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How to Start a Trucking Company Without Driving [Complete Guide]

Interested in capitalizing on the booming trucking sector, but don’t want to deal with the long hours, isolation, fatigue, and risk of driving a truck all day? You are in the right place.

In this article, we will discuss 3 proven ways that you can use to start a trucking company without doing any driving.

We will go into each of these strategies in more detail, but here’s a preview of what we’ll cover:

Let’s get into it!

This post may contain affiliate links. If you click on a link and complete a transaction, I may make a small commission at no extra cost to you. 

The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.

Option 1: Getting a Truck and Leasing (or Renting) It Out

The first strategy is straightforward.  You buy a semi-truck and lease it out or rent it out. 

When I talk about leasing out you truck, I am really referring to “leasing on” to a carrier and fulfilling loads for them. Now, you are not going to be doing the driving for these loads, which is why they are fairly passive. Of course, you don’t need to lease on to a carrier if you obtain your own operating authority.

In that case, you can buy your trucks, hire your own drivers, find loads yourself, and start making money without joining with a carrier. It’s more straightforward, but requires far more licensing, paperwork and administrative obligations. We will cover all of that under the licensing section below.

In case you don’t know, a carrier is just a trucking company that has the appropriate licenses and authority. Some carriers are wiling to lease on a truck when they need it and will also allow the truck owner to hire a driver to run the actual load (which is trucker lingo for a single freight shipment).

Now renting out your truck is different. That’s when you literally rent it out to someone, just like a car rental service. As you can imagine, this strategy is far more passive.

Regardless of the strategy you choose, you will need to get a suitable truck, so let’s start with that.

1. Getting Your Truck

One of the first things you want to explore is getting your semi-truck.  Cost is probably at the top of your mind, so let’s address that first.

How Much Does a Semi-Truck Cost?

A new semi-truck can run between $130,000 to $200,000. A used semi-truck is much more affordable and you can buy one for as low as $30,000 (but even used trucks can be as high as $180,000, depending on the year, make and model).  Source

How Much Can I Make Leasing Out a Truck?

You can make approximately $750 to $1,500 per week leasing out your truck, but after accounting for common expenses like driver wages, gas, trailer rentals, insurance, tolls, etc., your net earnings may be around $1,000 per week.  Source  

Can I Finance the Purchase of My Truck?

As mentioned earlier, trucks can be pricey. 

The good news is that financing is available for semi-trucks if you qualify.  You can go to big banks like Bank of America, Wells Fargo or US Bank.  They will typically offer decent rates and terms, but they’re going to have really tough requirements (they want solid credit, good financials and don’t like inexperienced start-ups).

Alternatively, you can check out specialty financing companies.

If this option appeals to you, check out CAG Truck Capital, First Capital Business Finance (they may be more receptive to start-ups) and Selectrucks (they offer financing on used trucks).

Can I Lease A Truck?

If you don’t want to buy a semi-truck, you can lease one.  The leasing company will still look at your creditworthiness and other factors, but your starting costs can be far less than buying a truck.  There are also “lease-to-own” options if you don’t have the money right now to buy your truck, but you eventually want to own one.

Should I Buy or Lease My Truck?

Buying a semi-truck can cost more initially, but may be more profitable over the long run because you won’t have lease payments eating into your profits.  Plus, it’s always nice to own an asset and be able to sell it in a pinch if needed.  

If you don’t have the money to buy a truck outright or cannot secure financing for a truck, leasing can be a fine option to get you started in the trucking business.  Leasing can also allow you to scale faster (since you don’t need as much to acquire your next truck).  

Plus, leasing can save you money when you are starting out, so you can more easily cover the cost of repairs and maintenance on your truck when they happen (which can be significant).

What Type of Truck and Trailer Should You Get?

You should get a truck and trailer that align with your budget, as well as your strategy. 

Here are some key factors you need to consider when deciding what truck you want to buy.

New or Used:  This is always an important question when buying any type of vehicle, but even more so when buying a truck that is going to see a lot of miles.  

A new truck will have a longer shelf life and fewer repairs in the beginning, but you’ll need to pony up for it.  A used truck can be substantially cheaper, but you must make sure that the mileage is not too excessive and the truck is in reasonably good condition.  

Hire a qualified mechanic to go with you when checking out a used truck for sale, so they can give you an unbiased and expert view on the actual condition of the truck.

Day Cab or Sleeper: Day cabs will be cheaper than sleepers because they don’t have the extra features that allow a driver to sleep in the truck.  But a sleeper will offer far more versatility on how you can use your truck because it can be used for local deliveries or for “over the road” transport (this is just trucking jargon for hauls lasting a long time over long distances).

