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Considering starting a trucking business? Now is an excellent time, as demand for freight shipping capacity has grown across Europe. The trucking industry offers a relatively quick start and strategic planning can help you secure loads.
In this comprehensive guide, we cover aspects of starting a trucking business, including costs, profitability, and starting with a single truck. We provide an 8-step plan for establishing a successful business, exploring different trucking types, profitable ones, and addressing the driver shortage. We discuss load boards, freight forwarders, and introduce sennder, a platform designed to help you start trucking.
Understanding the Trucking Industry
The trucking industry is a critical component of the global economy, responsible for the majority of freight movement. It's a sector characterized by its resilience and adaptability, consistently responding to changing market demands. Recent trends show an increasing reliance on trucking services, fueled by the growth of e-commerce and international trade. However, success in this industry requires a thorough understanding of its challenges, including regulatory compliance, fuel cost fluctuations, and the evolving expectations of clients. Identifying your niche, whether in regional deliveries, long-haul operations, or specialized cargo, is crucial for carving out a sustainable business model.
How much does it cost to start a trucking company in Europe?
Starting a trucking business in Europe depends on factors like the country, business model, and freight types. Your plan should cover costs like permits, insurance, warehouses, and equipment. Remember to include all costs in your budget.
Make sure you have enough money for all expenses and extra for unexpected costs. Managing your money well is important. Keep cash available for costs and paying employees. Look into loans and grants to help with starting costs. With good planning and budgeting, you can begin your trucking business quickly.
Can I start a trucking business with no money?
It is possible to start a trucking business without any initial cash flow. This can be done by seeking financing options, such as commercial vehicle loans or other funding solutions. These funding solutions can help bridge the gap when you don’t have the capital to invest in your business. However, it’s important to note that starting a trucking company requires a significant upfront investment and ongoing operational costs.
Is the trucking business profitable?
Short answer–yes.
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 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 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 self owned trucking company and business owner 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 8 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, trucking company business plan, 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: Choose the Right Business Structure
Your choice of business structure can impact how your business runs, how taxes are collected and how much money you have to take on personal property and other financial obligations. Choose an arrangement whose legal protection is balanced with the benefits. For more information about a company structure see Comparing Company types.
Step 3:Select a target market
Identifying your target market and specializing in a particular niche is essential to reduce competition and increase revenue.
One effective way to do this is by selecting a specific industry or market to focus on. For instance, you could specialize in transporting goods for a particular industry, such as agriculture or construction. This approach enables you to develop industry-specific knowledge and expertise, allowing you to offer tailored services that meet the unique needs of your customers.
Another strategy is to select a geographical region to operate within. Focusing on a particular region allows you to develop strong relationships with local businesses and become a reliable and trusted transportation provider.
Ultimately, selecting a target market and developing a specialized niche will help you stand out in the highly competitive trucking industry and increase your chances of success. You can create a profitable and sustainable business by providing tailored services and building strong relationships with your customers.
Step 4: Legally establish your business
Now you must take the necessary steps to legally establish your trucking business and acquire essential documents, such as tax ID numbers, business bank accounts, and insurance policies.
Keep in mind that the process can differ among European countries, so it's important to research local requirements. Generally, in Europe, you'll need the following to establish your trucking business:
Certificate of incorporation: Register your company according to local laws and obtain a certificate of incorporation, which verifies your business as a legal entity.
Bank reference letters: Acquire bank reference letters as part of the process for setting up a business bank account, which may be required for certain financial transactions and operations.
Passport copies: Provide copies of passports for all company directors, shareholders, and other key personnel as part of the business registration process.
Resume and photos: Submit resumes and photographs of company directors and key personnel to demonstrate their qualifications and experience in the trucking industry.
Description of the scope of your business: Provide a comprehensive description of your trucking business, including its primary operations, services, target markets, and any specialized areas (e.g., transporting hazardous materials).
