So you’ve decided to go into hotshot trucking.
Where do you start? What should you do first? What should you do next? Well, here’s the order of the things you need to do. It’s a step-by-step guide with nine clear steps. Just follow along.
1. Open an LLC in Your State
You need a business to get paid. Regardless of what you do — whether you’re a driver, owner, operator — you’re going to need a company. So you open your own business. You could either go to LegalZoom or do it yourself — either is fine. But doing it yourself is a little cheaper.
2. Get a Tax ID Number
This is also called an EIN (Employer Identification Number). It’s like a Social Security number for your business. Your business can now accept checks and other payments. Once you have your LLC and your tax ID number, you can take those two things and go to the bank for the next step.
3. Open a Business Bank Account
When you open your account, put down your initial deposit, whatever that is — $1,000, $5,000, or $10,000. Going forward, deposit all payments to this account. And for any business expenses that you incur, use the debit card that’s attached to this account. It will keep your paperwork much easier and more manageable. But the first thing you should do with your money is step 4.
4. Get a DOT Physical (and Your Medical Card)
When you get this DOT physical, you’ll be issued a medical card. This means that you are cleared to drive commercial motor vehicles and certifies that you can handle the work required.
5. Get a CDL (Commercial Driver’s License)
While a CDL isn’t required for hotshots, you must obtain a CDL in any of the following situations:
- You operate a vehicle with a GVWR of 26,001 pounds or over, or any such vehicle towing another not exceeding 10,000 pounds.
- You operate vehicles with a GCWR (gross combined weight rating) of 26,001 or more pounds, as long as the GVWR (gross vehicle weight rating) of the vehicle being towed is over 10,000 pounds.
6. Get Your MVR (Motor Vehicle Record)
Your MVR is a report of your driving history as reported by your state. It’s good to know how good (or how bad) your driving record is when you apply for insurance, as they will tend to ask questions about your driving record. An MVR is also required for any business, in case you get audited. You have to prove that the person is eligible to drive, even if it is yourself. To get your MVR, you have to pay a small fee. It used to be free, but now expect to pay around $10-20.
7. Get TWIC-Transportation Workers Identification Credential
This means you’ve passed a background check, which is helpful when you lease on. A TWIC also comes in handy if you’re planning to do a lot of pickups or deliveries on ports or military bases. It’s an excellent piece of ID to have along with your passport (as your second form of ID).
8. Get Permission From the Federal and State Government
Permission from the state government comes in the form of applying for and being issued a United States DOT (Department of Transportation) number. Permission from the federal government to haul freight in the US comes in the form of applying for and being issued an MC (Motor Carrier) number. You need both US DOT and MC numbers on the side of your truck.
Each of those two has a ton of requirements that need to be met in order to be active or to be able to haul loads continually. You can fulfill the federal and state governments’ requirements in two ways. One is quite hard; the other is fairly easy:
- You Can Get Your Own Trucking Authority (hard). You could choose to go through the entire paperwork process of getting your own US DOT number and MC number for the LLC that you created in the first step. That’s a more challenging route to follow. Very few people should be going this route just because it is a lot of work.
- Lease On to Someone Else’s Authority (easy). You could have the permission of a different company that already has its own US DOT and MC number. How can you use their US DOT number and MC number? Well, it’s called “leasing on.” They lease your truck. And because they’re leasing your vehicle, they can put their numbers on your truck. Most companies will charge for this privilege, but this is the easier alternative.
9. Obtain Your Trucking Equipment
This is pretty self-explanatory. Get whatever truck and trailer you want to get. If you want to get a non-CDL hotshot, then maybe get a single rear wheel pickup with single tandem 7,000-pound axles. But make sure you are rated below 26,001 pounds. If you want a CDL hotshot, make sure your dually pickup truck can pull your dually tandem trailer.
The Bottom Line
So those are the nine steps. Follow them in the right order. Remember, permission should come first. So, wait until you have your DOT and MC numbers before getting your truck. Now it’s fine to get your MC number and then the next day buy a truck. But this is the way to get started. Follow all the nine steps in the right order. This is how to get into the hot trucking business.