Have you thought about starting your own expedited freight company? Do you already own an expedited freight company and are thinking about transitioning to a long-haul trucking company? The Apex Startup Program can help you in the startup process or can assist you in the next steps. Here are some frequently asked questions answered by Apex Startup Program experts, Associate General Counsel Reghan Grasty and Business Startup Sales Consultant Catherine Van Dyke.
What are the steps and how much does it cost to start an expedited freight company?
Reghan: First, you should create a business plan. Think about your customers, your partners, and your services. But keep in mind insurance and equipment costs, both of which could change depending on your geographical region. To set up your company, you’ll want to take care of various state level and federal filings. Your equipment’s gross vehicle weight will determine if you are regulated by the FMCSA. If your equipment’s gross vehicle weight is 10,001 pounds or more, you are FMCSA-regulated, which means additional registrations, compliance obligations, and of course added costs. For more information on starting an FMCSA-regulated company, check out Start Your Own Trucking Company.
What kind of experience and driver’s license do I need for my expedited freight company?
Reghan: Typically, you’ll need a Class B driver’s license. A Class B license is for those operating vehicles with a gross vehicle weight that doesn’t exceed 10,000 pounds. If you exceed 10,000 pounds, you’ll likely need a Class A license. Also, your driving experience could help you receive better insurance rates and attract more customers. Two years of driving experience is a good guideline.
What about a fuel card or an ELD – do I need them?
Reghan: If you are FMCSA-regulated due to your gross vehicle weight, you’ll fall under the federal ELD mandate, subject to certain exceptions. But even if you aren’t FMCSA-regulated, check with your state for any state-level ELD mandates. As for fuel cards, most options give discounts on diesel only. So, if your vehicle uses diesel, you should take advantage of a fuel card such as the TCS Fuel Card. If your equipment runs on regular gasoline, your options are more limited. Just use your best judgment to save gas money like you might with your personal vehicle.
What registrations do I need to run an expedited trucking company? Are they different from running a long-haul freight company?
Reghan: Again, most registrations depend on whether your company is FMCSA-regulated. If you plan to haul specific types of freight, you might need specific equipment. Then your equipment would indicate if you are FMCSA-regulated. If so, additional registrations and compliance obligations are required.
Is getting paid for hauling expedited freight different from getting paid for hauling long-haul freight?
Catherine: Are you paid directly by your customer or a third party? Normally, getting paid directly by your customer gets money in your pocket quicker. But if you are using a broker as a middleman, then the usual long-haul payment time frames, typically 30-40 days, apply. Depending on the amount and frequency of your invoices, factoring could be a good option for you to speed up cash flow. Contact Apex to see if factoring is right for you.
Can I update or upgrade my authority to a semi-truck later?
Catherine: Authority types depend on where you are hauling and your equipment’s gross vehicle weight. If you are already FMCSA-regulated, less steps are involved. You’ll need to update your current registrations and take care of insurance and other related permits or state filings. On the other hand, if you aren’t regulated and have a Class B license, you probably need to upgrade to a Class A license and take care of the registrations and compliance obligations mentioned in questions 1 and 3.
Is having an expedited freight company an easy transition to a long-haul trucking company?
Catherine: Experience in the freight industry helps to smoothly transition into a long-haul trucking company. However, experience doesn’t change the fact that long-haul trucking companies are more regulated.