Last Updated on February 22, 2023 by Tabraiz
Truck drivers don’t all need big trucks. There is a massive market for small deliveries, which can be Handel with a standard truck.
What exactly is a “box truck?”? A box truck is a vehicle with a cuboid storage area attached to the chassis; it is one piece, not a power unit with a trailer. Within the Federal Highway Administration, Are you interested in being an owner-operator of a semi or box truck? For tips, see our guide to starting an owner-operator trucking company.
The 5-Step Process To Start a Box Truck Business.
01. Start your business with paper.
The government doesn’t legally recognize your business unless it’s registered. Before you can start to haul loads, you’ll need some paperwork. These are the steps you need to take to create your own box truck business.
- Apply for an Employer Identification Number (EIN). This federal tax ID is similar to a social security number. It’s where you create the legal structure for your business. You can form an LLC if you are driving your vehicle. You can apply for an EIN via the IRS online portal or do preliminary research with U.S. Small Business Association.
- Register your business with your state. Use the SBA’s tool to find your state’s registered office.
- Get credentials from Federal Motor Carrier Administration. Although you don’t need a CDL for a box truck driver, you still drive a commercial vehicle. That means that you must sign up with the FMCA. A USDOT number is required if you intend to transport cargo between states. To determine if you require a DOT number, use the FMCA tool. You will likely need an “MC Number,” the FMCA’s “authority-to-operate” designation. This permanent authority requires payment of $300. Learn more about the FMCA’s website and see links to register for an “MC number” (FMCA’s “authority to operate”)
- Create your driver qualification file. Even if you are an owner-operator and don’t possess a CDL, the Federal Motor Carrier Safety Administration (FMCSA) requires that carriers keep records that show that their drivers are qualified to drive on the roads. Even box truck drivers need a qualification file. This checklist shows you the required documents. Start with the section “Initial DQ file Documents.”
02. Establish a business checking bank account
It would help to keep your finances separate once your business has been established. It requires at least a business checking account.
A business credit card is also an option. It will allow you to keep your fuel tank full between payments and can even be used to fund your first box truck. This list has five for more information on managing cash flow in the box-truck industry.
3. Purchase your box truck, insurance, or other related equipment.
Don’t worry if you don’t have the money to purchase a truck for yourself. It’s possible to start your own box truck business. Many drivers rent trucks to do occasional work. You can rent a truck from a commercial truck rental company like Ryder and Enterprise without spending as much upfront capital.
It is costly to rent a truck. You will typically have to pay a monthly rental fee and a per-mile rate. Leasing a truck is a great way to keep more of your income. Renting a truck is more expensive. You’ll need to deposit around $5,000 to sign a lease agreement. However, leasing is more affordable than renting over the long term.
You can also buy your truck. Box trucks are available in $25,000 to HTML90,000. You can even get more if you choose a refrigerated cargo area. This means financing will be required from the dealer, a bank, or an SBA program. We read our article on low down-payment semi-trucks to learn more about financing commercial trucks. A lot of the advice also applies to box trucks.
The three options of renting, leasing, and purchasing a truck can all be combined. Box truck financing can be rented on weekends to start a carrier gig. After you have built some capital through your box truck business, it is possible to obtain a lease agreement. Once your company has enough money to pay a downpayment, you can purchase your truck.
Insurance is also necessary. Insurance companies such as Progressive and No-Fault, and Safeline offer commercial box truck insurance. Your rental or leasing company might also be able to assist.
Consider the equipment you will need to transport loads into and out of your truck. For example, get a pallet jack if you need to move pallet loads. Also, ensure your truck is loaded with straps and other load-securing equipment.
04. Find work.
After your business is up and running, all you need are customers. It’s now easier than ever to get in touch with shippers.
Start by creating a load board. This is an online marketplace for freight carriers and freight. Examples include Landstar (free, with premium services available at a cost) and DAT (subscription-based). These load boards let you filter work by type to find box truck work. Amazon Relay can be a load board only for Amazon logistics and offers many opportunities for box truck carriers.
An electronic logging device (ELD) can also include a spot freight function. These digital ELDs ensure compliance with FMCSA’s hours of service rules. They regulate the work and breaks for truck drivers. ELDs are not required for many box truck drivers. However, the hours-of-service regulations do allow for local driving and short haul. Many ELD providers also offer freight-spotting services. The system can identify the location of your truck and match you up with work. This service turns a driver into an Uber driver. Just turn the app on and begin hauling.
05. To grow or maintain your box truck business, you must have a steady cash flow.
Box truck businesses have ongoing expenses. Gas is required. Rent or lease fees or payments for a truck loan are required. Every month, insurance bills arrive. A box truck business that is successful needs consistent, reliable cash flow. Even if there are many jobs, this industry can be challenging.
This is because shippers might not pay right away. Many of them work on net-30 terms. This means they have 30 days to pay you your invoice. Others offer a net of 60 tours. If you don’t have enough gas to get by today, the promise of tomorrow is not worth it.
This is a financial tool called “factoring.”Bobtail pays your invoices and collects them from customers. This service is often worth it, especially when the invoice value is as low as ours.
Bobtail is a factoring company that streamlines financing. It has low factoring rates (1.99% – 2.99% depending on your business size) and no hidden fees. We don’t require you to sign any contract. Open the app and enter your load information. Funds will be available the next day if requested by 11:59 a.m. This app is a powerful tool for funding a new box truck company.