Launching A Trucking Company In New Brunswick

Starting a trucking company in New Brunswick involves several steps, from conducting preliminary research and creating a business plan to obtaining the necessary licenses, permits, and insurance. Here's an introduction to guide you through the process:

First, it's essential to have a clear understanding of the trucking industry and the specific requirements for operating in New Brunswick. This includes researching the local market, understanding the capital requirements, and familiarizing yourself with the necessary regulations and compliance standards.

The next step is to create a comprehensive business plan. This plan should outline your company's goals, target market, financial projections, and operational strategies. It will be crucial for securing funding and registering your business.

Once you have a solid business plan in place, it's time to choose the appropriate business structure, such as a Limited Liability Company (LLC) or corporation, to legally establish your company. This step involves registering your business, obtaining an Employer Identification Number (EIN), and appointing a registered agent to handle legal and tax-related matters.

After that, you'll need to obtain the necessary business licenses, permits, and insurance. This includes complying with local and federal regulations, such as obtaining a commercial driver's license (CDL) and any required endorsements, as well as specific permits and insurance policies unique to the trucking industry.

With the administrative aspects in place, you can then focus on acquiring the right equipment, including purchasing or leasing trucks that meet the needs of your intended cargo.

Additionally, establishing a robust fleet management process will help optimize your vehicle performance and reduce operational costs. This involves meticulous planning, coordination, and execution of vehicle acquisition, maintenance, tracking, and disposal.

Lastly, finding customers and building relationships with shippers will be vital for the success of your trucking company. Utilizing load boards, networking, and marketing strategies will help you secure freight transportation opportunities and establish a solid customer base.

By following these steps and staying compliant with the relevant regulations, you'll be well on your way to establishing a successful trucking company in New Brunswick.

Write a business plan

To start a trucking company in New Brunswick, you'll need a solid business plan. Here are some key components to include:

Executive Summary:

This is a brief description of your company and yourself. Why are you starting a trucking company? Showcase what sets you apart from competitors. This section can be written last, after you've fleshed out the other parts of your plan. Consider hiring a professional writer or editor to polish this section.

Company Description:

Provide a detailed introduction to your company, including your background, experience in the trucking industry, and what sets you apart. Outline your specific niche or focus within the industry and any unique partnerships or connections you bring to the table.

Services Offered:

Describe the type of business you will be involved in within the trucking industry and how you will execute it efficiently. Include information on the various price points and industries you will serve.

Market Analysis:

Conduct a thorough analysis of your target market, including the type of freight you plan to haul and your competitive advantage. Identify your target customers by examining your current client base and that of your competitors. Understand industry trends and demonstrate that you have done your homework to set yourself on the path to success.

Sales and Marketing Strategies:

Outline your sales and marketing strategies, including how you plan to advertise (cold calls, social media ads, etc.) and secure sales (set pricing, individual quotes, etc.). Discuss your sales team structure and compensation plans, whether it's a salary or commission-based.

Funding Requests and Financial Projections:

Detail the funding you project needing to get your business off the ground, including equipment purchases, overhead expenses, and employee salaries. Provide a breakdown of where the money will go and why. Include financial statements that summarise your assets, liabilities, and equity. Include profit-loss statements and sales and cash flow forecasts.

Management and Personnel:

Explain your approach to hiring, including your hiring process and onboarding procedures. Outline your plans for retaining qualified drivers in a competitive market. Discuss whether you will hire management or other personnel to help run your business.

Legally establish your company

To legally establish your trucking company in New Brunswick, you will need to take several steps to ensure compliance with federal and provincial regulations. Here is a detailed guide to help you through the process:

Choose the Right Legal Structure

Selecting an appropriate legal structure for your trucking company is crucial as it determines your tax obligations and the extent of your personal liability. Given the inherent risks in the trucking industry, it is generally recommended to choose a structure that offers a separation between your personal and business liabilities. A Limited Liability Company (LLC) or a corporation can provide this protection. An LLC also offers the benefits of reduced paperwork and flexible ownership structures. Alternatively, you can explore other structures such as an S corporation or a C corporation, which are more common for larger businesses.

Register Your Business

The process of registering your trucking company will depend on the province's requirements. In most cases, you will deal with a government body such as the Secretary of State's office, Business Bureau, or Business Agency. You will need to provide your chosen business name, which should be unique and memorable. Consider using a database like the Central Analysis Bureau to ensure your chosen name is available. Keep your business name short, easy to pronounce, and reflective of your brand and values.

