Majority of the cargo that is shipped within the United States is done through trucks. This constitutes close to 75% of the total shipments. It can be said that shipment through trucks constitute the major part of delivering goods from one place to another.
Shipment through truck generates a revenue of $726.4 billion and creates an employment of 8.9 million people. These 8.9 million are employed directly or indirectly through truck related jobs.
Close to 3.5 million people are truck drivers and 1 out of 9 are independent truck drivers who own their own truck and operate as independent contractor of shipments. One thing can be said clearly that this field generates huge revenue and jobs and is very competitive in its domain.
Major chunk of US economy is dependent on these truck drivers who transport freight from their origin to the destiny. All these shipments have their own priority. Some of these freights are to be delivered as quickly as possible while others are delivered at a standard pace.
Hot Shot Trucking: A Different Model of Trucking
Hot Shot Trucking business is a unique model of trucking where shipments are delivered on priority basis within a limited time period. These shipments are special in nature and are hauled by special designed trailer especially made for these shipments.
Hot shot trucking is therefore different from the traditional truck shipment as it has its own specialization and shipments are taken to meet the objectives on priority basis and within the required time frame.
Most of the shipments that are hauled are small in size and are time sensitive. Delivery period generally ranges from 6 hours to 16 hours and can extend as per requirement. These deliveries are special in nature and therefore are different from regular truck loads.
Major shipment companies employ traditional trucks for shipment but for special cases they hire hot shot trucks to deliver goods based on priority.
Hot Shot Trucking: Mulling to Start your own Business?
Hot shot trucking in itself is a great source of income and employment. Most journeys of truck have their time limits and you don’t need to be far from your home for longer duration. Though the amount of distance you cover is short yet it extensive and can take a toll on you both physically and mentally.
Hot shot trucking is also money generating business as it is time sensitive and specialized shipment delivering mechanism. Therefore you earn a good sum from this business which is usually $2 for each mile and the rate can deviate from 1.5 to 2.5 dollars per mile.
If you are covering 2000 miles a week then you would be earning $16000 a month exclusive of taxes, fuel, and repair cost, etc. That is in itself a good earning for starters.
You will be required to do all the documentations, owning your truck, getting the required permits, licenses and insurances along with a trailer on which you will load the cargo.
There is some amount of investment in the initial stage but after a time you will get good returns as you proceed ahead with your business.
Independent Truck Versus working with a Trucking Company
Whether you want to own a truck and start independent or you want to get associated with a trucking company that hires you as truck driver to do their job? The answer depends on you along with your condition.
If you are inexperienced and want to know in details about this industry then the best choice will be to sign up with a trucking company. There are few advantages you will have. These are:
- You will be well assisted by the company and its employees
- You will be regularly employed and will be paid for each trip you make
- You don’t generally need to own your own truck and manage things
- It will be a learning experience for you and you can easily understand the pros and cons of trucking
- Since you won’t be owning your own truck and are employed as just a truck driver, you will be paid substantially low than an independent driver
- Your area of operation will be limited and the administrative work will be something which you will not be part of
On the other hand independent truck drivers also face both advantages and disadvantages of being independent.
- Since you will be owning your own truck and have direct contract therefore your earnings will be higher
- You can work based on your own comfort and requirements and would not be subject to the fancies of your employer
- There is real learning experience along with lots of responsibilities
Some cons of independent trucking is your inexperience with driving. You will be much more responsible and have to bear direct consequences of any mishap that happens.
The middle path between both is to work in the initial days for some other trucking company and after you have gained enough experience and money you can go independent.
Working Routes, Demography and Work Hour
You can make up your mind and decide which route will be suitable for your journey. You can choose a series of routes that are lucrative in nature and also offers comfort to you. It should also be not far from your home.
It is obvious that you will choose to work close to your home so that you don’t remain very distant from your home. Hot shot trucking generally has to cover a small distance in comparison to regular trucking.
Generally a work hour of 8-16 hours is common in this and it can extend subject to conditions. Your choice of location, the condition of roads, traffic, and etc. do creates a difference.
Selecting the Right Niche for your Business
If you have chosen to be an independent hot shot trucking business then you also have the freedom to choose the right niche for you. The niche determines the loads you would be hauling.
There are some common niches from which you can make a choice. They are:
- Commercial Hot shot Business
- Medical Hot shot business
- Agricultural hotshot business
- Spare parts hotshot business
- Manufacturing hotshot business
- Heavy duty cargos
- Light weight cargo and
- Perishable goods cargo
All of them have their own demand, responsibility and methods of hauling. Perishable goods are required to be delivered with much more care and are extremely time sensitive. These items are also rewarding and you will paid a hire amount for delivering them.
