In this fast-paced age, companies, organizations and individuals are always looking for a reliable service provider to move equipment, parcels and other items from one part of the country to another. Where expedited transportation is required, hotshot truckers are there to help.
With the right techniques and strategies, hotshot trucking can be a profitable business. If you are interested in entering this industry, the following steps should help you get started:
1. Familiarize yourself with the business.
Understanding the whole concept of the business can help you go far. Read resources about the industry and conduct your own market research to identify what kind of hauling is more in-demand in your area. Once you identified that, you can then figure out what kind of services to offer, hotshot trailer to buy, and equipment to add to your fleet.
2. Process your legal documents.
Plan the overall structure of your business. It can be a sole proprietorship, partnership or company. Once you are ready, start processing your business registration.
Here are the basic legal documents that you’ll need for your hotshot business:
- Commercial Driver’s License (CDL) – You’ll need a CDL to haul heavy loads weighing over 26,001 pounds. The requirements to get a CDL vary per state but generally, you need to be at least 21 years old with no disqualifying criminal record.
- Department of Transportation (USDOT) and Motor Carrier (MC) Authority numbers – You can get these numbers after completing the Motor Carrier Identification Report and Safety Certification Application. While you can get your numbers after filing your application, your request for authority will be reviewed by the Federal Motor Carrier Safety Administration (FMCSA).
- Unified Carrier Registration (UCR) – All businesses that operate commercial motor vehicles are required to be registered under UCR. You’ll need your USDOT and MC numbers to register. For the complete requirements to apply for UCR, you can visit your home state’s Department of Transportation website.
- International Registration Plan (IRP) – You need this to operate in all states as well as in many Canadian provinces.
Tax forms – The tax form that you’ll need will depend on the weight of your truck. You can visit your local tax office for more information on this.
- International Fuel Tax Agreement (IFTA) – You can get one if you operate a qualified vehicle in US or Canadian states that are a member of the International Fuel Tax Agreement. You can contact DOT to get your IFTA decal.
- BOC-3 Form – If you are operating interstate, you will need this form that can give your carrier a legal presence in the states where you haul freights.The BOC-3 designates legal agents in every state where you operate. Kindly note, though, that only a legal agent can file this form with the FMCSA on your behalf.
- The Standard Carrier Alpha Code (SCAC) – This is a two-to-four-letter code used to identify transportation companies. You can get yours from the National Motor Freight Traffic Association (NMFTA) located in Alexandria, VA. You can contact them at (703) 838-1831.
3. Buy or rent your equipment.
At this point, there is no turning back, so the next step that you need to focus on is building your fleet which involves a significant investment. For startups, you could start with a basic truck and a flatbed trailer. Depending on your budget, your options include leasing and purchasing used or new units.
Leasing is a good option if you are financially restricted from purchasing different types of hot shot trailers. As you get new loads to haul, you could rent a hot shot trailer for your needs for the duration that you need it.
Another possible option is to apply for a short or long-term loan to purchase your own vehicle and trailer. Most major banks, as well as short-term lenders, offer a different type of financing for hotshot businesses.
4. Spell out the terms and conditions of your contracts.
Excited to get your first load? Before that, you need to first draw up contracts for your clients to protect your interest and standards of service. An attorney who is experienced in the hot shot trucking industry can help you out.
5. Comply with the essentials.
You’re almost ready to sign your first hauling contract. But before that, ensure you’ve complied with the following business essentials:
Insurance – You’ll never know what could possibly happen in the course of fulfilling your commitments. One accident could easily cost you thousands of dollars on lost or damaged items, vehicle or trailer. Different types of insurance coverage may apply to help you stay protected.
- Professional drivers – If you are running a startup as owner-operator, it is a must that you are skilled in this field. If you have a fleet of several vehicles and trailers, you also need to hire expert drivers who will take the job seriously. Since hotshot trucking involves expedited cargo and the demand may be unpredictable, some businesses hire contract drivers.
- Fleet – Hotshot trucking is all about delivering goods safely, efficiently and on-time. This is only possible if you have a reliable fleet of vehicle and trailers. It would be good to have different types of flatbed trailers so you can haul a wide variety of loads.
Competitive pricing – Everyone wants to get the best deal and this also apply in hotshot trucking. You can check the industry standards for pricing loads to give you an idea on how to have an edge by having a competitive price.
- Business process – A well-laid out business process allows you to effectively handle any possible situations that may arise in the course of your business. Don’t forget to include processes that will give your customers the best customer support.
6. Build your client base.
A good marketing strategy can make or break your startup business. That is why it is important to have a solid plan on how you can market your services. You can place advertisements in your local papers, sign up for online loadboards, call contacts that may require your service, or create a website. Do whatever combination of marketing you think will be most effective to help your business gain new clients.
If you want to start generating revenue without having to do the above, you may also consider leasing your services or signing up with a company that is in need of a trucking contractor. These two offer you the convenience of not having to deal with billing and paperwork.
7. Find ways to build client loyalty.
Even if you are just starting, it’s a good idea to already start planning how to build client loyalty. Aside from excellent client support, you may also consider giving loyalty discounts and other offers. As a business owner, it is important to hold loyal clients in high regard as they can help not only in giving you a stable revenue, but also in promoting your business by word of mouth.
Starting a hotshot business is not too difficult. Our time-tested tips above should help you easily navigate through the process of setting up your business. If you have established a good foundation on the above, it should be easier for you to go to the next level which is growing your business and keeping a busy, but steady pace.