Obtain an Employer Identification Number (EIN)

An EIN is like a social security number for your business. It is a nine-digit number required to open a business bank account and must be included in all tax filings. You can obtain an EIN from the Internal Revenue Service (IRS).

Appoint a Registered Agent

Most states require you to appoint a registered agent, who serves as the point of contact between your business and the state. The registered agent must be available during business hours to receive legal notices, state mandates, tax documents, and other official communications. This role is critical to maintaining your company's good standing with the state and ensuring you are aware of any legal proceedings.

Obtain Necessary Licenses and Permits

To operate a trucking company, you will need to obtain various licenses and permits from the Federal Motor Carrier Administration (FMCSA) and your provincial government. These may include a USDOT number for federal safety monitoring and audits, an Operating Authority (MC number) to haul across state lines, and participation in the Drug and Alcohol Clearinghouse for pre-employment drug screening. Additionally, if you operate in multiple states, you will need credentials from the International Registration Plan (IRP) and decals from the International Fuel Tax Agreement (IFTA) to simplify fuel tax payments.

Purchase Appropriate Insurance Coverage

Trucking companies require comprehensive insurance coverage to protect their business interests. Some essential types of insurance to consider include general liability, primary liability, physical damage, non-trucking liability, and cargo coverage. When choosing an insurance policy, look beyond the initial cost and ensure the coverage meets your needs. Insurance is a significant expense for trucking companies, but you can reduce costs by employing experienced drivers, using newer equipment, and avoiding high-risk areas.

Open a Business Bank Account

It is highly recommended to open a dedicated business bank account to separate your personal and business finances. This account will also help build your company's credit and protect against identity theft. To open the account, you will need your EIN, articles of incorporation, ownership agreements, and business license.

Prepare for Taxes

Familiarize yourself with the various tax obligations for your business, such as self-employment tax and income tax. If you plan to hire employees, there will be additional tax implications. Taxes can vary by province and municipality, so consider consulting a tax professional familiar with the trucking industry to ensure compliance. Additionally, be mindful of tax-deductible business expenses, such as meals, lodgings, tools, fuel, retirement plans, licensing fees, and professional services.

Stay Compliant with Regulations

Compliance is a critical aspect of operating a trucking company. Stay up to date with paperwork and regulations to maintain good standing with federal and provincial authorities. This includes IFTA quarterly tax returns, state-specific regulations such as hours of service and cargo rules, and CDL renewals. Create a business calendar and set up automatic reminders to stay on top of deadlines and renewals.

Get the right licences and permits

To start a trucking company in New Brunswick, you'll need to obtain several licences and permits to ensure your business operates legally and complies with regulations. Here's a detailed guide to help you get the right licences and permits:

International Registration Plan (IRP)

If your truck weighs 26,000 pounds and crosses state lines, you must obtain an International Registration Plan (IRP). This allows your truck to operate in all states and some Canadian provinces. The IRP is a registration reciprocity agreement among states and provinces in the U.S. and Canada. It ensures that you only need to register your truck in your home jurisdiction, even if you operate in multiple jurisdictions.

International Fuel Tax Agreement (IFTA) Decal

The International Fuel Tax Agreement (IFTA) is a fuel tax collection system for interstate and international commercial vehicles. It simplifies the reporting of fuel use and payment of fuel taxes. You'll need to obtain an IFTA licence and display the IFTA decal on your truck if you operate in multiple jurisdictions.

Unified Carrier Registration (UCR)

The Unified Carrier Registration (UCR) is an annual registration and fee system for motor carriers operating in participating states. It replaces the former Single State Registration System (SSRS). The UCR ensures that motor carriers comply with financial responsibility and safety regulations.

Motor Carrier Operating Authority (MC number)

You may need to obtain one or more Motor Carrier Operating Authority (MC) numbers, depending on your business operations. The MC number is a unique identifier assigned by the Federal Motor Carrier Safety Administration (FMCSA). It authorises your company to provide interstate transportation of goods or passengers.

Commercial Driver's Licence (CDL)

Ensure that your drivers have a valid Commercial Driver's Licence (CDL). The CDL is required by federal law for drivers of commercial motor vehicles. Contact the licensing agency in your state for more information on obtaining a CDL.

USDOT Number

Obtain a USDOT number from the Federal Motor Carrier Safety Administration (FMCSA). This unique identifier is used to track your company's safety information during audits, inspections, and investigations. It ensures your company complies with safety regulations.

