How To Start A Box Truck Business In 5 Steps
There’s a lot of work for box truck drivers, but to start getting paid, you need to know how to start a box truck business. This guide can help.
Not all truck drivers need a big rig. With the continuing boom in e-commerce, there’s a near limitless market for smaller deliveries—the kinds of loads you can easily handle with a box truck.
So what exactly is a box truck? A box truck is a vehicle with a cuboid storage area attached to the chassis; it is one piece, not a power unit with a trailer. WIthin the Federal Highway Administration’s truck classification system, most box trucks are considered medium duty, ranging from Class 3 (10,001 pounds to 14,000 pounds of gross vehicle weight) to Class 6 (19,501 pounds to 26,000 pounds). Larger box trucks may fall under the Heavy Duty range, up to Class 7 (26,001 pounds to 33,000 pounds).
These trucks find a middle ground between storage capacity and the ability to navigate urban roads. While last-mile delivery services may opt for the smaller sprinter vans, box trucks are equally adept at moving cargo within local boundaries and between them.
A box truck business has a lower barrier to entry than jumping into a semi truck, mostly because driving a box truck does not require a commercial driver’s license (CDL). That allows you to start hauling freight—and getting paid—without the lengthy (and costly) process of obtaining your CDL. Whether you plan to launch a whole fleet, work as an owner-operator, or just set up a weekend side-hustle, here’s how to start a box truck business in five simple steps.
How To Start A Box Truck Business: The Five-Step Process
1. Start your business on paper.
From the government’s perspective, your business doesn’t exist until it’s registered. You’ll need to do a bit of paperwork before you start hauling loads. Here are some of the business-creation tasks to complete as you start your box truck business:
- File for an Employer Identification Number (EIN). This is your federal tax ID, something like a social security number for the business. Here’s where you set up the legal structure of your business. If you’re driving on your own, you can organize as a sole proprietorship. If you plan to grow a fleet, you might be better off incorporating as an LLC. Apply for your EIN through the IRS online portal, or do some preliminary research with the U.S. Small Business Association (SBA).
- Register the business with your state. Once you get your EIN, you need to establish your business, officially, through your state government. Find your state’s registration office with the SBA’s tool.
- Obtain credentials from the Federal Motor Carrier Administration (FMCA). You may not need a CDL to drive a box truck, but you’re still operating a commercial vehicle—and that means signing up with the FMCA. If you plan to move cargo across state lines, you may need a USDOT number. Use the FMCA’s tool to determine whether you need the DOT number or not. In addition to (or instead of) the DOT number, you’ll probably need an “MC number,” the FMCA’s “authority to operate” designation. There’s a $300 fee for this permanent authority; learn more and find links to register for an MC number at the FMCA’s website.
- Establish your driver qualification file. The Federal Motor Carrier Safety Administration (FMCSA) requires carriers to maintain records showing that drivers are qualified to operate on the roads—even if you’re an owner-operator, and even if you don’t have a CDL. That means even box truck drivers need a qualification file. Here’s a checklist of the documents to collect in this file; start with the section marked “Initial DQ File Documents.” Note that this file does require an application for employment, even if you’re your own employer.
2. Set up a business checking account.
Once your business is established, it’s crucial to keep your personal finances separate from the business’. That requires, at the very least, a business checking account.
It’s also a good idea to get a business credit card. That can keep your gas tank full between payments, and may even help you fund your box truck in the early days. For more advice on how to manage cash flow in the box truck industry, see number five on this list.
3. Acquire your box truck, insurance, and related equipment.
If you’re not sitting on tens of thousands of dollars to buy a box truck outright, don’t fret. You can still start a box truck business. In fact, many drivers begin by renting trucks for occasional work. Commercial truck rental services like Penske, Ryder, and Enterprise allow you to rent a box truck without as much upfront capital as leasing or buying.
Renting is expensive, of course—you’ll typically pay a rental fee plus a per-mile rate. To hold onto more of your revenue, consider leasing a truck. This option is more capital-intensive; you’ll probably need a deposit of around $5,000 to sign a leasing agreement. But leases are more cost-effective, over time, than renting.
