Have you noticed more hotshot delivery trucks driving down the highway?
According to Overdrive Magazine, the COVID-19 pandemic significantly impacted the hotshot trucking industry, with demand for essential goods and medical supplies driving up rates and increasing demand for hotshot truckers.
The combination of growing demand, lower startup costs, flexibility, and shorter hauls has made hotshot trucking an attractive option for entrepreneurs and drivers alike in the US.
Below we dive deeper into the hotshot trucking industry and provide a step-by-step guide with the basics on how to start your own hotshot trucking business.
What is Hot Shot Trucking?
Hot shot trucking is an expedited freight delivery service that involves using smaller trucks and other vehicles. Experienced truckers with a valid commercial driver’s license can transport time-sensitive and high-value loads to their destination faster than some larger carriers.
A hotshot trucking business typically uses 1-ton or 3/4-ton pickup trucks, cargo vans, or straight trucks with a flatbed or box trailer.
You need the following to own and operate a profitable hotshot trucking business.
- Experienced Truck Drivers
- 1-ton Truck
- 3/4-ton Pickup Truck
- Cargo Van
- Straight Trucks
- Flatbeds
- Box Trailers
- An Office or Trailer for Centralized Operations
- Internet Access
- Employer Identification Number (EIN)
- Commercial Driver's License
What Can My Hotshot Business Transport?
Hot shot trucking companies can transport various goods, including equipment, machinery, construction materials, industrial parts, and other heavy-duty materials. A hotshot trucker will secure hotshot loads using tie-downs
Who Hires Hotshot Trucking Companies?
Businesses and individuals who need urgent delivery services for local and national delivery hire hotshot trucking companies. These quick-ship trucking professionals act as expedited delivery services who can deliver time-sensitive shipments faster than traditional shipping methods.
A hotshot driver can easily find work via hotshot load boards advertising different types of loads. A hotshot load board is an online platform connecting shippers and brokers with independent owner-operators looking to haul smaller loads or expedited freight.
Start A Hot Shot Trucking Business: Step-by-Step
Hot shot trucking is a type of expedited freight delivery service that involves the use of smaller trucks to transport time-sensitive and often high-value loads to their destination quickly. It is a great business opportunity for entrepreneurs entering the transportation industry.
Step #1. – Create Your Business Plan and Structure
The first step to starting a hotshot trucking business is to figure out your business plan. Next, you need to decide on the type of business structure you want from the following options.
What Is A Business Plan?
A business plan is a document that outlines the objectives, strategies, and financial projections of a company. In the hotshot trucking industry, a business plan would detail the company's goals, target market, marketing strategies, and financial projections for the future.
Your business plan should also include information on the competition, regulations, and potential risks that could impact the business. A business plan is important for hotshot trucking businesses to secure financing, attract investors, and guide decision-making.
This hotshot business plan serves as the primary roadmap for the company, helping to ensure that it stays on track and achieves its goals.
Business Structures
- Sole Proprietorship
- Partnership
- Limited Liability Company (LLC)
What is a Sole Proprietorship?
A sole proprietorship for trucking is a business structure where one individual owns and operates the business. In the hotshot trucking industry, a sole proprietorship is the most likely choice for small business owners who want to start a hotshot trucking company.
As a sole proprietor, the individual assumes full responsibility for the business's liabilities and debts. They also receive the business's profits and make all its decisions. Registering as a sole proprietorship is often a straightforward process.
Sole proprietorships offer new business owners simplicity and low cost.
What is a Limited Liability Company?
A Limited Liability Company (LLC) combines a corporation's liability protection with a partnership's tax benefits. In the hotshot trucking industry, an LLC is a popular choice for small business owners who want to protect their personal assets while maintaining flexibility in management and ownership.
As an LLC, the business is a separate legal entity from its owners, which means that the owners are generally not personally liable for the business's debts or obligations.
LLCs can have multiple owners, known as members, and the business's profits and losses are passed through to the member's personal tax returns.
What is a Business Partnership?
