Business Overview

Trucking businesses operate in one of a few ways. The first type of trucking business hires a workforce of independent contractors to move goods for other companies. This cuts down on the startup costs of running the business. However, it also hurts the company’s ability to retain loyal truckers since they do not work for the trucking company.

Another way to structure this type of business is to hire the truckers directly. When employees are hired as privately-owned employees, each driver is an employee working directly for the trucking company. This model benefits the truckers because it gives them a steady source of pay and some level of certainty about their job. It also benefits the trucking company because it often results in higher profits, happier, and more loyal employees. However, it’s more costly for the trucking company to maintain in the beginning because it adds to the overhead.

Who is this business right for?

This business is perfect for an entrepreneur who is knowledgeable about the shipping industry and enjoys working long hours.

What happens during a typical day at a trucking company?

A transportation manager or owner is responsible for planning and executing transport strategies and operations. As the owner of the company, you’ll find yourself on the front line organizing and optimizing operations all day, every day.

Depending on the nature of the shipping company, your daily responsibilities might include managing domestic vendors and collecting inbound moves. You may also need to manage shipments between distribution and fulfillment centers.

You also oversee the company’s transportation partners and maintain the required service levels for (inbound) new materials and raw materials shipments. Unless you have a robust accounting and finance department, your job will also involve cost control on operations.

What is the target market?

Most shipping clients are commercial clients. Within the business-to-business space, clients tend to be manufacturing and industrial.

How does a trucking company make money?

The business makes money by signing service contracts with clients for shipping services. Some companies charge by weight or dimensions of goods being shipped. Other companies set up flat-fee service contracts for estimated weight or volume shipments.

What is the growth potential for a trucking company?

The easiest way to start a trucking company is to hire subcontractors to ship goods for you. This dramatically lowers the cost because you don’t need to pay for trucks, salary and benefits for drivers, and insurance for the vehicles.

A larger scale operation can be built by hiring drivers directly and making them permanent employees. Using this method, it is possible to expand into many territories, eventually creating a national, or even international, company.