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IS THE TRUCKING BUSINESS A GOOD INVESTMENT IN THE UNITED STATES?

July 26, 2022 by admin0Permitstruck businessTrucking

Do you want to set your hours and be independent while driving? Are you planning to venture into the trucking industry but not sure if the trucking business is a good investment? We have all the answers to your question.

The trucking industry keeps everyday life moving, and the industry has continuously grown over the years. With the trucking demands and digital revolution, trucking companies are more valuable than ever. But the National Association of Small Trucking Companies states that about 15% of new trucking companies survive their first year of business.

Well, your trucking company does not have to be one of those 15% statistics. Whether owner-operator or truck driver, you can create a profitable trucking business with careful planning, hard work, and dedication.

At Global Multi-Services, we want to make that happen. That is why we compiled a list of things to consider to ensure your trucking business provides a return on your investments.

SELECT A SPECIFIED NICHE  

Choosing a specified niche determines the services you offer, what equipment you buy, and what rates you charge. It is also one of the best ways to form critical financial planning and make profits.

Look for loopholes in the industry. That is, what customers are lacking in the industry. It is also advisable to pick a niche with less competition directly from large, established companies.

For example, the dry van market is more competitive because it has many established companies and owner-operators. But temperature control is a more profitable niche. There is less competition, seasonal fluctuation, and risk of economic disruptions to the market.

CALCULATE THE OPERATIONAL COST  

An adequate financial plan is paramount when starting a trucking business. Also, your income must be higher than your expenses to make profits. Therefore, you must know your operational cost. These help you determine the revenue you need to generate to make a profit and how high you need to set your prices.

The operational cost is divided into fixed costs and variable costs.

FIXED COST  

Fixed costs are predictable costs, and they do not fluctuate over time. They include the following:

  • INSURANCE

Having insurance is mandatory for all trucking companies. Primary auto liability and general liability insurance should be the very minimum. You can also include coverage for physical damage, cargo, medical payment, and reefer breakdown coverage.

  • TRUCK AND TRAILER COST

Your truck and trailer cost often varies from time to time. However, it will be a fixed cost you pay every month if you take a loan.

  • LICENSE AND PERMIT

Trucking companies must obtain state and federal permits to operate legally in the United States. The Federal Motor Carrier Safety Administration and Department of Motor Carriers ensure trucking companies adhere to the industrial regulations. So, you need funds to apply for your IRP Apportioned License Plates, IFTA License and Decals, UCR Permits, Motor Carrier Authority, and Unified Carrier Registration. These licenses and permits often require yearly or quarterly renewal, which could mean extra fees.

VARIABLE COST  

Variable costs are costs that do not fluctuate based on production or revenue-generating activities. They affect cash flow and increase based on your business size.

Variable costs include the following:

  • MAINTENANCE SERVICE

Your equipment requires regular maintenance to keep them in good working condition. It varies depending on your operations and equipment.

  • FOOD AND TOLLS

Food is a must-have, and its prices depend on the area and restaurant. The toll fee also depends on the states you are operating across.

  • DRIVER COMPENSATION

Driver compensation is your highest variable cost. Therefore, carefully plan the types of truck drivers you want to employ. Also, you can work with owner-operators if it’s a better option.

  • FUEL PRICE

Fuel prices are different in each state, season, and city. So, your fuel cost depends on the miles traveled and the state.

CUT FUEL COST

The International Fuel Tax Agreement simplifies fuel tax reporting for trucking companies operating in the contiguous states and Canadian provinces. But they must obtain an IFTA License and IFTA Permit in their base jurisdiction to be qualified. Registered companies must also file IFTA Quarterly Fuel Tax Report to their base jurisdiction totaling miles traveled and fuel purchased in all participating jurisdictions. Your base state calculates the fuel tax you owe each jurisdiction.

With IFTA, trucking companies’ fuel taxes are determined by the fuel cost in their base jurisdiction. That means fuel price at the pump minus their per-gallon state tax. Therefore, always purchase fuel in states and pumps with the lowest price.

FIND SHIPPERS 

Finding loads can sometimes be hard for a new trucking company. So, you need to develop a good strategy for finding shippers. Develop direct relations with shippers and offer a competitive price. These promote your business and maximize your profit margin. You can also find shippers through freight brokers or load boards. But they will charge a fee, reducing your profits.

PLAN YOUR CASH FLOW  

Running a successful trucking business requires careful planning of your cash flow. Shippers and brokers make payments between 15, 30, and 45 days. So, a cash-flow management strategy is mandatory to keep your business running while waiting for payments.

