Have you ever wondered how to own a company in the US? How about a Trucking Business?
The freight industry is the backbone of the US economy, contributing to more than $500 billion every quarter, and the numbers are increasing with every passing year. It is a lucrative industry that gives handsome rewards. However, it is not easy getting into the traditional trucking business due to its freight, logistics, and warehousing requirements.
Is there a way to be a part of the trucking industry and still not get in all the hassle?
There is a way to be a part of the trucking business and yet get started in a few days.
The answer to this question is “HOTSHOT TRUCKING.”
But what do you need to start your hotshot trucking business?
It depends on whether you plan to work for a company or create your own hotshot business. You can even opt for a truck rental business. But the most important of all is whether you wish to create a website or an application for a hotshot trucking business to ease the process or not.
In this guide, we will make you understand what hotshot trucking is, the business trends, how to get started with hotshot trucking jobs, and fewer insider tips for how to get ahead.
What Is Hotshot Trucking?
When shippers or brokers have relatively small haul loads that need to be delivered quickly, they require hotshot trucking service. The operators and hotshot drivers of hotshot trucking specialize in delivering project-critical, time-sensitive loads like agricultural equipment, heavy machinery, construction equipment, and many more.
Companies like Uber for trucks, Uhaul, Penske, J.B Hunt Transport Service, and many others make the hotshot trucking business lucrative. You can become an owner and operate a hotshot business under your own MC number.
Let’s dive in to understand the pros and cons of hotshot trucking through hotshot industry trends.
Hot Shot Trucking Industry Trends
The market of hotshot trucking is growing fast because it addresses the market gap, helping shippers who want to move small freight hotshot loads and would rather not pay for a large truckload. The trucking industry is a small segment of the $732 billion US trucking and transport industry but is also the fastest-growing segment.
Industry Size and Growth
- Industry Size and Past Growth- Data firm IBISWorld values the Less-than-TruckLoad (LTL) market in the US at $89.7 billion after growing 2.5% over the last five years to 2023
- Growth Forecast- The US LTL market is predicted to grow at least 5% annually through 2025
- Number of LTL Businesses- There are more than 1.2 million LTL businesses in the US
- Total Number of People Employed- This segment of the trucking industry employs more than 500,000 people
Fast Facts of Hot Shot Trucking Business
According to a survey, one piece of software that you’ll definitely need is a truck routing and scheduling program. This hotshot trucking app will help you plan your deliveries and keep track of your hot shot drivers’ routes. You’ll also need an accounting program to track your expenses and income. But first, let’s understand some facts about this business:
|Investment Range||$87,000 – $174,000|
|Revenue Potential||$90,000 – $180,000 per annum|
|Profit Potential||$55,000 – $110,000 per annum|
|Time To Build||0-3 months|
Trends of Hotshot Trucking
- There has been a rise in the demand on demand trucking industry because of its cost-effectiveness, reliability, and fast freight transport solutions
- Opportunities for Hotshot trucking due to a strong rebound in manufacturing
Challenges In the Hot Shot Trucking Industry Include:
- Lack of qualified hotshot truckers
- Soaring inflation and high fuel prices
How to Start a Hotshot Trucking Business?
To start a hotshot business, you will need to invest in a hotshot trucking app or a website to help you run the business after researching the market and knowing the expenses. Trucking can be a competitive industry, so it is important to have a technological backup with a strong business model to make your place in the industry.
Research Your Market
The key to your hotshot trucking job is sufficient research and planning. Your primary focus should be knowing your market’s performance and target audience. There are many different types of customers, including construction companies, retail stores, and manufacturers.
These are the clients who prefer hotshot trucking over other transportation methods. It is essential to understand the location of these clients located near your hotshot trucking business and try to know what kind of services they are looking for. Once you meet these clients’ requirements, they will never look for another hot shot delivery service provider.
Know the Competition
The hotshot trucking market is crowded, and there are many service providers who are older than you in the industry. So, there might be many clients who trust them over you as a new hauling business. You can always be one step ahead by getting to know the competitors.
