How To Invest In Trucking Without Driving If you’re interested in tapping into the thriving trucking industry but prefer to avoid the long hours, solitude, fatigue, and risks associated with driving a truck all day, you’ve come to the right place. In this article, we’ll explore three proven methods to start a trucking company without actually doing the driving. Let’s provide you with a sneak peek of what we’ll cover:
Acquiring a Truck and Leasing (or Renting) It Out
The initial strategy is quite straightforward: purchase a semi-truck and either lease or rent it out. When we talk about leasing out your truck, we’re referring to “leasing on” to a carrier and handling freight loads for them, all without you driving. Alternatively, you can establish your own operating authority, manage your trucks, hire drivers, find loads independently, and commence earning income without partnering with a carrier. This path is more direct but involves more licensing, paperwork, and administrative responsibilities. We’ll delve into the details of this in the licensing section below.
1. Acquiring Your Truck
Your journey begins with acquiring a suitable semi-truck. Cost considerations are paramount. A new semi-truck may range from $130,000 to $200,000, while used ones are more affordable, starting as low as $30,000. However, prices can go up to $180,000 depending on the year, make, and model.
2. Financing Your Truck
Financing options are available if you qualify. Established banks like Bank of America, Wells Fargo, or US Bank offer reasonable rates and terms, though they impose stringent requirements. Specialized financing companies like CAG Truck Capital, First Capital Business Finance (which might be more receptive to start-ups), and Selectrucks (for used trucks) are worth exploring.
3. Leasing a Truck
If buying isn’t your preference, you can lease a truck. Leasing companies evaluate your creditworthiness and other factors. This option involves lower initial costs compared to buying and may also offer “lease-to-own” arrangements.
4. Choosing Between Buying or Leasing
Buying a truck requires a higher initial investment but can be more profitable in the long run as you won’t have lease payments cutting into profits. It also allows asset ownership, which can be advantageous. However, if you lack the funds for a purchase or face financing difficulties, leasing is a viable entry point into the trucking business. Leasing enables quicker scalability and can ease initial financial pressures.
5. Selecting the Right Truck and Trailer
Your choice of truck and trailer should align with your budget and business strategy. Consider factors like new or used, day cab or sleeper, and the brand of the truck, keeping in mind that repair and maintenance costs can vary among brands.
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Obtaining a Trailer Rental Business
Consider purchasing trailers and renting them out, creating a passive income stream. This model simplifies your operation and minimizes concerns related to truck maintenance, driver management, and licensing. Research your market, source the right trailers, and rent them through platforms like Rentalyard.com.
Mobile Billboard Advertising
Explore outfitting your trucks with billboards and renting advertising space to businesses while your trucks are in operation. Maximize your trucks’ utility by generating additional revenue through this creative approach. Learn more about starting a mobile billboard business in our dedicated article.
Leasing Your Truck to a Carrier
Now that you have your truck, consider leasing it to a carrier, especially if you opt not to operate under your own authority. Leasing to a carrier streamlines administrative tasks and offers various benefits. Carriers handle paperwork, fuel taxes, find freight, provide dispatching services, arrange insurance, and may even offer maintenance services. While some carriers may provide drivers, you might need to recruit your drivers.
Recruiting Drivers
Hiring and retaining drivers with the appropriate CDL licenses is a crucial aspect of your business. Driver recruitment can be challenging due to the high turnover rate in the industry. Offer competitive wages, incentives, and ensure your drivers have access to comfortable, safe, and reliable vehicles to enhance retention.
Administrative Steps
Beyond the core aspects, several administrative tasks need attention:
- Establish Your Business: Choose a business name, create a logo, set up a website, and ensure your business is listed on Google My Business for visibility.
- Create a Business Plan: Develop a comprehensive business plan covering budgeting, target market, competition, marketing strategy, pricing, operations, and growth projections.
- Obtain Funding: Secure necessary funding through personal savings, credit cards (carefully), friends and family, banks, online funding sources, SBA loans, or, if necessary, retirement accounts.
- Secure Truck Storage: Find an affordable location to park your truck when not in use, ideally near your base of operations.
- Obtain Licenses and Permits: Depending on your operations, you may need various licenses and permits, such as an MC Number, appropriate insurance, BOC-3 form, Unified Carrier Registration (UCR), US DOT number, and International Registration Plan (IRP).
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Investing in FedEx Delivery Routes
Another strategy to explore is purchasing FedEx routes. This involves acquiring a designated territory to make deliveries. FedEx routes may include trucks as part of the package. You’ll receive compensation for each delivery made, and FedEx offers two types of routes: Ground Pick-Up & Delivery routes and Linehaul routes. Ground routes involve local deliveries using vans or box trucks, while Linehaul routes encompass longer journeys with semi-trucks.
Buying a Bread Route
For an even simpler venture, consider buying a bread route. Similar to FedEx routes, you’ll cover a designated territory, selling bread to supermarkets and retailers. Many bread distributorship arrangements are exclusive, ensuring your business serves as the sole supplier to local retailers. Bread routes are established, stable businesses, often providing reliable income from day one.
Conclusion : How To Invest In Trucking Without Driving
Starting a trucking company without driving is entirely feasible through various strategies. We hope this guide has been informative and helps you find the trucking investment that suits your goals. If you’re interested in exploring more trucking business ideas, don’t miss our article on the best trucking businesses to start, covering over 20 ideas. Additionally, if passive income is your focus, explore our articles on businesses that run themselves and the ultimate beginner’s guide to passive income, featuring more than 25 effective strategies.