PROMOTE YOUR BUSINESS  

The trucking industry is highly competitive. Therefore, you must promote your business relentlessly to attract good clients and quotes. Create a website and social media accounts to reach out to your potential customers. Also, attend various networking events and join online communities to connect with people beneficial for your business growth.

ABOUT GLOBAL MULTI SERVICES  

Global Multi Services help trucking companies apply for their truck permit and license in the United States. Our experience and expertise allow us to overcome permit application difficulties and obstacles, allowing you to run your trucking business legally.

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HOW TO NAVIGATE THE TRUCKING INDUSTRY

July 22, 2022 by admin0Permitstruck businessTrucking

The trucking industry is one of the industries that people mention when they think about booming industries in the United States. The industry has enormous potential for professional truck drivers that want to start their trucking business. But it is highly competitive and sometimes frustrating.

Building a successful trucking company involves having the right equipment, using the proper safety indicators, and getting the required permits. These truck permits allow you to operate interstate and internationally without violating the regulations. Are you considering transitioning from a professional truck driver or owner-operator to running a trucking company? These blogs from Global Multi Services give details on what to do when starting your trucking business.

PERMIT NEEDED TO START A TRUCKING COMPANY 

Navigating your way through permits in the trucking industry can sometimes be confusing and overwhelming. The Department of Transportation regulates the trucking industry and ensures trucking companies adhere to state and federal regulations. They also ensure motor carriers follow the state requirements for interstate and intrastate transportation. Here are some mandatory permits for trucking companies

INTERNATIONAL FUEL TAX AGREEMENT 

The International Fuel Tax agreement simplifies the reporting of fuel used by trucks operating across the conterminous United States and Canadian provinces. Registered trucking companies have a single fuel license. But they also need to file quarterly fuel use tax returns with their base state.

UNIFIED CARRIER REGISTRATION

The Unified Carrier Registration is mandatory by the federal government for trucking companies that travel interstate and internationally. Trucking companies must also register their business to receive UCR Permit and pay an annual fee based on fleet size.

INTERNATIONAL REGISTRATION PLAN 

The International Registration Plan permits operation under a single registration plate. IRP is issued to trucking companies in their base jurisdiction and requires an annual renewal fee. The state allows them to operate across the United States and Canadian provinces.

MOTOR CARRIER AUTHORITY 

A motor carrier authority is an operating authority that gives trucking companies the right to transport goods on public roads. Receiving your MC Authority allow you to operate legally across the United States

MISTAKES TO AVOID WHEN REGISTERING YOUR TRUCKING COMPANY 

Taking a leap of faith by starting your trucking business always comes with mistakes. There are many trials and errors as you learn the valuable lessons of your new business. But these mistakes made can be costly and time-consuming to correct. Here are the most common mistakes trucking companies make when starting their business.

MISSPELLINGS 

Every detail must match 100% when registering your trucking company. From entity name, owner’s name, address, and Employee Identification Number to the Federal Motor Carrier Safety Administration registration. Spelling mistakes can cause rejection of your registration. It can cost you money to correct.

ADDRESS ISSUES

The Federal Motor Carrier Safety Administration uses the United States Postal Service to notify and communicate with trucking company owners. That means they do not accept PO BOX as a physical address and registering a wrong physical address can create problems.

Many trucking companies now use virtual addresses. They pay other companies to create a virtual for them. This address is accepted through the USPS system, and the company accepts mail on behalf of the trucking company. These also allow trucking companies to create an entity in any state. But this is not possible in states that require proof of residency to approve your International Registration Plan.

NO BUSINESS KNOWLEDGE

Focusing on what you know about trucking and driving is not enough to run a successful trucking business. You must research and understand how the industry works. Running a trucking business can be less exhausting and tiring when you know how to navigate it. Therefore, you need to be mentally ready for the stress that comes with profit. Study on your own or with your startup representative.

FILLING ERROR 

Common filing errors include

  • Not having your business identifier listed on the EIN filing.
  • Filing under the wrong entity type.

Obtaining your EIN before registering your business entity with the state can cause rejection of your company name due to similarity to another one in your state.

RUSHING YOUR BUSINESS REGISTRATION

Rushing your business registration can lead to many errors that can take time and money to correct. Therefore, take your time when registering and ensure everything is correct.

Do you want to be a brokerage, dispatcher, and carrier all at once? You will need a lot of capital and time. These might be too much to handle simultaneously. Register for one first and grow into your other plan. Building your business with a clear vision gives you a higher chance of success.

STATE FILING

Every state has a different permit and handles everything differently. Failing to adhere to every state regulation can get you penalized, fined, or your license revoked. Therefore, know the rules of the states you want to operate across. You can also consult a trucking permit company like Global Multi Services for help.