A business partnership forms when two or more individuals share ownership of the same business. For example, in the hotshot trucking industry, a partnership is a common choice for small business owners who want to start a hotshot trucking company with a partner.
In a business partnership, each partner shares predetermined amounts of the profits and losses of the business, and the partners' personal assets are generally at risk in par if the company incurs debts or liabilities.
Partnerships can be structured as general partnerships, where each business partner has an equal say in the business's operations, or limited partnerships, where one partner has more control, and the other has limited liability.
Each business structure has advantages and disadvantages, so it's important to research and consult a legal professional to determine which structure is best for your business.
After you've decided on your business structure, be prepared to present your business plan in clear and simple terms to get the help you need with financing and the following essential steps in setting up your new trucking business!
Obtain Necessary Trucking Licenses and Permits
New business owners will need to get a commercial driver's license (CDL), a Department of Transportation (DOT) number, and a Motor Carrier (MC) number.
What is a Commercial Driver's License (CDL), and How Do I Get One?
A Commercial Driver's License (CDL) is a specialized driver's license required for individuals who operate commercial vehicles such as tractor-trailers, buses, and other large vehicles.
To obtain a CDL, an individual must pass both a written knowledge test and a driving skills test and meet specific medical and age requirements.
Getting a CDL typically involves the following:
- Enrolling in a CDL training program.
- Practicing with a commercial vehicle.
- Passing the required exams.
The requirements for obtaining a CDL may vary by state, so it's essential to research the specific requirements for your state to ensure compliance.
What is a Department of Transportation Number (DOT), and How Do I Get One?
A Department of Transportation (DOT) Number is a unique identifier the Federal Motor Carrier Safety Administration (FMCSA) assigned to commercial motor carriers to monitor their safety compliance and ensure they operate safely on public roads.
The DOT Number tracks the carrier's safety performance, including its crash history, inspection results, and compliance with federal regulations.
To obtain a DOT Number, carriers must complete an application process with the Federal Motor Carrier Safety Administration (FMCSA), which typically involves providing detailed information about the carrier's operations, safety management program, and other relevant details.
The application process may also include a safety audit, which evaluates the carrier's compliance with FMCSA regulations.
You may also need to obtain additional permits and certifications depending on the type of cargo you will be transporting, such as hazardous materials, oversize loads, or livestock.
Research the regulations and requirements for your specific state and industry to ensure compliance.
What is a Motor Carrier Number, and How Do I Get One?
A Motor Carrier Number (MC Number) is a unique identifier assigned to motor carriers transporting passengers or goods in interstate commerce by the Federal Motor Carrier Safety Administration (FMCSA). The MC Number monitors carriers' safety compliance, including their crash history, inspection results, and compliance with federal regulations.
To obtain an MC Number, carriers must complete an application process with the FMCSA, which typically involves providing detailed information about the carrier's operations, ownership structure, and safety management program.
The MC Number is required for carriers that engage in interstate commerce and have a gross vehicle weight rating (GVWR) or gross combined vehicle weight rating (GCWR) of 10,001 pounds and transport hazardous materials.
Carriers operating within a single state are not required to obtain an MC Number. Still, they may need to comply with state-specific regulations.
Step #2. – Purchase or Lease Trucking Equipment and Insurance
After you have obtained the necessary licenses and permits, the next step is to purchase equipment and insurance. Next, you will need to buy or lease a truck and trailer suitable for the cargo you will be transporting.
When selecting your equipment, consider weight capacity, trailer length, and fuel efficiency.
Where Can I Buy Or Lease A Trailer To Start a Hotshot Business?
There are several options for purchasing or leasing a trailer to start a hotshot trucking business.
One option is to buy a new or used trailer from a dealership that specializes in commercial trailers. Another option is to search for trailers for sale or lease online through websites such as TruckPaper, Commercial Truck Trader, or Craigslist.
Some trucking companies offer trailer leasing programs for independent contractors and owner-operators. Research and compare prices, warranties, and financing options before deciding on purchasing or leasing a trailer for your hotshot trucking business!
