Starting a trucking business requires substantial upfront costs for essentials such as trucking equipment and insurance, but what are some startup costs that are not as apparent as the more commonly recognized costs? Let’s look at 5 hidden costs for starting a trucking business!
Please note that this is not a complete list. To see a more detailed list of itemized startup costs, download our Trucking Business Budget Template.
International Registration Plan (IRP)
The International Registration Plan is a reciprocity agreement between different member jurisdictions (states and provinces) in the U.S. and Canada that allows for payments of apportionable fees based on the miles you travel in each jurisdiction. These fees are in addition to the taxes paid on fuel each quarter (see IFTA). To learn more about how you can register for IRP, read our blog here.
IRP registration fees can vary by jurisdiction and fleet size but typically cost between $1,500-3,000 for trucking business owners with a single truck.
Electronic Logging Device (ELD)
A congressional mandate, and FMCSA final rule, made it so any commercial driver who is required to keep a record of duty status (RODs) must have electronic logging devices (ELD) in the cabin of their vehicle. An ELD is a piece of hardware that records driving time for commercial drivers. The hardware can plug into the onboard diagnostics port that is in a truck cabin and is used to record data on the engine, location, speed, miles driven, and more.
ELD costs depend on various factors including the hardware and accessory devices that will be needed for the ELD to run correctly. Electronic Logging Devices can range in price from $150-$500 per unit depending on the hardware and service capability. Common ELDs will require the monthly or yearly purchase of a subscription to access various services. ELDs that do not require subscription services will have higher costs for devices that are compatible with smartphone applications. To read more about ELDs, how they work, and what elements impact their cost, read our blog here.
Equipment and Clothing
You may or may not be surprised to know that you will need more than a truck and a trailer to run your business. You will need a variety of clothing and equipment such as chains, tarps, steel-toed boots, binders, straps, hardhats, trailer seals, and more.
Your investment in various equipment and clothing would likely be in the range of $1,000-1,500, but this can vary widely by the type of trailer you own or the services you offer. For example, a flatbed trucking business will require more load securement equipment than a dry van trucking business. You can view a list of our recommended equipment and clothing products here.
Technology and Software
Investing in the right technology and software can significantly improve your chances of success. Expenses such as a load board (we recommend DAT One Pro – this is an affiliate link!), a laptop, an internet connection, GPS tracking, bookkeeping software, or a Trucking Business Spreadsheet are all expenses that could be crucial to your trucking operation. Don’t lose sight of these costs!
Technology and software costs will vary depending on whether it is a one-time fee or a monthly subscription cost as well as the provider you work with, but plan to set aside an initial $1,000-2,000 to cover these expenses.
Unified Carrier Registration (UCR)
The Unified Carrier Registration (UCR) is a federally mandated system for registering commercial motor carriers engaged in interstate travel in the United States. The UCR program was created by the U.S. Congress as part of highway funding legislation and is administered by the Federal Motor Carrier Safety Administration (FMCSA).
Under the UCR program, motor carriers must register and pay an annual fee based on the number of commercial motor vehicles they operate. This fee will vary, but for a small trucking operation, it will cost approximately $37 for 0-2 trucks and $111 for 3-5 trucks. The UCR website will post their most recent fee schedule on their website here.
Please note that startup costs can vary widely depending on your state, economic conditions, and individual circumstances. These are estimates and are NOT tax or legal advice. The good news is that many of these startup expenses could very well be tax deductible! It is worth having a conversation with a licensed accountant or tax advisor to find out.
Starting a trucking business is a journey filled with challenges and rewards. Preparing yourself financially and mentally is crucial for success. Our Trucking Business Plan Starter Bundle is a comprehensive bundle that serves as your roadmap, offering the tools needed to secure financing with a detailed business plan, define and accomplish business goals, make informed decisions on your business structure, become fluent in trucking industry lingo, and establish an effective budget. The Starter Bundle includes seven essential documents, featuring The Business Plan Guide (including four guiding documents), the SWOT Analysis Template, the SMART Goals Template, and the Business Structure Guide. Enjoy two BONUS items: a 160+ Word Glossary for the Trucking Industry and the Trucking Business Budget Template with Estimated Startup Costs. Make your trucking business dreams a reality with strategic planning and informed decision-making using this definitive bundle! A regular $80 value for ONLY $37! Learn more about the bundle HERE.
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC does not assume responsibility for any omissions, errors, or ambiguity contained herein. Contents may not be relied upon as a substitute for the FMCSA's published regulations. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.
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