Gagandeep Baidwan Explains What You Need to Know if You are Planning on Going into the Freight Transportation Industry
The freight transportation industry has been growing over the last few decades. Even when the economy was slowing down or going through a slump, the trucking industry kept going strong. It’s not that this industry is exactly recession-proof, but one can’t imagine cargo, food, and medical supplies reaching the stores without all the trucks tearing down the freeway.
Gagandeep Baidwan of Plano, TX, runs a successful trucking company. He really enjoys being able to work for himself and being able to choose his freight and what trips his drivers will take. With the trucking industry moving about 70% of all freight in the U.S., it’s no wonder more and more people are thinking about going into the freight transportation industry, he says. So, what is it like to start your trucking business? And what should you focus on?
The first thing you need to know is that your trucking company should become a legal business entity. According to Gagandeep Baidwan, you have two legal options. You can either go for a limited liability company, LLC for short, or a business corporation. Either way, you’re making a distinction between your personal liabilities and business assets. Establishing a company requires that you hire a registered agent who will represent your company and receive legal notices from the secretary of state. You will also need to open a bank account. For that, you’ll have to obtain an employer identification number (EIN), which identifies your business and will be part of all your financial documents and tax filings.
The type and number of licenses and permits you are required to apply for depend on the state you plan to start your company in. In some states, you’ll need to obtain all the necessary licenses and permits first before you begin to operate your business. In general, the licenses you’ll need fall under the following.
- A commercial driver’s license (CDL): You’ll need to get a commercial driver’s license. Long hauls between states have a different license than if you plan to operate in the inner city.
- A USDOT Number: This is what identifies your company at the Federal Motor Carrier Safety Administration. Your company number is unique and is used when conducting audits and inspections.
- International Registration Plan (IRP): You’ll need the IRP if you conduct business across state lines. If your business is limited within one state, then you won’t need this license.
- International Fuel Tax Agreement (IFTA): The IFTA decal is another requirement for trucks hauling cargo between states.
- A Motor Carrier Operating Authority (MC): Your trucking business will probably need more than one MC license depending on the type of services you offer and the state you register in.
With the legal requirements and all the permits in place, it’s time to think about the equipment necessary to start the trucking business. According to Gagandeep Baidwan, the type of vehicle you acquire can be the difference between a successful trucking business and one that flounders. Make sure that the vehicles accommodate the type of cargo you carry. Also weigh your options between renting and purchasing the vehicles. See which one is more profitable in the long run.
Gagandeep Baidwan on Insurance Coverage
Since this business involves trucks and driving, then insurance should be front and center. As usual, you should do your due diligence and search for the best insurance company that gives you a good premium. There are many insurance policies you need to invest in. You’ll need passenger accident insurance to protect you against accidents that involve passengers. Another is cargo insurance that covers any damage to the cargo between pickup and delivery points. Other insurance policies include primary liability insurance and physical damage insurance.