Monthly Archives: September 2023

a trucking manager looks out the window at a lot filled with semi-trucks - he knows how much does it cost to start a trucking company

How Much Does it Cost to Start a Trucking Company?

Trucking remains a vital industry in the modern world. Trucking companies transport over 72% of all goods across the United States, and that number is expected to increase in the coming decade. When done well, a trucking company can be a lucrative business venture that’s in high demand. In general, you should plan to invest $100,000 to $200,000 at a minimum to start a trucking company, and those costs can increase based on the size of your operation, the number of employees you intend to hire, and the number of trucks you wish to own. Rather than asking, “How much does it cost to start a trucking company?” and looking for a flat figure, a better strategy to understand these costs is to look at the various costs you will need to cover to launch and run a freight or tucking occupancy. At Advanced Commercial Capital, we work with trucking and freight companies of all sizes, and we understand the industry well. Here is a breakdown of the different costs of a trucking company that you would need to factor into your plans.

Investment Breakdown

Starting your own trucking company comes with a variety of costs. Whether you start with one truck or 10, there are specific costs that you have to tackle to launch your business. Here is a general breakdown of the things you will need and their initial investments:

• CDL – Your commercial driver’s license is a necessity, and these costs vary from state to state, as does the cost of taking the CDL training course. Plan several thousand dollars for this expense.

• Truck and Trailer – To start your own trucking company, you must purchase a truck and trailer. The age, size, and type will all impact the cost. This cost can be as low as $15,000 and as high as $150,000 for just the truck and an additional $30,000 to $50,000 for the trailer.

• Insurance – Commercial trucking insurance can be as much as $12,000 to $18,000 a year per truck.

• USDOT and Motor Carrier Numbers – To operate legally, you must have an MC and USDOT number. The total cost is $300 per operating authority

• Business Entity – For your protection, you will want to set up an official business entity, such as a Limited Liability Company or S-Corp. The cost for this varies by state but is usually less than $2,000 for a simple business structure.

• Electronic Logging Device – Finally, you’ll need to invest in an ELD system to ensure your drivers remain compliant with hours on duty regulations. There are only a handful of exceptions to ELD regulations, so plan to invest in one of these systems at the launch of your business. These can cost as much as $950 per year to operate.

Before you can launch your business, you will need to have all of these costs covered, and our financing options can help.

Operation and Overhead Costs

Once the business is up and running, there are additional operation and overhead costs you’ll need to account for as you work to bring in income. Advanced Commercial Capital can help you account for the following:

1. Driver Salaries

Unless you are going to be an owner/operator, you will need to hire drivers to drive your trucks. Expect to pay a salary and mileage of around $70,000 a year to attract and retain reliable drivers. You may also choose to pay mileage in addition to a base salary, and a standard of 40 cents per mile is common.

2. Fuel and Tolls

Fuel is another cost you must account for once you’re up and running. You should expect about 6 miles for every gallon of fuel in your semi-truck, and the actual cost of fuel will depend on the current prices at the pump. Similarly, you will need to invest in EZ Pass to cover tolls for your drivers.

3. Technology

Many trucking companies find technology is essential to their operations. Advanced mathematics systems can help you keep your trucks on the road more accurately, and automated routing and dispatch systems will help improve the efficiency of your business. All of these systems cost something to operate.

4. Business Overhead Costs

Finally, a trucking company is, at its heart, a business. This means you will have costs for marketing, keeping up an office, invoicing your clients, creating rate confirmation and freight contract documents, organizing notice of assignment documents, and tracking payments, similar to any business. It can cost around $5,000 to start and run your initial marketing campaigns, and you will also need to account for other office-based expenses. In trucking, these operational costs include dispatch, which many new companies outsource, so plan on dispatch fees of around 5 to 10% per load.

Navigating Regulatory and Compliance Fees

The trucking industry is quite heavily regulated due to the serious nature of accidents involving semi-trucks. Here are some of the compliance and regulatory costs you’ll have to cover:

• BOC-3 Form – If you’re doing interstate business, you will need to have a BOC-3 Form, which shows you can operate legally in your various states. This costs between $20 and $40.

• International Registration Plan Credentials – The International Registration Plan Credential is also required if you cross state lines. The IRP averages about $1,700 a year, but these plates can cost between $500 and $3,000 per truck.

• International Fuel Tax Agreement Decal – Yet another regulation required for crossing state lines, the IFTA costs about $10 a year.

• Heavy Highway Vehicle Use Tax – The HVUT is applied to all trucks weighing over 55,000 pounds. It runs between $100 and $550 a year. You will also need to pay business income taxes each year.

• Unified Carrier Registration – The UCR for up to two trucks is $69, but for three to five vehicles, it is $206. Larger trucking companies will need to spend even more.

Choosing the Right Financing Strategy

The costs to start a trucking company do vary from one to the next. The right financing strategy starts with the right finance company that understands the intricacies of running a trucking company. Advanced Commercial Capital works with trucking and freight companies, offering factoring, freight capital, and cash flow solutions tailored to the trucking industry. We help our clients finance their startup costs, avoid financial pitfalls, such as scams and double brokering, and create a financial plan that will work for the long term. Transportation financing is all we do, so we are well-positioned to help you launch your trucking company and keep it running through factoring or lines of credit that will keep the cash flow in play as you need it. To learn more about the costs of starting a trucking company, reach out to our team today.

