What is a Hotshot Trucking Business?
The term “hotshot trucking” is applied to truckers who drive super-duty pickup trucks and also pull large trailers to haul various loads. Hotshot loads will depend on your equipment and how you operate. Items hauled may include things like tools needing to go to an oil rig, or a small package needing a same day delivery.
Anyone who has the appropriate driving license from the Department of Motor Vehicles (DMV) can get into the hotshot trucking business. The hotshot trucking business is different from a regular trucking business. In hotshot trucking, the cargoes are usually smaller and are often time-sensitive in nature. Many companies hire a contract driver to complete just one run. Starting a hotshot business is not hard. In fact, hotshot trucking is a great entrepreneurial opportunity. The tricky part is building the business and keeping up with the chaotic pace.
Where to Start?
The hotshot business is trying, and it does not allow for breaks between pick-ups and deliveries due to the time sensitivity. This kind of schedule can wear on truckers both physically and mentally. It can also create a challenge on the home front. Before you start your hotshot trucking business, be sure your family understands the strains it will create for your family life.
Once you have thought about it in-depth and made a decision, then you need to conduct a thorough research to determine the direction you want your business to go in. What is your niche? What type of truck and trailer should you buy? What type of hauling do you want to do? What type of deliveries do you want to make? What type of customers will you encounter? The hotshot business is a very competitive one. Making connections and building a customer base is vital to your business.
Independent Drivers Versus Signing with a Trucking Company
One way you can make your hotshot business start developing revenue, without having to waste time building a consumer base (if you do not have the connections), is to either lease your services or sign with a trucking company that is in need of
hotshot truckers. Businesses that need to have their goods delivered quickly to specific destinations can choose to contract hotshot truckers to haul their freight.
Before you can sign with a trucking company, you will need to get in touch with the terminal manager. This will help you know what is required of you before you submit your application. It is important that you pass a drug test but also a Department of Transportation (DOT) physical. If you choose this route, you will find it easy to get cargo to haul, and you will also be free from the responsibility of dealing with billing and paperwork.
Remember to consider if the trucking company will provide a truck for you. Some companies provide you with a truck when you sign with them. Others will require you to own and operate your own truck. Keep in mind that companies that provide a truck for you will usually take a higher percentage of your driving fee.
Hotshot drivers who choose to be independent can take advantage of the different online freight providers that need truckers to haul their load. This sort of works as an online auction site. Different truckers can bid on different hauls. It works out well for people just starting out in the hotshot business. This also works well for businesses that need to quickly deliver goods as they can easily find freelance truckers who can provide the type of service they need.
About 70 percent of all cargo shipped within the United States is through trucks. 8.9 million people in the United States are employed by trucking companies or have trucking-related jobs. It is estimated that there are over 3.5 million truck drivers in the United States. Out of that 3.5 million, one in nine is independent drivers.
The American economy depends on trucks to deliver nearly 70 percent of all freight transported annually in the United States. This is why the trucking industry is considered a backbone of the American economy. According to the American Trucking Association (ATA), more than 80 percent of the revenue that was generated in the shipping sector was as a result of the activity of the trucking companies. The ATA project the profits from the trucking industry will continue to rise. In other words, the trucking business is not going anywhere anytime soon.
Some people are not cut out for 11-hour shifts a day. Some do not like being on a schedule. Some cannot travel far from home. The main reasons why men and women flock to hot shot trucking are the earnings and no commitment. Hotshot truck drivers can pick up a haul, work for a few hours, and make a big paycheck. If you can find the right load, just one trip can cover your monthly expenses. This is why there is such an appeal to the hotshot industry because it can be rewarding. It is also the type of lifestyle that many men and women look for.
A hotshot business is often mistaken for an expedited loads business. While they both may carry loads that are time-sensitive, there remains a big difference between the two. Expedited loads are those that are often carried and shipped by straight trucks, vans, and tractor trailers. Meanwhile, hotshot truckers often use super-duty pickup trucks designed to pull trailers that are intended for hauling loads.
Niches in the Hot Shot Business
While a typical trucking job may be too demanding, hotshot trucking brings more freedom and often big rewards for your efforts. Since hotshot truckers have the freedom to pick what jobs they ways, a lot of hotshot truckers target a particular niche.
Your niche will determine the logistics of your hotshot business. You can choose to move goods for a described set of business. Niches in the hot shot business include:
- Medical Hotshot Business
- Commercial Hotshot Business
- Agricultural Hotshot Business
- Manufacturing Hotshot Business
- Spare Parts Hotshot
- Perishable Cargo Hotshot
- Lightweight Cargo
- Heavy Duty Cargoes
There is not a business of any kind that is not faced with challenges. Becoming a hotshot truck driver is no easy task. It is important to be prepared and know what to expect. Possible challenges in starting a hotshot business include:
- Getting a Truck and Trailer
- Price of Truck Fuel
- Truck Maintenance
- Likely No Regular Schedule
- Registering the Business
- Financing the Business
- Applying for a U.S. Department of Transportation Number
- Buying Insurance
- Getting the Proper Legal Documents
Helpful Tips For Starting Your Hotshot Business
The hotshot business is trying, aggressive, and unpredictable. You are paying for the expenses up front, and there is no such thing as a steady pay. You will have competition for every load you try to book. Some days you might try to book a load, and you will lose. It goes without saying there are competitors, just like with any business.
