Now that we have established the equipment and tools that you will need to be a ltl or hot shot transporter, it is time that we look at the business end of this. If you cannot manage the business end of it, you either need to hire someone who can, lease on with someone so they are taking care of it, or do something else altogether.
There is a lot of money to be made in the trucking industry and it continues to grow day by day as more people require all types of goods. That being said, there is a lot of money to be lost if you do not plan trips ahead and closely manage fuel and maintenance costs as it is very costly to be any kind of transporter and MANAGEMENT IS IMPERATIVE.
Step one, know YOUR limits and the limits of your equipment. You can only do what you can do! If you try to overload yourself or your equipment, you will soon be facing downtime, mechanical issues, and worse yet, personal injury or injury to others so stay legal, run legal, and most of all BE SAFE! the motoring public is counting on you to do so.
When you get your DOT and MC numbers and permits you are constantly under the scrutiny of a large number of federal agencies and you must keep all of your logs, bills of lading, permits, etc. organized and ready for audit as it will make the audit process much easier on you and the auditor.
During the bidding process for a load be sure to factor in tolls as if you book a load tightly without factoring in tolls especially in New York, you will lose money very quickly. Plan your routes and know the cost of running that lane.
Plan for maintenance as you WILL have mechanical issues come up. As a rule I figure .12 cents per mile for maintenance, tires, oil changes and the occasional part failure. This number might vary with different types of equipment but regardless, it needs to be set aside and only touched for maintenance events. As it builds and you have a good reserve in that account you can roll it into equipment upgrades.
Now, factor in the actual cost of fuel per mile. To do this I look at the highest fuel prices in the United states and work my average from it rather than using the daily national average. I do it this way as I find it is better for me when booking ahead of time as fuel prices constantly change and can seriously affect your bottom line. It can also give you some leverage when running states with lower fuel averages.
Now for the hard part, figure the average cost per mile it will cost you to STAY LEGAL, such as tags, permits, your required insurance, bookkeeping, etc. These will all likely be fixed monthly costs but must be figured at a cost per mile average so you will know exactly what your costs are.
The aforementioned items will give you the base cost just to move your equipment legally down the road.
It is now time to look at how much YOU need per mile to haul this load, which will be up to you and the area you live in and the lanes you will run, i cannot tell you in this blog what you need to make per mile over costs, but you cannot and will not make exactly the same profit on each item and each load.
Remember that dead head (unloaded) miles cost you money so it is imperative that they be minimized and factored into your costs.
Remember that you are building a business and you must stay on top of it or it will quickly become overwhelming to you. Properly managed this is a very lucrative business and it is our hope that you will grow steadily and have a great future as an independent hot shot transporter.
Thank you, and the best of luck as you embark on your new journey.