An Asian male truck driver using his radio to communicate - using trucker lingo, trucker slang

A Complete Guide to Tucker Lingo and Radio Codes

The Origins of Trucker Slang

When you’re a truck driver communicating on the open road, you’re using radio frequencies that a lot of other people rely on at the same time. Because of that, the number one rule is to never use more airtime than you absolutely need. Out of this simple idea, an entire dictionary of trucker slang was born.

Trucker slang is a vocabulary developed by truckers on CB radios in the 1970s and 1980s. It saves time while still getting across important information about upcoming hazardous road conditions, a police presence, and other things that truckers need to be aware of while driving. Many phrases that are now common (like a person calling someone else’s spouse their “better half”) originated from what was essentially this new language that truckers slowly developed out of necessity.

10 Must-Know Trucker Terms for Beginners

While there are a seemingly endless number of examples of trucker slang out there, ten terms in particular are so common that it’s practically mandatory that you know them. Understanding what they mean (and critically, the context in which they’re used) is the key to having a successful, productive conversation while on the open road.

1. All Locked Up. This term is commonly used when one trucker warns those on the road behind him that an upcoming weight station is closed.

2. Alligator. Sometimes you’ll see this expression itself abbreviated as “gator.” It means that there are upcoming dangerous conditions on the road that truckers need to be mindful of. A piece of tire in the center of a highway could damage a truck’s hose or body, for example. Or, it could get kicked up and damage a nearby car. The term comes from the idea that you shouldn’t let it “bite you.”

3. Back It Down. This is something one trucker will say to another when they’re warning them to slow their speed. There may be a police officer coming up, or traffic may be getting hazardous for some reason.

4. Bear In the Bushes. This means that not only is there a police officer on the road up ahead, but he or she is also hiding just out of normal view. They’re probably trying to catch people who are speeding using the element of surprise.

5. “Do What?” When a trucker says something that doesn’t quite go out properly over the radio, another trucker might say “do what?” as a quick way to get them to repeat themselves.

6. Good Neighbor. If one trucker does something that you find helpful or that you approve of, you would show your appreciation by saying “thanks, good neighbor.”

7. Gumball Machine. This is yet another of the many examples of trucker slang relating to law enforcement. Here, one trucker is warning others that they see patrol car lights on the road ahead.

8. Home 20. A trucker would ask for your “Home 20” as a way to find out what your home location is.

9. In Your Back Pocket. A location is already “in your back pocket” if you have previously passed it on the road.

10. Roger. This is just another term for saying “yes,” “affirmative,” “okay,” or any other similar form of acknowledgment.

CB Radio Codes

Also commonly referred to as a “citizens band” radio, a CB radio is a type of tool that was commonly used by truckers to stay in communication with one another while on-the-road. Nowadays, wireless communication is practically ubiquitous – people have cell phones, messaging apps, industry-specific social networking tools, etc.

But for decades, when one trucker wanted to warn another about an impending road hazard, or to ask a question, or just to hold a conversation to stave off the boredom, they would use a CB radio in order to do it.
CB radio codes were developed as a type of shorthand to quickly convey an idea or a critical piece of information to others. Going beyond trucker slang like those examples outlined above, 10 codes are typically employed. This is a fast, efficient way to universally communicate ideas like:

1. 10-1. You would say this if you can’t hear another person you’re trying to communicate with.

2. 10-2. This means that you can hear other people clearly.

3. 10-3. This means that you want someone else to stop transmitting for whatever reason.

4. 10-4. This is a widely known expression that simply means “message received.”

5. 10-6. This means that you’re busy and that someone should hold on a moment before attempting to speak.

6. 10-9. You would use this 10 code when you want someone to repeat whatever it is that they just said.

7. 10-10. You would use this at the end of your transmission to let other people know that you’re done talking.

8. 10-17. You would preface a message with this, letting people know that whatever you’re about to say is urgent.

9. 10-20. You ask someone for their “20” if you are trying to find out what their exact location is.

10. 10-33. You would use this to let people know when there was emergency traffic at a station.

11. 10-45. You would say this if you wanted everyone within the broadcast range of your radio to report their status.

12. 10-100. This is the 10 code that means you’re taking a bathroom break.

Common Expressions

In addition to the CB 10 codes outlined above, there are a number of common expressions that you’re likely to hear on the radio. When talking about CB slang in particular, however, they take on a slightly different meaning than general trucker slang.

1. Ace. Someone would be referred to as “ace” if they are an important CB operator.

2. Ancient Mariner. A reference to classical literature, The Rime of the Ancient Mariner, this is used to describe someone who is an AM or FM user.

3. Beam. This is another way to refer to a directional antenna.

4. Big Mama. This term describes a 9-foot whip antenna.

5. Double Key. This phrase describes when two stations are talking at the same time.

6. Fox Charlie Charlie. This is another way to describe the FCC.

7. Fox Hunt. When the FCC is actively searching for illegal operators, this is called a Fox Hunt.

8. Haircut Palace. Someone would warn another driver about a bridge or overpass with a low clearance by calling it a “Haircut Palace.”

9. Twin Huskies. This is a term used to describe someone using dual antennas.

If you’d like to find out more information about trucker lingo and the types of radio codes that are commonly used on the open road today, or if you just have any additional questions that you’d like to go over with someone in a bit more detail, please don’t hesitate to contact the team at Advanced Commercial Capital today.