By sennder team, 6 minute read
If you’ve been thinking about opening a trucking business, now is a great time to go for it. Demand for freight shipping capacity has grown across Europe in recent years, and will likely continue surging for the foreseeable future. Compared with other types of businesses, you can get started in trucking relatively quickly, and with a little strategic planning, you’ll have all the loads you can handle lined up in no time. In this article, we’ll answer a couple basic questions about the trucking business up front, and then we’ll walk you through the steps you can take to start building your trucking business today.
Is the trucking business profitable?
More than half of Europe’s shipping is carried on trucks, and when it comes to inland shipping it's about 75%. According to Statista, the total value of Europe’s road freight market this year could reach nearly 420 billion euros by 2025.
Despite this enormous and growing demand for truck freight shipping, the number of truck drivers is way down. According to the IRU, the rate of unfilled truck driver positions may reach 60% by 2026. While every major country in Europe is experiencing a shortage of truck drivers, Poland, Germany and the UK have been hit the hardest.
This may be a bad sign for Europe’s supply chain, but it's good news for anyone who is starting a trucking company. Across Europe, the need for reliable road freight capacity is growing. This presents a golden opportunity for trucking companies. Anyone who can buy a truck, register it, and put it on the road is sure to find that business is booming.
Can I start a trucking business with one truck?
One vehicle is all you need to get started in trucking.
In fact, in terms of volume, European road freight is dominated by small players. A comprehensive report by the IRU states that about one-third of all European trucking companies own and operate just one vehicle, and a further 51% of trucking companies have two to ten trucks.
So if you don’t have a lot of capital to start with, plan on starting with just one or two trucks. You can always grow your fleet later, and in the meantime you’ll start gaining valuable experience.
Here at sennder, many of the trucking companies that we work with got started with one truck. For example, UAB Rolavita, a Lithuanian trucking business that we continue to work with, was founded by two people who bought one truck in 2013. In less than ten years, UAB Rolavita grew its fleet to include 11 trucks.
How to Start a Successful Trucking Business in 5 steps
So, what does it take to get started? Here are five key steps to build a trucking company from scratch.
Step 1: Make a business plan
Any good business starts with a good plan. Taking time to make a thorough plan can really pay off down the line, so make sure to put some serious thought into it.
You’ll likely want to start with some basics, such as creating a company name, identifying your target market, and drafting a pricing plan.
Additionally consider these questions:
How many trucks do you want to start with?
What kind of customers do you want to work with?
Do you plan to ship locally or internationally?
Are their particular types of trucks or particular types of goods that you want to work with?
What will set your company apart from the rest?
Step 2: Legally establish your business
Once your plan is laid out, you’ll need to legally establish your business and obtain resources that confirm your company’s identity such as tax ID numbers, business bank accounts, and insurance plans.
The process can vary from country to country, so make sure to look into local requirements. That said, generally in Europe you’ll need the following to get started:
certificate of incorporation
bank reference letters
resume and photos
description of the scope of your business
Step 3: Secure trucks and necessary equipment
With your documents in order, you’re ready to begin building your fleet. Generally, more trucks can bring in more money, but large vehicles are not cheap. If you’re new to the business, it may be wise to start small.
In trucking, dependable equipment can make the difference between success or failure, so put some time and thought into the best way for you to acquire your initial fleet.
As a first step, consider your budget and look into options for buying versus leasing trucks.Also consider which type of truck you are looking for. There are a number of different truck and trailer types to choose from–everything from vans and 7.5 ton trucks on the smaller side to mega-trailers and roadtrains on the large side.
Be sure to pick from trucks that are suited to the goods you intend to carry. For example, refrigerated trucks are required for perishable foods, but would be completely unnecessary if you don’t intend to ship groceries.
A good option for carrying large loads of dry goods is a tautliner. Tautliner is the generic term for a truck with a curtain-sided trailer. The curtains can be opened so that forklifts can easily load and unload cargo from the sides, which may help you achieve faster loading and unloading times. The curtains are then closed and tightened with winches to secure the cargo for travel.