HOW TO AVOID THESE MISTAKES

CREATE A BUSINESS PLAN 

Creating a business plan helps you focus on the core parts of your business. It lays out permits, licenses, capital required, financial projections, and other strategy details. It also keeps you focused on building your company according to a blueprint.

BE PREPARED 

Be prepared physically and mentally. Ask yourself these questions what will I do if my truck breaks down on my first load? How will I run my business if it takes weeks to get paid on my first load? How can I pay my drivers and find loads?

GATHER INFORMATION

Gathering information for the entire process helps you understand what you are getting into and how to navigate your way. It also avoids confusion or falling into the hands of scammers. Check out online information about starting a trucking company and ask around other people in the industry.

TO SUM IT UP 

Understanding how to start a trucking company can sound complex and tiring. Realizing the industry is a bit more competitive should not affect your desire to start. With the right business plan, permits, and finance, you can get the wheels rolling in your trucking business.

Do not be afraid to hire a trucking permit service provider like Global Multi Services to help you. Our truck permit services are the best in the United States. We will ensure you have everything completed and filed correctly.

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THE CONS OF WORKING AS AN OWNER-OPERATOR

June 30, 2022 by admin0truck businessTrucking

Company drivers drive the company’s truck. They also transport loads when and where the company assigns them, giving them little control over their work schedules. Owner-operators are self-employed business owners who transport freight loads for others. They have more choices about when they work and what types of loads they haul.

The reality of being an owner-operator is that it is often more work when compared to working for someone else. Owner-operator has trucks and takes on all the management jobs with their driving role. Instead of being told where to go, they find loads to haul. They also create awareness, build relationships, and find ways to stay busy when times get slow.

But owning your equipment can be very expensive. The cost of buying or leasing trucks plus maintenance can be overwhelming. Owner-operators must pay bills on time to keep creditors from filing judgments against them. They also have to pay for liability and health insurance while setting aside money for taxes. Read on as Global Multi Services explain the cons of operating as an owner-operator.

EQUIPMENT EXPENSES

Working as an owner-operator requires having your rigs. Many often start with one truck and eventually build up to a fleet that may include several trucks, trailers, and flatbeds. Buying or leasing tractors is one of the primary and most expensive investments.

As an owner-operator, you can ask for a loan to buy the equipment, and the potential lenders will examine your credit history. That means the better your credit rating, the more promising your chances of getting a low-interest loan. But you need to finance at least a part of the investment.

Many owner-operators choose to lease their truck and other equipment instead of buying it directly. That is, they only pay for the property when they use it. These allow them to upgrade their equipment more often and get better equipment with less money up-front. Are you planning to become an owner-operator in the future? Now is the best time to start planning for your dream career. Start saving money from your paycheck to have a down payment for your tractors.

HIGHER FINANCIAL RISK

The financial risk of an owner-operator is enormous as they are responsible for the maintenance and fueling of the trucks. Although they can take time off when they want, they spend this time on truck maintenance and keeping business records. Also, the pressure and stress they face can be more tiring than an employed driver. Owner-operators also need to research and network with trucking companies to find who will pay the best and be consistent.

BIGGER RESPONSIBILITIES

While there is much freedom in being an owner-operator, it comes with new responsibilities you may have yet to consider. An owner-operator must research to know how to manage their trucking business. They are responsible for replying to emails, answering phone calls, and pounding the pavement to land new clients. They also handle things they were minimally involved in as an employee. These include repair services, maintenance schedule, truck cleaning, and compliance.

LESS FLEXIBILITY

Owner-operators start at the bottom and work their way up. That means they may not have the best schedule or routes until they gain a bit of tenure and seniority. They are also limited to other companies’ clients, patterns, and communication technology. These make their earning potential at the beginning unstable.

LESSER DOWNTIME

Owner-operators work for more hours than company truck drivers. They have a lot more of the workload to cover on their own. They inspect the truck before hitting the road, set up contracts, and haul the freight. These show they do not have much downtime. Also, starting as an owner-operator can be very stressful. Many companies will not give them loads until they have established a good reputation in the industry. Furthermore, they must constantly network and build their brand as a reliable source for hauling freight.

WRAPPING UP

Becoming an owner-operator often seems more enjoyable than working as a company driver. However, it requires hard work and more responsibility since they own their trucking business. Every decision they make affects their business and customer trust.

ABOUT GLOBAL MULTI SERVICES

Global Multi Services is a one-stop place for all your trucking permit applications across the United States. We provide expert services to trucking companies at an affordable price. Contact us today for a fast and efficient truck permit application.

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