Many industries rely on the trucking industry to transport goods and raw materials from one place to another in the United States. These have presented a business opportunity for many trucking companies. But they need to obtain MC Authority and other permits to operate interstate.
The trucking business is lucrative once it starts running because of its high demand. However, the cost of starting a trucking business is intensive. The capital is expensive, with multiple operational costs associated with your business model.
Starting a trucking business also requires many costs related to trucking specifically and the ones incurred through the Federal Motor Carrier Safety Administration. In this blog, Global Multi Services will break down the cost of starting a trucking business.
Trucking Related Cost
Trucking-specific costs are paramount and assertive when starting a trucking business. It gives you independence and step into more management roles when compared to only collecting income from driving. Trucking costs are one of the largest expenses categories unique to the trucking industry. And the first costs you should be concerned with when establishing your trucking business.
According to trucking reports, one mile costs approximately $1.38 for a semi-truck, which is incredibly high for someone just getting into the business. But it can be lower depending on the type of trucking niche you plan to venture in.
The Cost For Trucking Equipment
The trucking industry is incredibly capital intensive because safety is paramount, and you need quality equipment to operate safely. Having the trucks, proper coverage, and other equipment is necessary to carry out business. And the cost of your trucking equipment is dependent on your market niche. Two options are involved when purchasing trucking equipment:
- Purchase trucks and hire truck drivers to drive them.
- Hire drivers that must provide their trucks.
Although the first option is often lucrative, it requires a lot of money to purchase all the equipment.
Truck Maintenance Cost
In addition to purchasing trucks and other equipment, you will also need regular preventive maintenance. These indicate issues from the trucks and keep them in good working condition to protect drivers, freight, and other road users.
Truck parts that need proper maintenance are brakes, alternator, wheel, batteries, airlines, and others. Taking care of your trucks avoids future expenses. But they are costs you need to consider when running your trucking business.
The Cost For MC Authority
MC Authority is one of the legal requirements mandatory to operate your trucking business in the United States. Motor Carrier Authority is a license issued to trucking companies by the Federal Motor Carrier Safety Administration, allowing them to transport freight on public roads.
Trucking companies also need to file paperwork to stay compliant with the trucking industry. These include applications for other permits, licenses, and fees. It also prevents them from paying hefty fines and penalties.
The Bottom Line
As you can see, establishing and running a trucking business is not a cheap endeavor. It also requires many equipment, high operating and maintenance costs to keep it running successfully. Therefore, do thorough research and prepare well before venturing into the business.