If you want to learn more about sleeper cabs, check out my article on the topic, which covers all of the key info you need to know.

Selecting a Truck Brand: There are several major truck brands that you can consider.  They include the following:

  • Freightliner
  • International
  • Kenworth
  • Mack
  • Peterbilt
  • Volvo

Different brands focus on different things, but one important thing to note is that when paying for repairs or maintenance, parts for certain brands may cost more or be harder to find.  

In general, Freightliner seems to have easy access to parts and be more affordable.  Peterbilt and Volvo, while great brands, can have higher expenses in this area. 

2. Getting Your Trailer

As for trailers, there are three main types: (i) reefers (refrigerated units); (ii) day vans (the most common trailers – just big rectangular boxes with doors in the back; and (iii) flatbeds (which have no doors or enclosures). 

As mentioned earlier, you should get the type of trailer that you will need based on the sort of routes you want to run.  Of course, you can hold off on buying one and rent it out when needed.

That sparks an idea. 

You can buy just the trailers and rent them out.   Sounds like a super passive way to make money in the trucking business without the hassle of dealing with trucks breaking down or needing maintenance, drivers quitting, etc. 

You can get a simple flatbed trailer for between $10,000 to $20,000 based on listings I saw on mylittlesalesman.com and rent them out on sites like Rentalyard.com for around $900 per month.  Wow…

For a full guide on how to start a trailer rental business, check out my article on the topic here.

Another great way to earn extra passive income without driving is outfitting your truck to have billboards on the sides. 

You can rent out those mobile billboards to companies who want to advertise their business while your trucks are doing their routes.  Hey, your trucks have to run their loads anyway – why not make some extra money while they’re at it?  

If you want to learn more, check out my article on how to start a mobile billboard business.

3. Leasing Your Truck Onto a Carrier

Now that you have your truck, you need to lease it on to a carrier, especially if you don’t plan on operating on your own authority.

The nice thing about using a carrier is that they deal with many of the administrative hassles associated with operating a trucking business.

As stated, to lease on to a carrier, you don’t need your own operating authority, which can be a paperwork nightmare (more on that later). However, if you have your own authority and provide your own insurance, the carrier may be willing to give you a larger cut. 

If you lease on to a carrier, they will often:

  • Handle most of the paperwork
  • Handle fuel tax
  • Find freight for you and provide dispatching services
  • Arrange insurance
  • Often provide maintenance at their shop

Source

In some cases, the carrier may also provide drivers when you lease your truck to them, but if not, you will need to have drivers in place.

There are a host of companies that will lease your truck from you.  You may need to apply as an owner-operator for some of them, but a good number will allow you to lease your truck and have someone else drive.  

You can start your search by checking out the following:

4. Getting Your Drivers

Speaking of drivers, finding and keeping drivers with appropriate CDL licenses is likely going to be an important part of your business. 

Finding good drivers isn’t going to be easy.  You can post “driver wanted” listings and screen interested applicants.  You can also check out job boards and try to get good referral candidates through word of mouth, etc., but you won’t really know if they are good until you have tried them out.

In addition, the turnover for drivers is very high.  Trucking’s a tough job and burn-out is not uncommon. And if someone is offered a better gig, they will likely take it.

So it may be a challenge to find good, reliable, long-term drivers.  You can try to mitigate the risk of your drivers leaving by treating them well (paying a fair market wage and offering incentives for them to stay on), letting them drive comfortable, safe and reliable vehicles, etc..  

But to cover your bases, you should build up a stable of solid drivers that you can call on to help reduce the impact of any single driver leaving.

5. Administrative Steps

So far, I’ve only focused on the most important parts involved in starting your truck leasing company, but there are some administrative steps that you’ll need to follow as well. Let’s cover them briefly.

1. Establish Your Business

One of the first administrative tasks you want to do is to set up your new enterprise. That includes choosing a name and logo for your trucking company. If you’re not sure where to start, check out Shopify’s free business name generator.

As for a logo, you can use the free version of Canva.com. Just type in “logo” in the search bar at the top and you will get plenty of templates that you can modify to your liking. If you want to outsource this for cheap, go to Fiverr. There will be plenty of people who will do this for you for $5.

You’ll also want to set up a website for your business and get on Google My Business so that people looking for truck leasing services in your are can find you. Here is a link to a Google service that will allow you to create your website for free as well a link to Google My Business tutorial that will show you how to get your business listed on Google.

The last step of this process is setting up your business entity. If you want a separate business entity, like an LLC, corporation or partnership, then you will need to complete this step. Many business owners do want to do this, mainly for liability protection issues (i.e., a business entity can protect assets held outside the business if there is ever a claim against the business).