Find out who else is in the market and what kind of services they offer their customers. This could help you decide what you provide better than what they already do and win more customers.
Know Your Costs
In addition to knowing your competitors and customers you will be targeting, you also need to know how much it will cost you to run your business. Keep in mind the insurance premiums, fuel costs, maintenance costs, and operational expenses like leasing equipment and hiring staff.
Develop Hotshot Trucking App Solution
It is extremely crucial to provide a seamless experience to the users and drivers by developing a truck delivery app solution. You can build a centralized portal to control and check all truck booking operations, and a cloud-enabled truck dispatch software for your dispatchers.
The more you specialize, the easier it will be for customers to refer you. Let’s take a closer look at the steps that you will need to take in order to get started in the hot shot trucking industry:
- Get your finances in order to start a hotshot trucking business
- Choose a speciality in the types of freight you haul based on the equipment
- Get a commercial driver’s license (CDL)
- Create a Limited Liability Corporation (LLC)
- Obtain an Employer Identification Number (EIN)
- Open a Business Bank Account
- Get a Motor Vehicle Record (MVR)
- Acquire a Transportation Workers Identification Credential (TWIC)
- Apply for a Department of Transportation (DOT) number
- Get a medical card and physical DOT
- Lease or purchase the right truck
- Purchase the necessary equipment
- Get the right level of insurance
- Develop Hotshot Business Marketing Materials
- Setup your Website and/or Application To Run Your Hotshot Business
- Prepare your truck
- Set your rate per mile
- Find Hotshot loads
- Use invoice factoring to get paid faster
Essential Software and Equipment Required to Start Hot Shot Trucking Business
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. You require a hotshot trucking app that provides many features, including load boards, factoring services, fleet compliance, load tracking, operating authority services, and more.
Instead of juggling multiple applications for loads, expenses, and invoices, you can control everything from one hotshot app.
For more information about how trucking giants operate, you can also read: Penske Vs Uhaul
How Much Does it Cost to Start a Hotshot Trucking Business?
Hotshot trucking is growing fast because it addresses a market gap. The cost of developing a hotshot trucking business ranges from $87,000 to $174,000, with an average cost of $130,500. 80% cost is for the hotshot trucks and trailers, so if you already own these items, the cost will be reduced immensely.
The overall risk of investing in the hot shot trucking business is comparatively low as most of the investment is for purchasing assets with excellent resale value. Let’s understand other investments apart from hotshot trucks and trailers.
|Startup Costs||Ballpark Range|
|LLC Incorporation, Licenses, and Permits||$500 – $1,000|
|Insurance||$3,500 – $4,000|
|Hotshot Trucking Application and/or Website||$35,000- $75,000|
|Marketing and Advertising||$500 – $2,000|
|Pick-up truck||$40,000 – $70,000|
|Trailer||$7,000 – $20,000|
|Other Tools and Equipment||$200 – $1,000|
The average revenue for hotshot trucking rates per mile in 2022 is $2, whereas the average cost is $0.78 per mile, resulting in a gross profit of $1.22 per mile.
The price range of developing a hotshot trucking app solution can be further bifurcated as:
- MVP Application: $12,000 – $15,000
- Website/Software: $25,000 – $30,000
- Fully Functional Website and App: $40,000 – $55,000
How Can aPurple Help You To Digitize Your Hotshot Trucking Business?
Have you thought about becoming your own boss as an owner-operator in the hot shot trucking business online?
It’s true that hotshot drivers can find this to be a very profitable business venture, but you need to make sure you get yourself set up with a solid foundation from the start to give you the best opportunities for success.
By digitizing your trucking business, you gain the benefit of improving customer experience, reducing administrative costs, and improving rate utilization.
Digitize your trucking business with aPurple– who provides you with a white-labelled, budget-friendly solution and streamlines your business operations with a hotshot trucking app. Our on-demand trucking app development covers almost every aspect that enables you to hold a good place in the logistics industry.
Get a deep dive on how aPurple works and how robust our hotshot trucking solution is with our Trucking App Live Demo.
To know more, feel free to contact us!