You will also need to purchase commercial auto insurance that meets the requirements set forth by your state and the DOT. The right insurance will protect your business and assets in an accident or other unforeseen circumstances.
Do I Need Commercial Auto Insurance For My Trucking Business?
Commercial auto insurance provides financial protection against liability for accidents, vehicle damage, and driver and passenger injuries.
Besides being a legal requirement in most states, commercial auto insurance is a critical component of hotshot trucking businesses because it helps protect their assets and financial stability.
Commercial auto insurance can help trucking cover the cost of repairs, medical bills, and legal fees, which can be significant for businesses operating large vehicles on public roads.
Step #3. – Establish Your Branding and Marketing Strategy
Now that you’ve got your new hotshot business up and running, establishing your brand and marketing strategy are critical to the success of your business. You must develop a strong brand that sets you apart from your competitors and brand messaging that clearly communicates your value proposition to potential customers.
Hotshot Trucking Company – Branding
Branding is essential to any trucking business, including hotshot trucking companies. Begin the branding process by focusing on your company goals and deciding how you would like to be perceived by clients, vendors, partners, and employees.
Start by defining your company's brand identity, including its core values, mission, and unique selling proposition.
Define your trucking brand identity to create a brand that resonates with your target audience, employees, and partners. This sets your trucking business apart from the competition!
Here are some steps to consider when branding a hotshot trucking company:
- Choose Your Company Name, Logo, and Colors: Choose a memorable and relevant name for your company and create a professional logo that reflects your brand identity.
- Build Your Website: A website is a must-have tool for branding and marketing your hotshot trucking company. Ensure that your website is user-friendly, informative, and visually appealing.
- Create a Social Media Presence: Social media platforms like Facebook, Instagram, Twitter, and LinkedIn can promote your brand. Online social platforms are ideal environments where brands openly engage with customers and followers while showcasing their best hotshot trucking services.
- Invest In Branded Marketing Materials: Use business cards, flyers, and brochures to promote your hotshot trucking business.
- Brand Your Trucks: Vehicle branding effectively promotes your brand while on the road. Use vehicle wraps or decals to display your company name, logo, and contact information.
- Provide Exceptional Service: Providing exceptional customer service is critical to branding. Ensure that your drivers are courteous and professional and that your customers' needs are always met to enhance your customer's experience.
Happy customers are more likely to become brand ambassadors who recommend your products and services to their friends, family members, coworkers, and social media followers.
Branding is a long-term process that requires consistent effort and attention.
By building a solid brand identity and providing exceptional service, you can create a brand that catches your target audience's attention and helps your hotshot trucking company succeed.
Your marketing strategy should include a mix of online and offline digital marketing strategies.
- Blogging
- Website Marketing
- Search Engine Optimization (SEO)
- Social Media Marketing (SMM)
- Email Marketing
- Targeted Advertising
Hire and Train Your Hotshot Trucking Team!
As your trucking business grows, you will need to hire additional truck drivers or support staff to help you manage the workload.
Hiring experienced and reliable drivers familiar with the industry's regulations and requirements is important.
Consider the following when hiring a hotshot driver.
#1. – “Clearly” Define Your Job Requirements
Determine the job duties, necessary qualifications, and experience required for the position.
#2. – Advertise Your Driving Job
Advertise the job on job boards, social media platforms, and industry-specific websites.
#3. – Review Candidate Applications
Review resumes and applications to identify candidates who meet the job requirements.
#4. – Conduct Interviews
Interview your pool of well-qualified candidates to assess their skills, experience, and personality to ensure they fit your company culture well.
#5. – Check References
Contact the candidate's references to verify their work history and performance.
#6. – Request a Background Check
Do a background check to ensure the candidate has a clean driving record and no criminal history.
#7. – Provide Training for New Hires
Once hired, provide training on company policies, safety procedures, and equipment operation.
Provide ongoing training and support to your team to ensure they are up-to-date on industry trends and best practices. Ongoing employee training and support will help you maintain a high level of service and customer satisfaction, which is critical to the success of your business.