Business license: Obtain the necessary licenses and permits for your trucking company, such as transport operator licenses, commercial driving licenses for drivers, and any additional permits required for specific types of cargo.
By following these steps, you can ensure that your trucking business complies with legal requirements and is prepared to operate successfully in the European market.
Step 5: 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 road trains 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 6: 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 own business operations more efficiently, you'll probably want to hire at least a small team as your business grows.
If you are an owner operator planning to drive trucks yourself, you'll need to obtain a commercial 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 you plan to hire. Besides 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 7:Establish a fleet management process
Establishing a comprehensive fleet management process is essential to optimize vehicle performance and reduce operational costs. This process should encompass meticulous planning, coordination, and execution of all vehicle acquisition, maintenance, tracking, and disposal aspects. By implementing a centralized system, fleet managers can monitor vehicle utilization, fuel consumption, and scheduled maintenance while ensuring compliance with regulatory requirements. Furthermore, incorporating telematics and advanced software solutions enables real-time data analysis and better decision-making, resulting in improved efficiency, cost savings, and a more sustainable and productive fleet.
Step 8: Find your customers
With your business plan, legal documents, trucks, and personnel - you're ready to start a successful trucking company. 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 prefer working with trucking companies 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. 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.
What are the different types of trucking businesses?
There isn't just one type of trucking business; there are various types based on the services they provide, the cargo they carry, and the geographic area they operate in. Here are some common types of trucking businesses:
Local trucking: These businesses operate within a specific region or city, usually delivering cargo within a relatively short distance.
Long-haul trucking: Also known as over-the-road (OTR) trucking, this type involves transporting cargo over long distances, often across states or countries.
Less-than-truckload (LTL): LTL carriers transport smaller shipments from multiple customers that don't require a full truck. These carriers consolidate smaller shipments into a single truckload.
Full truckload (FTL): FTL carriers handle larger shipments that fill an entire truck. These shipments usually come from one customer and are delivered directly to the destination.
Specialized trucking: This type of trucking business focuses on transporting specific types of cargo, such as hazardous materials, refrigerated goods, or oversized loads.
Flatbed trucking: Flatbed trucks carry heavy or large items that cannot fit in a standard enclosed trailer, like construction equipment or large machinery.
Container trucking: This business specializes in shipping containers to and from ports, rail yards, and distribution centers.
Auto transport: These businesses specialize in transporting vehicles, such as cars, trucks, and motorcycles, usually using specialized car carriers.
Intermodal trucking: Intermodal trucking involves using multiple modes of transportation (e.g., trucks, trains, and ships) to move cargo. Intermodal trucking companies often work with other logistics providers to coordinate the transportation process.
Owner-operator: Owner-operators are self-employed truck drivers who own and operate their trucks. They may work independently or lease their services to larger trucking companies.
Each type of trucking business has its own unique set of challenges, regulations, and requirements. If you are interested in starting a trucking business, it's essential to research and chooses the type that best aligns with your experience, interests, and resources.
What are the most profitable trucking businesses?
The most profitable trucking businesses can vary depending on region, demand, and economic conditions. However, some consistently high-earning segments in the trucking industry include:
Refrigerated transport (reefer)
Tanker transport (hazardous materials)
Flatbed transport
Specialized heavy haul
Less-than-truckload (LTL) shipping
Full Truckload (FTL) shipping
Expedited shipping services
Remember that profitability can fluctuate; individual success depends on efficiency, minimizing empty miles, and effectively managing operational costs.
There's a major shortage of drivers
The shortage of drivers in Europe has become a major issue in the commercial trucking industry. This shortage has been caused by various factors such as the aging workforce, stricter regulations, and a lack of interest among younger generations in pursuing a career as a truck driver.Trucking companies are hoping for drivers that can fill the gap. It could give you an advantage in the sense that you'll be helping in the recruitment of more drivers.
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 new business along 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 owner operators 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.
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