How Much Does It Cost To Start a Trucking Business? Examples

Are you looking to start your own trucking business? As part of your business plan, make sure to consider all the startup and operating costs to start and run a trucking business.

How much does it cost to start a trucking business? And how much does a trucking business cost to run on average? Is this profitable?

We’ve identified that it costs anywhere from $208,000 – $343,000 to start a $280,000 monthly revenue trucking company with 9 semi trucks, plus $232,000 – $259,500 in operating costs per month to run the business the first few months.

Want to know more? In this article we’ll go through all the different costs you will need to budget for before you can open your own cleaning business. Read on!

For more information on trucking businesses, make sure to read our guides below:
How To Start a Trucking Business in 10 Steps
How To Build a Financial Model For a Trucking Business

Trucking Business Startup Costs

Trucking businesses are capital heavy, meaning they require a significant investment upfront to acquire the fleet (vehicles) before you can start to do business.

There are 2 types of costs: startup costs and operating costs. First, let’s have a look at the startup costs: the expenses you must pay for before you open your business. Operating costs, instead, are the expenses you pay for each month to run the business later on.

The startup costs depend on a number of factors, for example the number of trucks you plan to operate. Therefore, we have laid out below a clear overview of all the key costs you can expect to start a small (9 trucks) trucking business.

Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you.

Startup costAmount
Fleet acquisition *$135,000 – $270,000
Office & warehouse lease deposit (optional)$10,000 – $20,000
Licenses & certifications$18,000
Business insurance$45,000
Total$208,000 – $343,000
* Assuming you need to provide 10-20% upfront for a $1,350,000 loan (9 trucks)

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Trucking fleet acquisition costs

By far the largest expense for any trucking business is the acquisition of the fleet itself.

The type of freight you intend to transport will determine the type of equipment you require. How powerful must the truck engines be to handle the loads they’ll be pulling? What kind of trailer capacity do you need? Do you require flatbed, refrigerated, or normal trailers? How about auto hauler trailers?

Also, decide whether whether to buy or lease the trucks, in short:

  • With leasing, you will effectively rent the trucks to a company for a long period of time (a few years). Typically the lessee (you) will own the trucks at the end of the rental agreement. Whilst you don’t need to pay for a large amount upfront, you will need to pay for the monthly lease payments, with interest.
  • If you decide to buy instead, you will likely need a loan. Whilst the lending conditions vary by lender, you will still need to provide a significant loan downpayment upfront (usually 10% to 20%). As for leasing, you will need to pay back the loan, each month, with interest.

When it comest to the acquisition cost itself, the average cost of a new semi-truck ranges from $100,000 to $200,000 depending on the type of vehicle. 

Even the most affordable second-hand semi-truck will cost you a minimum of $35,000 and up to $180,000 for the high-end models with all the extra features.

So, assuming you purchase 9 new semi trucks at $150,000 each and you take on debt at 15% downpayment, you’ll have to pay upfront $202,000 out of the total $1,350,000 acquisition cost.

A new semi-truck costs on average $100,000 to $200,000

Office & warehouse lease deposit (optional)

This expense isn’t necessary for all trucking small businesses.

Indeed, if you operate as an owner-operator who hires 2 to 6 subcontractors as drivers, you might not need a separate office and warehouse for your fleet operations. In this case, your residence for your office operations and an outside (private) parking lot will do the trick.

Instead, if you operate a fleet of more than 6 trucks and operating daily, the fleet operations and administrative functions like HR and finance may require you to get an office and a separate team.

In any case, the upfront cost for the office & warehouse (the lease deposit) shouldn’t be significant for most small businesses. It’s simply a function of your office (and/or warehouse) space and the lease rate.

Let’s first assume you rent a 6,000 sq. ft. commercial space with a small office for 9 trucks in an industrial area. Now, assuming you pay the $6.59 average rental price per sq. ft. for industrial space in the US, the 3 to 6 months refundable deposit would cost you $10,000 to $20,000.

Large-scale trucking businesses often need a separate warehouse and office area

Trucking licenses & certifications

As you launch your new trucking business, there are various federal and state regulatory issues to take care of. 

  • Obtaining your USDOT number and permission from the US Department of Transportation to operate beyond state lines
  • If you want to operate in numerous states, obtain International Fuel Tax Agreement (IFTA) stickers for your trucks
  • Create a BOC-3 file to name the process agent for your business in the event of any judicial actions

Additionally, you should ensure that your trucks have the proper licenses and are aware of and follow all applicable health and safety rules.

Here are the related costs that you need to incur:

  • IRP (International Registration Plan) plates per truck costs $500 to $3,000 on average
  • A permit and the heavy vehicle use tax average cost between $100 and $600 
  • The state-specific tax would cost, on average, $500 per truck
  • The UCR fee depends on the number of vehicles: up to 2 vehicles costs $69, up to 5 vehicles $206, etc.
  • Getting a CDL will cost between $3,000 – $7,000 for driving school and around $150 – $200 for CDL registration fees

In total, and excluding your CDL license (assuming you already have it), the total expenses for starting a new trucking business licenses for 9 trucks is about $2,000 per truck so $18,000 total.