The third option is to buy your own box truck. New box trucks run anywhere from $25,000 to $90,000 and up—even more if you opt for a refrigerated cargo area. That means you’ll probably need financing, either from the dealer, a bank, or an SBA program. (Learn more about financing commercial trucks in our article about low down-payment semi trucks; a lot of the advice applies to box trucks, too.)
These three options—renting, leasing, and buying a box truck—can complement each other. You could start a carrier gig job by renting a box truck on the weekends. Once you build a bit of capital from your box truck business, you can get a leasing agreement. After your business earns enough for a down payment, you can buy your own box truck.
You’ll also need insurance, of course. Insurers like Progressive, Freeway, and Safeline provide insurance for commercial box trucks—your rental or leasing company may be able to help, too.
Finally, consider the material handling equipment you might need to move loads in and out of your truck. If you move pallet loads, invest in a pallet jack, for instance, and be sure to stock your truck with plenty of straps or other load-securing equipment.
4. Find work.
Once your business is ready to go, you just need one thing: customers. Luckily, it’s never been easier to connect with shippers and brokers.
Start with a load board, an online marketplace for freight and carriers. Examples include Landstar (free, with premium services available at a cost) and DAT (subscription-based). These load boards allow you to filter work by type, so you can easily find box truck work. Amazon Relay is a load board just for Amazon logistics, and can provide lots of opportunities for box truck carriers.
Another option is to use a spot freight feature on an electronic logging device (ELD). These ELDs are digital systems that ensure compliance with the FMCSA’s hours-of-service rules, which regulate work and break hours for truck drivers. Many box truck drivers aren’t required to use ELDs; the hours-of-service regulations include an exception for short-haul, local driving. But many ELD providers offer add-on freight-spotting services; the system knows where your truck is located, and can match you with work on the spot. A service like this turns a carrier into something like an Uber driver. Simply turn on the app and start hauling.
Side note: how to get contracts
It is possible to get long-term stable work with a box truck. While this might not pay as much as a spot rate, it can give your business more long-term benefits. Here are some strategies to get contracts:
- Use load boards: load boards lead to brokers and, if you play your cards right, that can lead to fruitful, long-term relationships.
- Contact freight brokers directly: if you already know some brokers, ask them outright if they have contracts for box trucks.
- Amazon Relay: to sign up with Amazon, you need DOT and MC numbers, be authorized for hire, and have a good safety rating.
- Try local matching sites: look into GoShare, Lugg, and Dolly.
- Government contracts: this is a particularly good option for minority-owned businesses, though you’ll need to get your MBE certification first.
5. Maintain steady cash flow to grow (or maintain) your box truck business.
A box truck business has constant expenses. You have to buy gas. You have to pay rental or leasing fees, or make payments on a truck loan. Insurance bills arrive every month. In short, a successful box truck business requires steady, reliable cash flow to keep going—and even if you have plenty of work, cash flow can become a challenge in this industry.
That’s because shippers and brokers may not pay immediately. A lot of them operate on net-30 terms, meaning they have 30 days to pay your invoice. Some run net-60 terms. The promise of money tomorrow doesn’t help when you have an empty gas tank today.
The solution is a financial tool called factoring. Factoring companies like Bobtail pay your invoices today, collecting on them from your customers. They collect a percentage of the invoice value for this service, but it’s often well worth the price—especially when it’s as low as ours.
Bobtail is a factoring service designed to streamline financing, with low factoring rates (1.99% to 2.99%, depending on the size of your business) and no hidden fees. You don’t have to sign a contract with us. Just open the app, enter your load information, and get funded the same day—or, if it’s after 11 a.m., the next day. It’s a powerful tool for a brand-new box truck company.
Knowing how to start a box truck business is just the first step. Next, it’s time to get to work—and if you need help with cash flow as your box truck business grows, contact us to learn more about our factoring service.
