How To Start My Own Transportation Business – In this guide, I will take you through the steps on how to start a Hot Shot business. You will learn:
When shippers and brokers have relatively small loads that need to be delivered quickly, they call on the services of Hot Shot Trucks. These drivers and operators specialize in delivering time-sensitive, project-critical loads such as agricultural equipment, construction materials, materials, heavy machinery and more. Hot Shot drivers typically operate super-duty pickups with trailers rather than heavy-duty, Class 8 semis.
- 1 How To Start My Own Transportation Business
- 2 What You Need To Know About Truck Driver Tax Deductions
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How To Start My Own Transportation Business
When done right, hot shot trucking can be a profitable business. You can choose to be an owner-operator – meaning you own and operate the Hot Shot business under your own MC number – or you can lease with another company. In this guide, I’ll take you through the pros and cons of a business, how to get started, and some insider tips on how to get ahead.
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Hot Shot Trucking is often the starting point for many drivers. As insurance requirements become more and more stringent, the Federal Motor Carrier Safety Administration (FMCSA) is trying to prevent new drivers from earning their commercial driver’s license (CDL) and then immediately purchasing a semi truck—a career move that often leads to failure. .
Instead, a more strategic move is to get driving experience in a hot shot truck while your CDL is maturing so that if you decide to make the jump to a semi, it will be much easier for you to qualify for insurance. Also, the rules and requirements for running a hot shot and semi business largely overlap, so cutting your teeth in the hot shot world is excellent preparation for making the jump to big trucking (if that’s a career path you’re interested in. ).
Another major advantage of hot shot trucking is low barriers to entry and low operating costs. Truck payments, for example, can reach $2,500-3,000 per month for a Class 8 semi, but are often closer to $1,000 per month for pickups. Also, smaller vehicles generally offer better fuel economy. This usually allows Hot Shot Trucks to make more than Class 8 drivers. These cost savings are often passed on to customers. Because payments are higher for heavy-duty trucks like semis, those drivers and carriers naturally charge more for partial truckload (LTL) shipments so the loads are worth their weight.
However, since Hot Shot Trucking is so easy to get into, you will face some stiff and persistent competition. This is why it is important for owner-operators to focus on service quality to prevent competitors from underbidding.
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There are two primary disqualifications in the trucking business: health and insurance. Therefore, before opening your own LLC, it is important to make sure that you are not blindsided by unexpected high premiums or restrictions.
Anyone who drives a commercial motor vehicle, including hotshot drivers, must obtain their Department of Transportation (DOT) medical card, so your first step is to schedule a physical exam from a medical examiner at the FMCSA-approved National Registry. These tests cover the basics, such as your medical history, vision, hearing, and urinalysis, and usually cost $120. If you are healthy, you will receive your DOT medical certificate which allows you to operate commercial vehicles for 24 months. After 24 months, you will have to undergo another physical exam to renew your certificate.
The second thing I recommend is getting a commercial insurance test quote from Progressive which only requires your Vehicle Identification Number (VIN). High insurance premiums can quickly eat into your profit margins, so a ballpark quote is a useful way to determine whether to open your own LLC (such as becoming an owner operator) or lease with another company. Insurance quotes are based on your driving experience and history – so if you just got a CDL or have a bad driving record, your insurance premiums are likely to be through the roof, making renting the most profitable route. A lease is often a good option for new drivers because it can help you get your foot in the door more cost-effectively. But if you have more experience and your insurance premiums seem to be getting better, you may want to start your LLC.
The next step is to open a business through your state’s website. They will give you an Employer Identification Number (EIN), which allows you to open a business bank account and accept payments from customers. Then you apply to the FMCSA for a motor carrier or MC number (operating authority). This allows you to cross state lines and hire legal BOC-3 agents to represent you in the states where you operate.
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However, the biggest requirement for activating your MC number is commercial insurance. Most brokers require $1 million liability and $100,000 cargo insurance policies, which—depending on your experience, your age and where you live—cost between $1,000 and $2,500.
This process can take weeks, so it is very important that your applications are filled out correctly and without errors. Authorization experts can help – they specialize in handling paperwork for authorization, federal and state permits, and state DOT regulations for hot shot trucks.
Hot Shot Trucking startup costs can easily reach the $15,000-30,000 range, but this will vary based on individual circumstances. If you already have a truck, for example, you’ll need a trailer and various legal fees. However, if you don’t already own a truck or trailer, you are now responsible for a $5,000 down payment for your truck, $10,000-15,000 for the trailer, and $3,000 for insurance down payments. , $1,000 is a ballpark for your LLC and the other fees listed above are required – all of which can quickly add up to your startup costs.
First of all, hot shot truck drivers need a pickup truck and some type of flatbed trailer. I recommend getting a dual pickup truck, but it comes down to personal preference. For trailers, bumper pulls, gooseneck trailers, tilt decks, and dovetails all have their pros and cons depending on what you’re hauling. Apart from that, leashes, chains and tarps are some essentials. You don’t need particularly heavy-duty chains when riding a Hot Shot, as your weight never needs fat. Tarping is a skill with a bit of a learning curve (much like wrapping a large Christmas present) but it’s useful for keeping cargo dry.
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I generally recommend that hot shot trucks have 20 straps with ratchets; 20′-long 3/8″ chains in your truck, including four binders and a winch bar; and two 6′ drop tarps.
Hot shot freight is time-sensitive, and companies are looking for trucks that can pick up loads in their area and get them on the road as quickly as possible – making load boards the most efficient way for trucks to easily find hot shot. rent
While using a small load board may seem like a tempting way to get loads for hotshots, especially local or local operations, these tools are often not worth it because they are limited in terms of options. . Co Load Boards is one of the most comprehensive freight networks and makes it easy to find hot shot freight. You can save your favorite routes and trails for quick searches later, and if you’re looking for loads in a specific geographic area, you can set an alarm so you’ll be notified when mail starts.
Most listings on load boards are posted by hot shot trucking brokers working for shippers, and the system provides you with information such as brokers’ credit scores and average time to pay, which can help ensure you’re working with the right partners.
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The two general recommendations I make are to run loads on weekends (they should pay more) and keep it for at least three years. This may seem like a long time when you’re just starting out, but I have a few other tips that will help you get your feet wet as quickly as possible.
The rule to follow is “half weight, half rate”. That is, if the load takes up half of what I can carry (half of my weight capacity or half of my actual space), it should pay half the rate per mile I’m trying to get. If I’m trying to get $2 a mile (good quality) with a 40′ trailer and 9,000 pound capacity, a 4,500 pound load of 20′ or less should pay at least $1 an hour. The cost of running a hot shot is modest
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