Starting a trucking company is a rewarding venture, but one common question new owners ask is: “Do you need a Commercial Driver’s License (CDL) to start a trucking company?” The answer is straightforward—you don’t need a CDL to own a trucking business. However, if you plan on driving a truck yourself, you will need a CDL. In this article, we’ll break down what it takes to start a trucking company, explain how to hire qualified drivers, and discuss why partnering with a reliable factoring company like OTR Solutions is key to maintaining smooth operations.
Why You Don’t Need a CDL to Start a Trucking Company
Owning a trucking company is about managing the business side of things—securing contracts, overseeing logistics, managing finances, and hiring truck drivers. Driving the truck is just one part of the operation. A CDL is required to drive a commercial vehicle, but it’s not necessary to have one when you own the company. Your role as the business owner focuses more on ensuring that the trucks are driven legally and safely by hiring properly licensed drivers.
If you plan to drive a truck, you will need a CDL. However, many trucking company owners focus on running the business and leave the driving to professionals. This division allows owners to concentrate on business growth, while licensed drivers handle the transportation.
What Licenses and Permits Do You Need to Start a Trucking Company?
While a CDL isn’t required to own a trucking company, there are several other licenses and permits that are essential to legally operate the business.
Operating Authority (MC Number)
An MC Number is mandatory for any trucking company that transports freight across state lines. It ensures that your business complies with federal regulations and is obtained through the Federal Motor Carrier Safety Administration (FMCSA). The approval process usually takes 25 days, and the application is available online via the FMCSA website.
International Registration Plan (IRP)
The IRP allows your trucks to operate across multiple states with a single license plate. It requires reporting mileage in each state where you operate and involves annual fees based on your travel routes. Costs typically range from $1,500 to $2,000 per year.
International Fuel Tax Agreement (IFTA)
The IFTA simplifies fuel tax reporting for companies that operate across state lines. You’ll need to apply for an IFTA license through your base state and file quarterly fuel tax reports. Staying compliant with IFTA regulations is essential, as failing to do so can lead to significant fines.
Responsibilities of a Trucking Company Owner
Being the owner of a trucking company involves a range of responsibilities beyond just obtaining the necessary licenses. Here’s what you’ll need to manage.
Managing Operations
Running a trucking company means overseeing daily operations such as route planning, load management, and vehicle maintenance. These tasks ensure that your trucks are running efficiently and that your drivers have the resources they need to complete their deliveries.
Hiring Truck Drivers with Valid CDL
You will need to find truck drivers with valid CDL licenses and the necessary endorsements for specific types of freight, such as hazardous materials. It’s essential to hire drivers with clean driving records, experience, and a commitment to safety. Conducting background checks, road tests, and offering competitive pay can help you build a reliable team.
Managing Compliance
Maintaining compliance with federal and state regulations is a critical aspect of running a trucking company. This includes adhering to DOT requirements, hours-of-service rules, and ensuring that your trucks meet safety standards. Regular audits can help avoid penalties and keep your fleet operational.
Securing Contracts
To keep your trucks moving and your revenue consistent, you’ll need to build relationships with brokers, shippers, and clients. Securing long-term contracts provides a steady stream of business, while strong communication and reliable service help foster trust and loyalty.
Handling Finances
Running a profitable trucking company requires diligent financial management. From fuel costs to payroll and vehicle maintenance, keeping track of your expenses is essential to maintaining a healthy bottom line. Factoring services can provide the cash flow needed to cover these expenses while waiting for payments from shippers.
Hiring CDL Licensed Truck Drivers for Your Business
Since you won’t be driving yourself, it’s crucial to hire qualified drivers with a valid CDL. Here’s a guide to hiring truck drivers.
Set Job Requirements
Clearly define the type of driving required (local, regional, or long-haul), the experience level you’re looking for, and any additional qualifications, such as endorsements for specialized freight.
Check CDL License Status
Check that all candidates have a valid CDL and any necessary endorsements for the type of loads they’ll be hauling. This ensures compliance with federal regulations.
Conduct Background Checks
Look into the candidate’s driving record, criminal background, and past employment. You’ll want to ensure that your drivers are responsible and reliable.
Perform Road Tests
A road test will help you assess the driver’s skills in handling your vehicles and navigating real-world conditions.
Offer Competitive Pay
To attract and retain top talent, offer a fair wage and benefits. Providing health insurance, retirement plans, or performance bonuses can make your company more appealing in a competitive market.
Finding the Right Truck Drivers
Once you know what you’re looking for in a driver, the next step is to find truck drivers who are the right candidates. Here are some proven methods.
Online Job Boards
Posting jobs on sites like Indeed, CDLjobs.com, and Truck Driver Jobs 411 can help you reach a large pool of qualified drivers.
Recruiting Agencies
Partnering with specialized recruiting agencies can speed up the hiring process, as these agencies have access to pre-vetted drivers. Here are some specialized recruiting agencies that can help speed up the hiring process for truck drivers, offering access to pre-vetted candidates:
DriverReach
Focuses on driver recruiting and compliance, offering digital tools to streamline the recruitment process.
Trucking Unlimited
A specialized job board and recruitment agency that helps trucking companies find qualified CDL drivers.
TransForce
A leading provider of driver staffing, connecting companies with pre-qualified truck drivers across the U.S.
Networking
Attend industry events and join trucking associations to meet potential hires. Establishing a presence in the trucking community can help you build a reputation and find reliable drivers.