BOC-3 Filing

Designate a process agent to file Form BOC-3, or Blanket of Coverage, with the FMCSA. This form establishes that you have designated an agent to receive legal documents on your behalf. Only one Form BOC-3 can be on file, and it must cover all states where agency designations are required. Retain a copy at your principal place of business.

State-specific Filings

In addition to the above, there may be state-specific filings and permits required for your trucking company in New Brunswick. Consult the relevant government websites or seek advice from a business advisor familiar with the trucking industry in New Brunswick.

Choose the right truck

Choosing the right truck is an important step in starting a trucking company. Here are some factors to consider when selecting your commercial truck:

• Cab style: Decide on the style of cab that you prefer.
• Dealerships: Opt for a truck manufacturer with multiple dealerships across the US, especially if you plan on doing long-haul routes. This will ensure easier access to repairs and maintenance.
• Route type: Consider whether you will be operating locally or long-distance, as this will impact the make and model of the truck that is best suited for your needs. For example, Kenworth and Peterbilt trucks are recommended for long-haul routes due to their comfort, performance in bad weather, and good dealership network. In contrast, Freightliner trucks are a popular choice for short-haul routes as they are less expensive, lighter in weight, and have fewer breakdowns.
• Emissions testing: Determine if the truck needs to meet emissions testing requirements.
• Load weight: Evaluate the weight of the loads you will be hauling to ensure your truck can handle the capacity.
• New or used: Decide whether to buy a new or used truck, considering your budget and preferences. Used trucks may be more affordable but may have higher maintenance costs.
• Buying or leasing: Weigh the pros and cons of buying versus leasing a truck. Buying a truck outright requires a larger down payment but gives you full ownership and no monthly payments. Leasing may have lower upfront costs but entails regular payments, mileage restrictions, and maintenance of the truck's condition.

It is essential to carefully consider your specific needs and preferences when choosing a truck for your trucking company. Conduct thorough research, test drive different trucks, and seek advice from experienced truckers or industry professionals to make an informed decision.

Secure startup funding

Starting a trucking company in New Brunswick will require a significant amount of startup funding. A commercial truck costs around $80,000, and there are various other expenses to consider, such as registration, documentation, business permits, licenses, truck maintenance fees, and trucking accounting software. According to the Small Business Administration, trucking and transport companies take out an average loan of $106,000. Therefore, securing external funding is often necessary to get your trucking business off the ground. Here are some options to consider for startup funding:

• Small Business Loans: Small business loans can provide the necessary capital to maintain a fleet of trucks, hire drivers, and update logistics. These loans can be used to cover various expenses, including maintenance costs, registration and certification fees, business insurance, and driver training. National Funding, for example, offers small business loans ranging from $5,000 to $500,000.
• Equipment Financing and Leasing: Equipment financing loans are a great option for purchasing or leasing new or used trucks or repairing existing ones. Lenders provide funding based on a quote for the required equipment, and the truck serves as collateral if you fail to repay the loan.
• Commercial Truck Financing: Commercial truck financing is specifically designed for buying or leasing trucks or covering repairs and upgrades. This option may have more flexible repayment terms and could be easier to obtain than a traditional small business loan.
• Business Term Loans: Business term loans provide a lump sum of money to be repaid over a set period. They may have higher interest rates and shorter repayment periods than SBA loans, but they are also easier to obtain and can provide quick access to capital.
• Grants: Grants are a form of financial aid that does not need to be repaid. They can be challenging to secure and often have a lengthy application process, but they are worth considering. Some grants to look into include the SBA 8(a) Business Development Program, FedEx Small Business Grant Contest, NASE Growth Grants, USDA Rural Business Enterprise Grants, and the Nav Small Business Grant. Additionally, there are grants specifically for female truckers and those with a history of military service.
• Fuel Cards: Fuel cards are accepted at most gas stations and offer rebates that can add up over time. They can help you manage fuel and minor vehicle repair expenses.
• SBA Loans: The Small Business Administration (SBA) offers various financial assistance options, including the SBA 7(a) Loan Program, which provides access to up to $5 million in financing. The SBA guarantees up to 85% of loans up to $150,000, and their loans typically have low-interest rates and generous repayment terms.

When seeking startup funding, it is essential to have a well-prepared business plan, a good credit score, and a clear understanding of your financial needs and loan usage requirements. You should also be prepared to provide financial documents and meet the lender's qualification criteria.

Frequently asked questions