If you hold significant assets outside the business, this may be worth it, especially given how potentially dangerous trucking can be. You should consult a lawyer and accountant to make sure this is the right decision for you.

2. Create a Business Plan

A business plan is essentially a roadmap for your business.  

It organizes your thoughts relating to your business into an actionable plan. Some things to include in your business plan are budgeting, identifying your target market and competition, marketing strategy, pricing strategy, operational plans, and growth projections.

Don’t know how to get started? The Small Business Administration has a great tool to help you write your business plan.

3. Obtain Funding

Almost any business is going to require some money to start. Now we have already discussed financing and leasing options, so much of your start up costs can be addressed this way, but not all.

You will probably still need some seed money to start.

Here are some of the ways you can fund your business:

  • Personal savings. You will often need some skin in the game before lenders will work with you, so having some personal savings is important.
  • Credit Cards. Due to high interest rates, credit cards are probably not an ideal choice, but if you can snag a 0% teaser rate on a credit card, you can put some of the start-up costs onto that card at a ultra low interest rate (at least until the teaser rate period expires). Try to get one that lasts at least a year so you have some time to get your business off the ground.
  • Friends and family. Although these people may be willing to lending you money, you have to weigh that against the risk of souring your relationship with them if things go sideways.
  • Banks. Banks are a traditional source of funding for new businesses, but they will often conduct extensive due diligence and underwriting before lending to a brand new enterprise.
  • Online Funding. This includes includes getting a loan using peer-to-peer lending, funding through kickstarter campaigns, using online lenders, etc.
  • SBA loans. Another funding source for your new business can be a loan guaranteed by the Small Business Administration. SBA loans are provided through a bank, but since the SBA guarantees a portion of the loan, qualifying for an SBA loan is often easier than qualifying for a traditional bank loan.
  • Retirement Accounts. If you have funds in a Roth IRA, you can withdraw the contributions portion at any time without penalty or taxes. If you are withdrawing from a traditional IRA or 401(k), you may be subject to early withdrawal penalties and taxes if you do so before you reach a certain age. As a general rule, retirement accounts should be earmarked for retirement, so you may not want to pursue this as your first choice.

4. Secure a Location to Store Your Truck

You will need someplace to park your truck when it’s not in use. You will want to find a location that doesn’t cost an arm and leg and is reasonably close to your base of operations. Check out companies like stowit and truckerpath to get started.

5. Obtain Licenses, Permits, Etc.

As mentioned, you can start a truck leasing company without necessarily operating under your own trucking authority, but you may not be able to make as much.

If you do want your own authority, you will need to undergo a fairly extensive process.

You will need to apply to the Federal Motor Carrier Safety Administration (FMCSA) for a Motor Carrier (MC) Number. It costs around $300 and they have a 21 day vetting process.

You will need to make sure you have appropriate insurance in place and file a BOC-3 form, which basically appoints a service of process agent in the states in which you will operate.

You will also need a Unified Carrier Registration (UCR) if you are transporting cargo across state lines. Additionally, if you operate across state lines and meet certain other requirements, you may need a US DOT number and an International Registration Plan (IRP).

Renting Out You Semi-Truck

So far, we have focused on leasing on to carrier, but let’s touch on the rental strategy I mentioned at the top of the article.

You can simply rent out your semi-truck through various platforms. The most popular are probably coop.com and rentalyard.com. By buying trucks and renting them out fulltime, you can create a pretty sweet passive income business.

It’s also a far simpler model because you don’t really have to worry about drivers, licensing, and all the rest. They key is to get the right trucks for your market, buy them on favorable terms, and rent them out through these platforms at a profit.

If this strategy sounds interesting to you, check out my full article on the topic here.

Option 2: Investing in a FedEx Delivery Route

Another way to start a trucking company without driving is by buying FedEx routes. 

Here’s how it works.  You buy a FedEx route that covers a designated territory.  You then have the right to make deliveries in that territory.  Your managers and drivers will handle the day-to-day delivery obligations and you will get paid on each delivery made.  

In many cases, you don’t have to worry about buying your trucks because the FedEx routes for sale usually come with the trucks as part of the package.  

There are two types of FedEx routes you can purchase: (i) FedEx Ground Pick-Up & Delivery (P&D) routes, which are basically local deliveries using vans or box trucks, and (ii) FedEx linehaul routes, which are much longer routes using semi-trucks.

The great thing about P&D routes is that FedEx provides a steady flow of deliveries each day, so you never have to worry about where the next job is going to come from.  Your only real responsibility is making sure the deliveries happen on time, every time.  

Another advantage of FedEx P&D routes is that you can operate this business using vans or box trucks instead of semi-trucks, which can be less complicated and expensive. 