Why Are Hotshot Trucking Businesses Becoming More Popular?
#1. – Growing demand: With the rise of e-commerce and online shopping, there has been an increase in demand for expedited and on-demand delivery services. Hotshot trucking businesses are well-positioned to meet this demand by offering faster and more flexible delivery options.
Truckers with their own hotshot business, a commercial driver's license, and valid vehicle registration get paid by the mile to load, secure, and carry hotshot loads.
An experienced hotshot trucker on standby will use a combination of gooseneck trailers, straps, tarps, and other tie-downs like ratchet straps to secure heavier loads and deliver them safely to customers.
#2. – Lower startup costs: Starting a hotshot trucking business requires a smaller investment compared to traditional trucking businesses. Hotshot trucks are smaller and less expensive than full-size semis, and operators can often use their own flatbed trailers instead of purchasing or leasing one.
#3. – Flexibility: Transporting hotshot loads offers high flexibility in scheduling and routes for the hotshot driver. A hotshot driver can choose their own clients and work on their own terms, which is particularly attractive to those who prefer a more independent work lifestyle.
#4. – Shorter hauls: Hotshot trucking typically involves hauling smaller, time-sensitive loads over shorter distances, which can be more efficient and profitable than long-haul trucking.
#5. – Truck Driver Shortage: The trucking industry has faced a driver shortage in recent years, leading to increased demand and higher pay for truck drivers across hotshot load boards. This has made hotshot trucking more attractive to those looking to enter the industry.
How Do Hotshot Companies Get Paid?
Hot shot trucking businesses typically charge premium rates for their services due to their work's urgent and specialized nature.
As a result, successful companies require skilled drivers knowledgeable about safety regulations, transportation laws, and proper cargo handling procedures to ensure their deliveries arrive safely and on time.
How Much Do Hot Shot Trucking Businesses Make?
The annual revenue of a hotshot trucking business can vary widely depending on several factors, such as the size of the company, the number of trucks, the type of cargo transported, and the geographic location of the business.
The Bureau of Labor Statistics reports that hotshot drivers average just over $20.00 an hour. According to industry data, the average annual revenue for a hotshot trucking business can range from $150,000 to $500,000.
Hotshot Trucking Industry: Profit Margins
The profit margins in the hotshot trucking business can also vary, depending on the operating expenses such as fuel costs, insurance premiums, maintenance expenses, and equipment costs.
Hotshot trucking businesses that operate efficiently with low overhead costs can generate higher profits.
What Operating Expenses Will I Have as a Hotshot Business Owner?
The operating expenses for a hotshot trucking company depend on several factors, such as the company's size, the type of equipment used, and the distance traveled. However, here are some typical operating expenses that hotshot trucking companies may incur:
#1. – Fuel Costs: Fuel is one of the most significant expenses for any trucking company, and hotshot trucking is no exception. The cost of fuel can vary depending on the distance traveled the fuel efficiency of the truck, and current market prices.
#2. Maintenance and Repairs: Regular maintenance and repairs are necessary to keep the truck and trailer in good condition. Maintenance expenses can include oil changes, tire replacements, and other repairs.
#3. – Commercial Insurance: Hotshot trucking companies require various types of insurance coverage, such as commercial auto insurance, liability insurance, and cargo insurance.
#4. – Vehicle Payments: Hotshot drivers who buy or lease their rigs can pay a substantial monthly cost to buy or lease trucking equipment. Owner/operators who own their own trucks can completely eliminate this monthly expense.
#5. – Permits and Licenses: Hotshot trucking companies may require permits and licenses to operate in different states or regions. These expenses can include permits for oversized loads or temporary operating authority.
#6.- Taxes and Fees: Hotshot trucking companies must pay various taxes and fees, such as fuel taxes, registration fees, and tolls.
#7. – Office Expenses: Hotshot trucking companies may also have office expenses, such as rent, utilities, and office supplies.
#8. – Employees and Staffing: The cost of hiring, training, and providing insurance for permanent and temporary employees also factor into operating expenses for hotshot trucking companies.