Before you open a hotshot trucking business, it is a wise idea to gain information on how strong the competition is. This will help you gain knowledge of how established businesses have set themselves up. Then it is important for you to design your business in a way that sets you apart from others.
Also, it might be a good idea to meet with someone already in the hotshot business. Someone who knows the tricks of the trade may be willing to share their entrepreneurial advice. Keep in mind, it might be better to find a hotshot trucker to ask who is not in competition with you.
Legal Proceedings for a Hotshot Business
In order to be able to run your hotshot trucking business as smoothly as possible, there are some legal entities that must be put into place.
First, it is important that you designate a process agent. A process agent can accept service of any legal summons or get documents that are related to your business on your behalf. It recommended getting a process agent in every state you have an office in or any state you have traveled through.
A BOC-3 is a document that designates a legal agent on certain processes that may be served. It mostly pertains to individuals or companies in the transportation industry. A BOC-3 must be filed with the Federal Motor Carrier Safety Administration (FMCSA) either by you or the process agent.
Setting up a Limited Liability Company (LLC) is an option you should consider when starting a hotshot business because it can protect you from personal liability if the need arises. If you are planning on setting up an LLC for your business, you can file for your authority at the same time the LLC is being formed.
An LLC is one of the most popular business forms available, and for good reason. There are many advantages of a Limited Liability Company including workplace benefits:
- Pass-Through Taxation
- Determine Your Own Structure
- All Members Can Be Involved
- Build Business Credit
- Attractive to Investors
Intellectual property protection in the hotshot industry is just like any other business out there. With competition and ideas being intense in the hotshot industry, there is a real need to protect your intellectual property. To protect your intellectual property, you need to register your trademarks and geographical indication.
It is important to understand that hotshot trucking is a vital component in the commercial trucking industry. Accidents can occur and lives or properties might be lost. Your hotshot business, just like any other business, needs to have insurance for unprepared expenses. Here is a list of the insurance you might want to consider for your hotshot business:
- Primary Liability
- Non-Trucking Liability
- Motor Truck Cargo Insurance
- Trucking Physical Damage Insurance
- Occupational Accident Insurance
- General Liability Insurance
- Workers Compensation Insurance
- Umbrella or Excess Liability Insurance
- Trucking Employment Practices Liability Insurance
- Freight Surety Bonds
List of Legal Documents Needed for a Hot Shot Business
Legal documents are needed for any business. Truckers in the hotshot business are moving cargo, documents, parcels, and equipment from one place to another. It is necessary for each hotshot trucker to have the proper legal documents for their hotshot business. The legal documents for a hotshot trucker consist of:
- Vehicle Permits
- Vehicle for Service Permit
- Business License
- Proof of Insurance
- Drivers Form
- Commercial Driver’s License
Financing Your Hotshot Business
Everyone has hard the old saying, “You gotta spend money to make money.”
A hotshot trucking business, like any other business, requires start-up costs. The biggest hurdle in getting started is the start-up costs. It seems like a simple concept, but there are a lot of moving parts. Depending on what your business is hauling, will depend on the total costs. When financing your hotshot business, you can be financially supported with either internal funds or external funds. If you are using external funds, be sure you are making wise decisions and purchases, and also take the interest rate into account.
Equipment has altered the hotshot business. Not every hotshot business require the same equipment. What your hotshot business hauls, will depend on your equipment needs. Here is a general list of equipment for hotshot truckers:
- A Truck (1 Ton or Larger)
- Trailer (Typically a Gooseneck)
- Trailer Hitch
- Cargo straps, Chains, Tie Downs, and Pad
- Internet Access on the Road
- Dependable Phone
- Laptop/Computer Access
- FMCSA Requirements and Documentation
Choosing the Right Location for Your Hotshot Business
The cost of moving an existing business is quite challenging, so it is important to pick the right location from the start. In the hotshot industry, you may have many locations (home-based business, commercial, and industrial). In choosing the right location, it is important to consider the following:
- Distance from Other Business
- Additional Costs (if any)
Hot Shot Load Boards
Constant communication is imperative in the hotshot business. It is important to be in contact with potential load providers at all times. A load board is a great way for hotshot truckers to keep in contact with providers and to sign up for jobs. There are lots of different load boards to choose from. Although you will have to find a load board that fits into the equipment that you have and loads you want to haul.
It is important to keep in mind that all load boards pay differently. It is important to know when your payment will be provided. This is how a lot of hotshot truckers decide if they would like to work with a certain load provider. Some load boards pay their hotshot trucker within days. Other load boards pay their hotshot trucker within 30-60 days. Hotshot truckers need to remember to choose a rate that covers your costs per mile, but it still leaves you with some profit.
Some load board providers include:
As you can see, there is a lot to think about when starting your own hotshot trucking business. Do the research and see if it is a good fit for you. Best of luck in starting your own hotshot trucking business!