, turbowarp. You are asking some of the right questions, but probably should have asked them before you started buying equipment. In any case, I will try to answer some of your questions.

Ideally, you work in the business and learn something about what you are doing and how things work. All business is basically the same, however there are some things unique this business which can cause you to lose your shirt.

If you plan on owning and running trucks you have 2 options. You can lease to a carrier or get your own motor carrier authority and do things the way you want, including finding your own freight. The first thing you will need is to have Motor Carrier Authority. If you plan on running only in Texas, you will need to have a Texas MC number. You will only be able to run intrastate with that number. In other words, you will only be able to pick up and deliver within the state of Texas. You may be able to earn a living only taking intrastate loads, but many loads originating in Texas go to Oklahoma and Louisiana. If you cross the state line, you will need Motor Carrier Authority from the Federal Government. Before authority will be given, whether it is for Texas only or interstate, you will need to have insurance. Since your brothers have at least 2 years experience, that should not be a problem for them, providing their MVR's look good. However, if you have not had at least 2 years of recent experience, then it may be more of a challenge for you to find insurance. To qualify for authority, you will need liability and cargo insurance. There are only a handful of insurance companies who will insure a motor carrier.

From your post, I assume that you plan on getting authority. Whether you incorporate or not is a decision you will need to make. If you and your brothers plan on actually being in business together, then incorporating may be the best option. At least you would have some sort of structure to keep things organized. I have owned several corporations and have one for my trucking business. I prefer a corporation rather than operating as a sole proprietorship. You could operate as an LLP or LLC, as well as a corporation. It basically depends on how you want to operate and how you want to structure your business.

You can go out and find your own shippers or use brokers. Most people start out with brokers. Some stay with them. There are a lot of brokers in Texas. You cannot legally broker freight without having broker authority. Broker authority is different than motor carrier authority. The only exemption is for agriculture. If you haul any other freight, you will need authority. You can find your own loads as long as you are a motor carrier and will haul them on your own trucks. Rates have been suppressed in most of Texas for some time now, so you need to be prepared. Since you are a "bean counter" you may want to sit down and look at some hard operating numbers. There are a lot of hidden expenses to operating as a motor carrier. There are a number of compliance issues you will need to adhere to avoid fines. OOIDA is a good resource. www.ooida.com. Owner Operator Independent Driver Association. They are the primary organization for small carriers, owner operators and drivers. Some of on this forum have had many years operating our own trucks. I and others run our own authority. There are more who lease to carriers. We will be glad to answer any of your questions. You may find some of them by doing a search.

[rank]

[quote="turbowarp"]Coulda, shoulda, woulda. We aren't worried about failing, we are worried about not having tried. quote]
I like that attitude.

1. Figure out your costs.
2. Look at the load boards and call brokers to see what the freight is paying.
3. Learn all the rules and regulations in all the states and provinces.

If that doesn't scare you away, you might be dumb enough to qualify. :wink:

From there you can decide whether you want to lease on with someone or run your own authority.

[GMAN]

There are several load boards where carriers can post their available trucks and find loads posted by brokers or shippers. Before most will allow you to subscribe, you will need to have motor carrier authority and insurance. None will book a load with you without first obtaining authority. There are carriers with whom you can lease your trucks, such as Landstar, Mercer, Jones and CRST Malone, who pay a percentage of what the load pays. All you will need is insurance for bob-tailing (without a trailer), except for Landstar who requires unladen liability. They are similar, but unladen is a little more expensive.


If you want to get your motor carrier authority, you should be prepared to spend from $5-8M per truck for liability and cargo insurance. That is assuming that everyone has a good MVR. Your base plates and permits should run around $2M per truck for 48 states. If you confine your business to only Texas, your insurance and registration fees may be less. There are changes to the Single State Registration which is scheduled to take place in 2007. We don't yet know what that is going to do to fees. You will need a registered agent for every state in which you do business. OOIDA will do this at no charge for members. There are services which will also do it, but charge a fee.

[turbowarp]

I certainly appreciate the responses I am getting.

Let me back up for a minute. Yes, we are just dumb old farm boys... we can wash our hands for an hour with soap and hot water and the dirt just won't come clean. We know what it means to put money into a business and not see return immediately, or in some cases ever.