Hotshot trucking companies must carefully manage their operating expenses to ensure profitability.
By monitoring expenses and identifying areas for cost savings, hotshot trucking companies can maximize their profits and succeed in the industry.
Best Hotshot Trucking Companies in The Industry
If you're thinking about starting your own local or cross-country trucking business, it is essential that you take notes from the best hotshot delivery services in the industry.
Take note of what these highly profitable trucking companies do well and use that to develop a strategy for making your hotshot trucking business one of the best in the industry.
According to a 2020 report by IBISWorld, some of the largest and most successful hotshot trucking companies in the industry by revenue include:
- United Parcel Service (UPS)
- FedEx Corporation
- J.B. Hunt Transport Services, Inc.
- Schneider National, Inc.
- YRC Worldwide Inc.
- Swift Transportation Company
- Old Dominion Freight Line, Inc.
- XPO Logistics, Inc.
- Landstar System, Inc.
- Werner Enterprises, Inc.
Profit margin and revenue can vary significantly among companies depending on their size, location, and services offered.
Hot shot trucking can be a highly competitive industry, and success in the business requires a combination of strategic planning, efficient operations, and effective marketing.
Who Hires HotShot Trucking Services – Where To Find Work
Hotshot truck drivers are typically hired by various businesses and individuals who require urgent delivery services or need their shipments delivered faster than traditional shipping methods.
Common industries and businesses that hire hotshot trucking companies include the following:
Oil and Gas Companies: Hotshot truck drivers are used by oil and gas companies to transport equipment, machinery, and other materials to remote job sites.
Construction Companies: Construction companies frequently hire hotshot truck drivers to transport materials, equipment, and supplies to job sites.
Manufacturing Companies: Use hotshot truck drivers to transport raw materials, finished goods, and equipment to and from production facilities.
Agriculture and Livestock Industries: Hot shot truck drivers are used by farmers and ranchers to transport livestock, crops, and other agricultural products.
Emergency Response Services: Hot shot truck drivers are also used by emergency response services, such as disaster relief agencies, to transport supplies and equipment to disaster zones.
Small Businesses and Individuals: Small companies and individuals who need urgent delivery services for time-sensitive or high-value items use hotshot trucking services.
Where Can I Find Customers for My Hotshot Trucking Business?
Hot shot truck driving companies are typically hired by businesses or individuals who need urgent delivery services as a one-time or ongoing service. Quick-shipping business customers typically need their shipments delivered faster than traditional shipping methods have available.
Even with quick shipping services in high demand, finding customers for a hotshot trucking business can be challenging, especially for new companies.
Seven tips for finding new customers:
- Use load boards: Load boards such as DAT, Truckstop, and uShip can help you find available loads and connect with shippers and brokers.
- Network with industry professionals: Attend industry events and join associations such as the National Association of Small Trucking Companies (NASTC) to network with industry professionals and potential customers.
- Use social media: Social media platforms such as Facebook and LinkedIn can promote your services and connect you with potential customers for free!
- Advertise locally: Advertising your services in local newspapers, magazines, and radio stations can help your business reach potential customers in your area.
- Contact businesses directly: Contact local businesses directly to offer services and build relationships with potential customers.
- Provide exceptional customer service: Providing outstanding service to your existing customers can help you gain referrals and new business.
- Partner with other trucking companies: Partnering with other trucking companies can help you expand your services and reach new customers.
Important Notes for New Hotshot Business Owners
Hotshot truck drivers are in high demand in industries that require urgent transportation services and rely on timely deliveries to keep their operations running smoothly.
Starting a hotshot trucking business is a great way to enter the transportation industry and build a successful small business.
Be prepared to overcome unexpected challenges during your early growth phase!
If you follow the steps outlined above, you can establish a strong foundation for your business and position yourself for long-term growth and success.
Remember that starting a new hotshot trucking business is never easy and will require hard work, dedication, and a willingness to take risks.
With the right mindset and a solid business plan, you can overcome any challenges and build a successful hotshot trucking business that can generate unlimited revenue for years to come!