If you’re unsure about which truck to buy, run a cost-benefit analysis for a few different trucks that you are considering. Do your research and try to account for maintenance costs and fuel. Old, used trucks are cheaper up front, but repair costs add up quickly and any time that a truck spends in a garage is a loss of income. Newer trucks will be able to deliver more loads before needing any serious maintenance.
Finally, you may want to consider what kind of fuel you’d like to use. Even standard diesel engines can run on biodiesel or HVO fuel. Reducing carbon emissions with the use of these fuels may help your business to stand out. Increasingly, big shippers want to transition to greener supply chains, and offering lower-emissions trucks may just help you win a few extra contracts.
Step 4: Hire a team
You can skip this step for now, if you will start with just one or two trucks, and you plan to take on all of the work involved with owning, operating, and driving your vehicle(s). But to run your business more efficiently, you’ll probably want to hire at least a small team as your business grows.
If you are planning to drive trucks yourself, you’ll need to obtain a driver’s license which is valid for the class of vehicles you have. If you plan to hire drivers, don’t forget to double check that they have the required driving license.
You may also want to create an onboarding process which enables you to confirm divers’ experience and skills as well as their eligibility to work. You should also consider running background checks on applicants that you plan to hire. Beside drivers, some trucking companies hire teams to cover administrative and finance needs. Lager companies may also include teams that focus on sales and marketing.
Step 5: Find your customers
With your business plan, documents, trucks, and personnel - you’re ready to start trucking. The final step to making profits is finding customers.
Trucking company customers are “shippers” that have freight to move. Many of these shippers post jobs on marketplaces or load boards on the web. Then trucking companies bid on loads that they are able to carry.
Shippers tend to prefer working with trucking companies that they know they can depend on. So think of each first load as a chance to prove your worth. Do your best to complete your pickups and deliveries on-time and you’ll be much more likely to secure ongoing business from your customers. As you begin to gain more customer contacts, you may want to consider how you prefer to work with shippers. For example, winning long-term contracts will help to guarantee steady and recurring business over the long term. But carrying one-off spot shipments may come with higher profit margins per load.
Do I need to use load boards, or a freight forwarder?
Load boards, or freight boards, are online marketplaces where shippers post loads they need covered so that trucking companies can cover them. In some cases trucking company operators may need to bid on loads to “win” them. In other cases, you may be able to simply “accept” loads at a fixed price. Especially for trucking businesses that are just starting out, load boards may offer opportunities to find business with new customers. However, load boards are notoriously tricky to deal with. It is not always easy to search or filter for the best loads for your business. Also, some load boards are not updated in real time, meaning that the loads you see aren’t always available.
In order to avoid the administrative work of combing through load boards and bidding on loads, some trucking businesses work with freight forwarders. Freight forwarders essentially organize shipping services for suppliers. Often big shipping companies will make contracts with freight forwarders who then work with a number of smaller trucking companies to cover their road transport needs.
sennder is here to help get you trucking
As Europe’s leading digital freight forwarder, we at sennder offer much more to trucking companies than typical freight forwarders can.
We know that starting your own trucking company is a lot to take on by yourself, so we’ve developed our digital tools to help you get your business up and running seamlessly.
Our carrier platform called orcas, includes tools to help you find loads, manage your transports, and collect pay easily.
Our marketplace is designed to help you avoid pain points like long wait times between loads, or empty kilometers (that is, a truck driving empty to its next pick-up location).
By setting up lane preferences, you can more easily find sennder loads that suit your business needs. Also, our load-matching algorithm will learn your preferences and begin to suggest the best loads for you.
Getting paid is also easy with sennder. We handle invoices on your behalf. All you need to do is submit a proof of delivery (POD), through our app on your smartphone. We also offer fast-payment options to increase your immediate capital, as needed.
Finally, you can charter your trucks with us to gain steady work and save time on finding jobs.
Want to learn more about how sennder helps truck drivers? Check out our Driver app blog.
Or, if you’ve already established your trucking business, contact us to gain access to our platform and services.