We have hay, sod, nursery trees, dairy cows and some beef. So we do have our own need for trucks, although it just happens that we seem to have only owned ugly trucks. Except for the milk hauler the trucks often sit for months at a time.

We are updating our fleet and expanding into the commercial trucking business. We will keep our milk hauler on the farm for farm reasons.

The part about the authority is one of the questions I had with regards to keeping us as one business unit or each individual business units. Is there any advantage to one business unit or individual business units? With whatever business model we decide upon I will control the title of the vehicles one way or another.

Part of my problem is not being familiar with the trucking industry language so when I read over the regs and such I don't have a clue what it meant. Like authority, I don't think we have our own authority; or ever needed it in the past.

BTW, it's been a few years, because we have been in a drought for a while, but were we breaking the law carrying hay to Oklahoma and Louisiana?

Thanks for your help.

[classicxl]

see ask for GMAN and he will appear and answer all questions

[turbowarp]

see ask for GMAN and he will appear and answer all questions

All knowing and seeing, yes he is.

[classicxl]

the one mans word you can honestly trust to tell you the truth

[GMAN]

quote="turbowarp"]

see ask for GMAN and he will appear and answer all questions

All knowing and seeing, yes he is.[/quote]




Let me look into my crystal ball........ :wink:

OK, if you already have product that you are hauling, it seems that you only need loads to get you back to haul more of your own product. I have known of some farm boys who have done very well for themselves. It may make more sense for you to have one operating authority and each use the same MC number. I know of a guy who owns a truck and several family members also own trucks. They all operate under the same authority but operate autonomously. Each contributes a small percentage into a pool to pay for someone to do the paperwork and keep them legal. Each gets their own loads. Basically, it is like everyone is in business for themselves, but uses the same motor carrier number. The cleanest and easiest way to make it work would be for everyone to contribute a percentage to a pool and have someone do all the paperwork, and even help find loads. If everyone has their equipment in their own name, then it might be best to put a lease together and everyone lease their truck to the carrier. Everyone pays their own expenses and you could do the same with the insurance.

If you haul freight commercially, you need to have authority. There are some exemptions for agriculture products, but from what you have mentioned, I don't see that you would qualify.

[Bigmon]

(The part about the authority is one of the questions I had with regards to keeping us as one business unit or each individual business units. Is there any advantage to one business unit or individual business units? With whatever business model we decide upon I will control the title of the vehicles one way or another.)


The advantage of keeping each unit seperate is liability. If one truck kills someone in an accident and you get sued the other truck can still keep working.

The advantage of keeping them as one unit is your gross sales will be greater making it easier to get credit.

[Justruckin]

(The part about the authority is one of the questions I had with regards to keeping us as one business unit or each individual business units. Is there any advantage to one business unit or individual business units? With whatever business model we decide upon I will control the title of the vehicles one way or another.)


The advantage of keeping each unit seperate is liability. If one truck kills someone in an accident and you get sued the other truck can still keep working.

The advantage of keeping them as one unit is your gross sales will be greater making it easier to get credit.

And all of that will depend on how well you all work together. One slacker will make for one hell of a mess. My family, through the years, have had a business or two.

[GMAN]

It costs $300 to get your Federal authority. You will save some money by doing it all under one name and authority. You can have one set of books if you operate under one name. If everyone runs separately, then each has to set up their own books. From an economics standpoint, I would think it makes more sense for everyone to share one company. If you have an accident they will come after the driver, owner of the equipment, carrier and insurance company. They will go after the deepest pockets. You could do a lease with them if you plan on keeping title yourself anyway. If you all are going to be sharing business contacts and everything else, it seems to me as though a single corporation and authority is probably the way I would likely go.

[LOAD IT]

Turbo,

I'm not sure what type of trailers you will be running, but in Texas with intrastate authority and a DOT number you can run agricultural and exempt products without having Federal authority. Produce, cotton, hay, drilling mud are just a few exempt commodities that I know of in Texas that can keep you busy. Also talk to other farmers about trucking for them. Also, lease your trucks and trailers to your corporation and keep a copy of the lease with each unit that will be titled to you. Good Luck trucking and welcome to the board.

[BanditsCousin]

I agree with Gman. Find other landscape commodities that need hauling to/from nurseries and rake in the cash. use your competition to your advantage