Referral Programs
Offering incentives for employee referrals is a great way to find trusted candidates quickly. Here are some examples of referral programs that trucking companies might offer to incentivize current employees to refer new drivers.
Cash Bonuses
Offering a cash bonus, such as $500 to $1,500, when a current employee refers a driver who gets hired and stays with the company for a certain period (e.g., 90 days or 6 months).
Tiered Bonuses
Increasing the reward based on the number of referrals. For example, $500 for the first referral, $750 for the second, and $1,000 for the third.
Gift Cards or Prizes
Providing gift cards to popular retailers or tech gadgets (like tablets) when a referral is successfully hired and remains with the company.
Paid Time Off (PTO)
Offering additional paid time off as a reward for successful referrals.
Referral Contests
Holding quarterly or annual contests where the employee with the most successful referrals wins a grand prize, such as a vacation or a significant cash bonus.
Challenges in Truck Driver Recruitment
The trucking industry faces several challenges when it comes to hiring qualified drivers. Understanding these challenges can help you develop strategies to overcome them.
Driver Shortage
The trucking industry is currently experiencing a driver shortage, driven by an aging workforce and fewer younger people entering the field. To attract drivers, offer competitive salaries, benefits, and clear career advancement opportunities.
High Turnover Rates
Trucking has a high turnover rate due to the demanding nature of the job. Offering more flexible schedules, home time options, and paid time off can help reduce burnout and improve retention.
Health and Wellness
The sedentary nature of truck driving can lead to health issues such as obesity and cardiovascular problems. Offering wellness programs or health benefits can make your company more attractive to potential drivers.
What Else Do You Need When You Start a Trucking Company?
Running a successful trucking company requires more than just hiring a truck driver and securing contracts. Maintaining steady cash flow is key, and that’s where factoring services come in. A factoring company like OTR Solutions can help ensure that you’re paid quickly for your freight invoices, allowing you to cover essential expenses like fuel, payroll, and maintenance without delays.
What Does OTR Solutions Offer?
OTR Fuel Card
Fuel costs are one of the largest expenses for trucking companies. The OTR Fuel Card offers discounts at over 2,200+ in-network stations nationwide, helping you reduce fuel costs and manage your budget effectively. With consistent savings on diesel, your bottom line benefits from day one.
BOLT Instant Payments
Don’t wait for funds to clear. With BOLT Instant Payments, you get paid faster, typically within minutes of submitting your invoice. This ensures steady cash flow, making it easier to cover operational expenses like fuel and payroll without delay.
Client Portal
Our easy-to-use Client Portal allows you to manage your finances with ease. You can track your invoices, see payment statuses, and access reports all in one place. This transparency helps you stay organized and in control of your business operations.
Mobile App
With the OTR Solutions Mobile App, you can manage your factoring services on the go. Submit invoices, track payments, and access essential tools such as the Fuel Finder right from your smartphone. The app streamlines your processes, saving you time and effort.
Broker Checks
Mitigate the risk of working with unreliable brokers by using OTR’s Broker Check tool. This tool allows you to evaluate the payment history and reliability of brokers before accepting a load, ensuring that you’re working with dependable partners and protecting your cash flow.
Dedicated Operations Team
OTR Solutions provides a dedicated operations team that manages your accounts receivable and other operational tasks. From invoicing to collections, our team ensures everything runs smoothly, freeing you up to focus on growing your business. You’ll have peace of mind knowing that your back-office tasks are handled efficiently.
Partner Network
We provide access to a vast partner network of trusted service providers, offering exclusive discounts on everything from maintenance to tires. Our network helps you reduce operational costs while keeping your trucks in top condition, all while ensuring minimal downtime.
Insurance
Our partner, Marquee Insurance Group, specializes in commercial vehicle insurance, liability insurance, and cargo insurance tailored specifically for the trucking industry. Having the right insurance coverage helps protect your fleet and your drivers, giving you peace of mind on the road.
Equipment Leasing
Through our partner network, you gain access to flexible equipment leasing options (Freedom Leasing and TruckerFi) that help you grow your fleet without the upfront capital investment. Leasing offers a cost-effective way to acquire the trucks and trailers you need, ensuring you can scale your business as demand increases.
Compliance and Tax
Staying compliant with federal and state regulations can be complex. Our partner, Foley Services, offers compliance and tax services, helping you navigate DOT/FMCSA regulations and ensuring that your business stays up-to-date with filing requirements. These services reduce the risk of fines and penalties, allowing you to focus on growing your business.
Freight Boards
We connect you with freight boards (DAT and Sylectus) that help you find available loads and reduce deadhead miles. These platforms give you access to a broad range of shipping opportunities, enabling you to keep your trucks moving and generating revenue.
TMS (Transportation Management System)
Our partner network includes TMS providers (ALVYS TMS and LoadOps). With features like route optimization, load tracking, and fleet management, this system streamlines your processes and improves operational efficiency, boosting your bottom line.
Learn More About Our Partner Network
Start Your Trucking Company with Confidence
Do you need a CDL to start a trucking company? No. However, hiring experienced and licensed drivers is crucial to your success. Partnering with OTR Solutions for factoring services and taking advantage of our financial tools will help you run a profitable and efficient business. Get started today with the right drivers, the right partners, and the right financial strategies.
Apply for Factoring with OTR Solutions Today