Trucking business insurance costs

Every owner of a business must have insurance. However, it’s even more important for trucking company owners.

You will require a variety of insurance policies, including cargo coverage, physical damage coverage, and primary liability coverage. 

You should also have coverage for non-trucking use. This type of policy will protect you if your truck is involved in an accident while you or another driver is not transporting a load for a client.

On average, the annual insurance premium can go up to $10,000 per truck, depending on its condition. The type of coverage, the car’s make, model, year, and condition are all factors that affect the premium amount.

Assuming you purchased new semi trucks, the insurance premium should hopefully be much lower. Set aside anywhere around $5,000 per year per truck, so $45,000 total for 9 trucks, payable upfront.

Trucking business insurance can go up to $10,000 per truck

Trucking Business Operating Costs

In addition to the startup costs discussed above, there are a number of important expenses you should also budget for to run your trucking business.

How much does it cost to run a trucking business? What expenses should you budget for?

As you would expect, by far the biggest chunk of your costs are variable costs that are a function of the number of miles your trucks drive each month. From fuel, taxes, tolls and driver wages, let’s now have a look at the key expenses you should budget for in your business plan to run a trucking company.

Operating costAmount (per month)
COGS (fuel, repair, tolls, brokers)$160,000 – $180,000
Drivers’ wages$50,000
Leasing or debt repayment$20,000
Rent (optional)$0 – $4,500
Other (legal, bookkeeping, etc.)$2,000 – $5,000
Total$232,000 – $259,500

Get a rock-solid business plan with the Trucking financial model

  • 5-year financial plan already built
  • 20+ charts for your business plan
  • Video tutorial 🎥
  • 5,900+ downloads

Trucking COGS (fuel, taxes, tolls, brokers)

COGS stand for Cost of Goods Sold and refer to the expenses of any business that are variable in nature (unlike fixed costs) and appear above Gross Profit in your income statement.

There are a number of costs to take into consideration, they are:

Fuel costs ($0.4 – $0.5 per mile)

With salaries (more on that later), fuel is the largest expense for all trucking businesses. Per mile, it represents on average $0.40 to $0.50. Yet, with the recent increase of fuel costs in 2022, the cost per mile now average $0.55 to $0.65 instead.

Repair & maintenance costs ($0.09 – $0.40 per mile)

In addition to fuel, you should also budget for the regular checkup and maintenance cost for your trucks. On average, it costs $0.09 to $0.40 depending on the vehicle’s model and condition.

Tolls ($0.15 per mile)

Unlike gas, tolls is sometimes overlooked. Yet, tolls are also a major cost for any truck business, especially if you operate across state lines. On average, you should expect to pay around $0.15 per mile.

Brokers fee (15% of total revenue)

With the complexity of short and long distance fleet management today, brokers have become necessary for most trucking companies today. Freight brokers connect shippers with carriers (the trucking companies).

For shippers, brokers can reduce complexity by finding drivers for their loads in no time.

For the trucking companies, brokers provide new business leads, helping them keep their trucks on the road. They’re even more important that they will allow you to cut down deadhead to a maximum, effectively reducing operating costs.

On average, freight brokers charge 15% to 20% of the total price to the shipper, which is inherently passed on to the carrier.

So assuming you charge on average $3.00 per mile as a carrier, you should spend in total $1.36 in COGS per mile (about 45% of your total revenue). Now assuming each truck drives on average 15,000 miles per month, you would be grossing around $280,000 in revenue per month total (135,000 miles, plus 30% deadhead). 

Out of these $280,000, you would be paying around $160,000 to $180,000 back in COGS for fuel, tolls, freight brokers and maintenance costs.
Drivers’ wages and fuel represent about 60% of total expenses

Drivers’ wages

Salary expenses for the drivers are often included within COGS as well (like so in our trucking budget template), yet for simplicity we separate them in this article.

It’s all the more true for trucking companies that hire drivers not as employees but subcontractors instead (they invoice the company but aren’t considered as employees, giving more flexibility to the company when there is seasonality for example).

On average, you should pay between $0.28 to $0.40 per mile for drivers’ pay, including taxes and benefits. The pay typically depend on the route(s), the experience of the driver and the type of freight.

Assuming you pay an average of $0.35 per mile for your drivers, using the same $280,000 monthly revenue example above, you should set aside $50,000 per month for your 9 drivers (including taxes and benefits)

Leasing or debt repayment costs

Whether you decided to purchase the trucks with a bank loan or to lease them instead, you will need to pay back the loan or the lessor each month.

Now, let’s assume as explained earlier you purchased 9 trucks worth $1,350,000 with 85% of debt ($1,150,000 total) with a 5.50% SBA loan over 8 years, you would be paying back around $20,000 in debt and interest each month.

Rent (optional)

As explained earlier, not all small businesses operating a few trucks will require a separate parking, warehouse and office space. This is more true for large-scale trucking businesses with 6 trucks or more

Using the same example above with a 6,000 sq. ft. commercial space for a small office and parking space for 9 trucks in an industrial area, rent should cost you around $3,500 to $4,500 per month (including utility bills).