If you’re considering starting a trucking company, 2024 may be perfect. The trucking business is a multi-billion dollar industry projected to grow by 10% in the coming years despite the likelihood of an economic recession in the United States.
This trend presents an opportunity for entrepreneurs to start a trucking company. But what does it take to start a prominent trucking business in 2024?
In this article, we will outline the basic steps necessary to create the new trucking business of your dreams.
Know Trucking Business Challenges
The trucking industry is vast. The American Trucking Association (ATA) estimates that trucking companies in the United States move about $1.5 trillion worth of cargo a year. That’s a big business and protected by intense competition.
The Transportation Research Board predicts that trucking companies will get even bigger in the next few years. The board expects that the United States and Canada will continue to see some increases in freight throughput. However, the Guardian predicts that the looming recession in the United States may cause a slowdown by 8-10%.
Trucking business owners face the following challenges:
- High capital investment. The cost of initial truck purchases and infrastructure maintenance is expensive, and that’s before you even start paying your operators and drivers.
- Technological changes. Information technology has changed almost every industry, and trucking is no exception. Companies must keep up with the latest trends in technology to stay competitive.
- Fuel prices. Trucking companies are just as sensitive to fuel prices as the rest of us, so they’re afraid of any sharp fluctuations in the market.
- Government regulations. States and the federal government have different rules for trucking companies, making it challenging to develop policies that comply with them.
- Driver shortage. According to the Bureau of Labor Statistics, there may be a shortage of as many as 41,000 truck drivers by 2026. Haulers need to attract more people to the industry, or they will struggle to grow.
Research the Market and Choose Your Niche
The trucking industry is vast, so narrowing your focus and deciding which area you want to specialize in is essential. For example, are you going to transport general freight? Perishable goods? Hazardous materials?
Or maybe you want to focus on the specialty market—trucking school, medical transportation, etc. It’s important to understand that many different trucking niches and specialties exist.
Here is what to consider when choosing your niche in the trucking industry:
- Location. Generally, larger cities have more customers than smaller towns. There are more people with specific needs, and they tend to travel more frequently. The American Journal of Transportation (AJOT) has recently discovered the top-five states for trucking business: Tennessee, Texas, Washington, Oklahoma, and Indiana.
- Customer Base. You will want to choose a niche market that has a high income and tends to have specific needs. For instance, a person who owns a manufacturing business will have very different transportation needs than a construction worker. If you want to get into medical transportation, aim for areas with many hospitals.
- Regulatory Environment. Your trucking business needs to meet all local and federal regulations. These regulations can change over time, and it’s better to be on top of them from the get-go.
- Competition: Your truck company will compete with other businesses on the market, which will be the primary driver of growth. So it is crucial to be able to differentiate yourself from other companies and to meet the needs of each target market.
Next, you begin to research the specific needs of your target market. Three main types of businesses are carrier companies, shippers, and brokers. Each one will have different needs and requirements, so you must understand their differences before you start.
Develop a Business Plan
After your market research, it’s time to develop a business plan. Your business plan should include long-term and short-term goals, a marketing strategy, and financial projections. To guide you, use a general freight trucking business plan. Remember to have an exit strategy if your business doesn’t take off as planned.
Get the Necessary Permits and Licenses
You must receive the required government permits and licenses before you can begin running your trucking business. The type of permit or license you need will depend on the freight you plan to transport. Ensure you know your chosen niche’s regulations to obtain the proper permits and licenses.
Choose the Right Trucks and Equipment
Another critical step in starting a successful trucking business is choosing the right trucks and equipment. You must ensure you have suitable vehicles for the type of freight you’ll be transporting and any specialized equipment required by law or by your customers. You also must provide your trucks are comfortable and equipped with all the latest safety features.
Hire Qualified Drivers
Hiring qualified drivers are one of the most important aspects of running a successful trucking business. Your drivers ensure that your freight arrives safely and on time, so they must be appropriately trained and have a clean driving record. However, finding qualified drivers can take time, so offer competitive salaries and benefits packages to attract top talent.
Keep Your Costs Low
One of the challenges for any business owner is keeping costs low. This is especially true in the trucking industry, where fuel costs can eat into profits quickly. One way to keep your costs down is by using fuel-efficient trucks and route planning software to help you plan fuel-efficient routes.
Invest in Good Software
Investing in good software is essential for running a successful trucking business. A sound transportation management system (TMS) can help you keep track of your shipments, plan routes, dispatch drivers, track fuel usage, invoicing, and more.
Many different TMS systems are available on the market, so do your research before choosing one. Consider your specific needs as a trucking company when selecting a TMS system. Aside from tracking and management, another critical aspect of modernizing your fleet involves adopting efficient solutions like digital invoicing for HVAC, which streamline billing and customer interactions, making operations seamless
Get Insured
Insurance is necessary for any business but is imperative in the trucking industry. Make sure you’re fully insured before you start operating; if something goes wrong, you don’t want to be left holding the bag financially.
Stay Up-to-date on Industry Changes
Finally, one of the most important things you can do to ensure your trucking business’s success is to stay up-to-date on industry changes. The trucking industry is constantly evolving, so you must stay abreast of new regulations, technologies, and trends so that you can adapt your business accordingly.
Implement an Effective Marketing Strategy
To succeed in the trucking business, you must have an effective marketing strategy. There are many ways to market your trucking business, such as online advertising, direct mailings, and attending trade shows. By getting your name out there, you will be able to attract new customers and grow your business.
Build a Strong Customer Base
The trucking business is only as successful as its customer base. Investing time and effort into building a solid customer base will help your business thrive in the long term.
First, start building your customer base by marketing your business to potential customers who may need your services. Then, provide outstanding customer service to keep them coming back for more. If you provide quality service, your customers will be loyal and recommend your business to others.
Expand Your Business
As your business grows, consider expanding into other areas or adding additional services. This will help you grow your business and stay ahead of the competition. When developing your business, ensure you still provide quality service, so your customers remain loyal.
Create a Strong Web Presence
In today’s day and age, all businesses must have a strong web presence. In particular, having a professional website optimized for search engines and easy for customers to use.
Your website should contain information about your company, services offered, contact information, and anything else potential customers would want to know. In addition, be sure to blog regularly and post on social media so customers can stay up-to-date on what’s going on with your company.
Follow These Tips and Position Yourself for Success
Creating a successful trucking business doesn’t have to be complicated or time-consuming. Following these simple tips, you can position yourself for success and build a thriving trucking business that will serve your customers well for years.