Mobilizing Resources for your Business
The hotshot business requires lots of efforts and resources mobilization which is not that easy and simple. You need to have a truck fitted with the right trailer along with various other components.
You may face other challenges as well but these are some common ones.
- Getting a truck and trailer
- Fuel container for emergency
- Trailer hitch
- Cargo straps, chains, tie down and pad
- FMCSA requirements and documents
- Internet, mobile and computer along with GPS connection
- Maintenance of truck and trailer
- Managing the required fuel
- Registering your business
- Financing the business
- Getting your vehicle insured
- Applying and obtaining license and transport number from Department of Transport
- Obtaining all the required legal documents
It is also possible that you may not get any work on few days of the week. Sitting idle can be the last resort without any income. These are challenges for which you need to prepare yourself and manage things accordingly.
Challenges and their Solution
Managing Legal Documents
Registering your business requires legal documents that you need to obtain from various authorities. Driving license for heavy motors, proper certification, all the documents and invoice of your vehicle, permit for traveling in several regions of United States, pollution check certification, etc.
You can opt for a limited liability company since it works as a buffer between you and the liabilities that can be entailed on you.
Some of these documents can be summarized as:
- Vehicle Permit
- Vehicle for service permit
- Business license
- Proof of Insurance
- Driver’s form
- BOC 3 registration
- Unified carrier registration
- Federal DOT inspection
- Commercial driver’s license
Insurance of your Business
Since a large amount of capital is involved in your business and any loss can have trivializing impact on your business therefore it is wiser to get your business insured to save yourself from liabilities.
There are lists of insurances that you can opt for regarding your business. They are:
- Non-trucking liability
- Primary liability
- Motor truck cargo insurance
- General liability insurance
- Trucking physical damage insurance
- Freight surety bonds
- Occupational accident insurance
- Workers compensation insurance
- Umbrella or excess liability insurance
- Trucking employment practices liability insurances
Finding your Clients and work
As you are prepared with your truck and trailer to haul up loads it is time to search for clients and works. Who is going to provide you with loads or new consignment?
If you have worked earlier in in one such hotshot truck business then it would be better to start building your contacts from there only. It is obvious that you will be in contacts with many of your colleagues and clients.
Build good contacts with them and get into a deal with them. Offer some discounts and be a bit more personal in order to build good relationships. They are the ones who will be providing you with work for your business.
Secondly, you can team up with such hotshot truck companies who hires truck and drivers both for their contract. In your early days there is good chance that you won’t be getting any work but with passage of time you will eventually get new consignments.
Lastly, you can also bid on some of the known portals for new consignment based on your capabilities and if things go fine you may be assigned with new work.
Some of the load board providers are:
- Hotshot Carrier
- Trucker’s Edge
- Central Dispatch
- Expedite Loads
Financial Aspects of your Business
How will you manage you finance is the question that requires a longer mulling and is even a big source of trouble for all passionate entrepreneurs. Hotshot trucking requires if not huge yet a decent investment.
At first hand you need a truck and trailer along several other tools and utilities. Electronic gadgets, internet, GPS, legal documentation, permit, registration, etc.
You will also be required to manage the expense of your travel which includes fuel cost, maintenance of vehicle, food, clothing, Medicare, etc.
Either you can go with the general expense that will entail for your business or you can choose a concise way which can reduce some avoidable expense. The choice is always yours.
You can reduce the expense by leasing a truck and trailer instead of purchasing it. This is a good way to save initial expenditure. Certain driving methods and care taken on road can avoid unnecessary expenditure of travel.
In order to manage you finance you can use your saved money or you can take a loan from the bank. Getting credits from third party should be avoided as such credits can be source of trouble for you.
The best way for you is to lease a truck in the initial days or working just as a driver in any of the hotshot trucking company, secure a good some of money and then start your own business by owning your own truck and trailers.
This can avoid taking loan and any chance of liability.
Growth Prospects of your Business
Growth is the essential of human life. After you have started your business and it is going well it is also necessary for you to think about the future. The immediate future and the far future related to your business.
Do you aim to remain a single driver business or do you aim to expand your business further?
Such questions will pop up in your head and you need to think about the perfect answer. Growing your business is the best choice and it can be done gradually as you start to make respectable returns from your trucking business.
You can hire a driver and purchase a truck to get more loads for hauling. There is no such necessity to remain in this field only. You can choose any other business if that convinces you. But if you are getting some good loads from clients then do utilize such opportunities to grow your business.