That being said, FedEx Linehaul routes can be more profitable.  Here’s a chart showing the profit you can expect to make for each type of route.

Type of FedEx Route

Profitability

FedEx Ground P&D Route

10%-25% of gross revenue

FedEx Linehaul Route (solo runs)

20%-30% of gross revenue

FedEx Linehaul Route (team runs)

40%-45% of gross revenue

Source: Route Consultant

According to FedEx, the average revenue for a FedEx route owner is $1.5 million.  That figure represents the entire revenue for all routes owned by a single business owner (most owners own multiple routes) but does not reflect deductions for operating costs.  

To determine profitability, you will need to deduct expenses from revenue.  

The annual profit per route is between $30,000-$40,000 with the average cost per route being $100,000 according to Buyersmarketinc.  That’s an awesome average ROI of between 30%-40%.

It is important to note that there are requirements you need to follow if you want to operate these routes, including specific FedEx ISP requirements.

I have put together a chart that summarizes them:

General Requirement

Description

Must be a non-profit corporation

No LLCs, LLPs, sole proprietorships, partnerships or limited partnerships allowed

Must employ all personnel

Must have responsibility for the following:

·      Employer-related expenses

·      Payroll deductions

·      Training personnel

·      Ensuring employees are legally allowed to work in US

Must follow agreement terms

General contractual obligations include:

 

·      Maintain a safety and compliance program

·      Corporation in good standing

·      Service reliability

·      Vehicle maintenance

·      Maintain image of FedEx

·      Remain committed to FedEx business

Must comply with route requirements

ISP Agreement requires:

·      Minimum ownership of 5 routes or 500 stops per day

·      Cannot hold more than 15% of routes in a given termination (subject to certain exceptions)

·      Must provide both business and home deliveries within territory

Sources:  FedEx and KR Capital

If you want to learn more about buying FedEx routes, check out my step-by-step guide to buying a FedEx route.  

Buying a Bread Route

If you want to start a trucking business with even fewer complications, you can purchase a bread route.  Somewhat similar in concept to a FedEx route, you can buy bread routes that cover a designated territory.

You basically make money off every loaf of bread that you sell to supermarkets and retailers in your territory.

I am talking about selling well-known brands like Wonder, Nature’s Own, Pepperidge Farm and Sara Lee to major retailers like Walmart and Target.  And to top it off, many of these distributorship arrangements are exclusive, so if the supermarket in your area wants to carry your brand of bread, they must buy through you.

Most bread routes are stable and established businesses and can provide reliable income from day one.    

How much of a return on investment can you expect from a bread route?

Check out the ROI column on this chart I put together.  I found these listings on Routeforsale.net using Arnold & Bimbo Bread as the filter. There are a bunch of other places where they sell bread routes (and for different brands), but I just selected this one because it had a large selection of routes.

Description of  Bread Route

Price

Cash Flow

ROI

Arnold & Bimbo Bread – Blythe, CA

$104,000

$58,552

56.3%

Arnold & Bimbo Bread – New London County, CT

$115,000

$71,330

62.0%

Arnold & Bimbo Bread – Sebring, FL

$220,000

$90,222

41.0%

Arnold & Bimbo Bread – Daytona Beach, FL

$177,000

$78,992

44.6%

Arnold & Bimbo Bread – Atlanta, GA

$200,000

$74,908

37.4%

Arnold & Bimbo Bread – Dalton, GA

$131,500

$66,971

50.9%

Arnold & Bimbo Bread – Buford, GA

$299,000

$129,011

43,1%

Arnold & Bimbo Bread – Perry GA

$199,000

$74,308

37.3%

Arnold & Bimbo Bread – Coffee County, GA

$209,000

$120,796

57.7%

Arnold & Bimbo Bread – Gilmer County, GA

$120,000

$59,488

49.5%

The average ROI for these bread routes is a whopping 46.0%!  Now, you should temper your expectations here because most of these routes are likely operated by the owner (which means they do the driving).

If you want a more passive income source, you will have to hire drivers to run the routes. Of course, in that case, the ROIs will go down, but you should still have a lot of room to play with.

Want to learn more about bread routes?  Check out my beginner’s guide to buying a bread route.

Conclusion

So there you have it: three great ways to start a trucking company without driving.

Hope this has been useful in helping you find a truck investment that’s right for you.

If you want to learn about more great trucking businesses ideas, check out my article on the best trucking businesses to start [we cover 20+ ideas that you can explore].

If passive income is your focus, check out two of my favorite articles on the topic:

My article on businesses that run themselves, where I cover some great businesses that can generate attractive levels of return without a lot of day to day involvement by the owner.

My ultimate beginner’s guide to passive income [25+ strategies that work], where I cover tons of effective strategies that generate passive income.