In trucking, a CDL driver makes more money than a non-CDL driver. That's a fact.
But, if you know how to find good loads or loads not requiring a CDL, you can make good money as a box truck owner-operator.
Knowing how to become an owner-operator and how to find good loads increases your chances of building a profitable box trucking business.
Let’s see how.
What is a box truck owner operator?
A box truck owner-operator is a truck driver who transports cargo and makes deliveries using a truck that they own or lease.
How much money do you need to become a box truck owner operator?
Starting a box trucking business is not cheap.
To prevent losing money on wrong equipment, you should understand what is the difference between a box truck vs a semi-truck.
After that, you need to decide how to use the box truck to your advantage.
Yet, owner-operators can make money with a box truck while operating in some of the most popular niches.
On his Youtube channel, Jay shared his experience about costs of becoming a box truck owner-operator. And I'll share them with you below.
First, be aware that the costs mentioned in the video are related to his location, which is Texas.
Jay says that, in total, to get stated, being a box truck owner-operator costs something between $10,000 and $15,000.
Now, let’s break down this total cost into smaller payments.
To start his trucking business, Jay paid $13,000 because, at the same time, he paid a class A CDL driver to operate his second box truck.
If you start by yourself, the total cost of becoming a straight truck owner-operator should be cheaper.
- 1The first thing that you need to spend on is getting an LLC. An LLC (Limited Liability Company) is the most popular business structure among owner-operators.
Check this LLC Cost by State (as of 2020).
- 2Once you have registered the LLC, you need to find a truck.
You can buy or you lease it.
Jay bought a second-hand box truck on which he spent $8000.
He just made sure that it run well.
Related: What to look for when buying a used box truck?
- 3After that, you need to apply for a VIN (vehicle identification number) and get an MC number or the Authority to Operate.
This step may cost you $300.
- 4Insurance is the last thing you need to pay for.
Jay, for example, bought the cheapest available insurance in his case for $1,500.
However, his insurance went down to $840 when he listed his other Class A CDL driver. That means that if having a CDL would make the insurance cheaper. It also depends on your driving record as well.
How do you become a box truck owner-operator?
To become an owner-operator, you need to understand whether you need a CDL to drive a box truck or not.
After that, you must own a well-maintained box truck, preferably having a hitch and a lift gate installed, and analyzed any box truck business ideas and chosen the best opportunities.
Being an owner-operator means that you did your calculations. And you are ready to fight for the lucrative loads on the straight truck market.
But, before you book loads, do your calculations right.
1. Calculate your RPM
RPM (rate per mile) stands for the truck average cost per mile.
Let’s say that your truck RPM is $1.62, and, during the last year, the truck drove 100,000 miles.
That means that the total expenses for that truck during the last year were $162,000.
Now, to stay profitable, what should be the rate per mile?
You need to know the expenses for the driver, fuel, equipment, insurance, repair, and other truck operating costs to get the correct RPM calculations.
If you have questions about calculating the cost per mile of your truck, consult a certified public accountant.
2. Calculate the truck average RPM
Once you know the RPM of your truck and you are ready to book loads, pay attention to the average RPM.
The idea is that some of the loads will pay you under the bottom line of your revenue calculations. So, an average RPM tells you if running a chain of loads turns out to be profitable for your business.
3. Know your box truck dimensions and capacity limits
The next step is knowing the your box truck dimensions and if they align with other states for non-CDL drivers.
The rules for commercial driving licenses are very different than those required for other vehicles.
The reason is simple.
An average car weighs about 5,0000 pounds, while a fully loaded big rig weighs up to 80,000 pounds. With this in mind, the difference makes commercial vehicles much more challenging to drive. But, if they happen to be involved in accident, it's much more dangerous.
To operate the box truck with a gross weight under 26,000 pounds, you don’t need a CDL because the requirement for CDL starts when the weight is 26,001 pounds and above the general weight criteria.
Also, know your truckload capacity, loading space dimensions, lengths, weights, and heights to find good loads and negotiate rates.
It will significantly influence your income as you focus on opportunities that bring you the best loads.
4. Search for Load Boards to find loads to haul
Nowadays, there are a lot of load boards available where you can post a truck and find a load to carry.
The most popular load boards are DAT Edge, Direct Freight, 123 LoadBoad, and TruckStop.
When searching the load boards, set the correct search criteria to find the best options.
Here are some tips on how to extend your search process to all the options on the market.
First, use extended search inquiry.
Put on the load board all types of equipment similar to yours. For instance, straight box, van, hotshot, reefer, liftgate, CDL or non-CDL. And also don’t specify the weights and dimensions you can haul.
This will extend the search results for your inquiry, and you could find loads that your straight truck is eligible to haul.
Also, don’t forget to post your truck on a load board. You have to understand that while you are looking for a load, someone is looking for an available truck.
Don’t miss the opportunity to be found on a load board by a broker or by a shipper. You never know who needs your help on the other side.
Just do that to increase your chances.
Thirdly, the hard to do but the most important step is to establish relationships with small brokers and shippers who use box trucks to cover their logistics needs.
It might be a opportunity to have a stable flow of loads with decent rates as you don’t need a magic pill to act on these tips.
Everything depends on you.
Just be ready to roll up your sleeves and dig deeper to get the best outcomes for yourself.
Trucking is a highly competitive business. There is no chance to prosper without getting the extra mile.
5. Hire a dispatcher
If you understand that, you don’t want to do all of these routine tasks, then try to find a dispatcher who will do that job for you.
This is why dispatchers exist.
A good dispatcher will cover the tasks of finding loads. But, he also will manage your paperwork flow, which is huge due to a higher amount of loads.
The dispatcher may do the route planning, deal with problems during finding loads, and look for loads that pay higher than your truck's RPM.
How to become a box truck owner-operator for Amazon
Amazon offers good loads for non-CDL and CDL drivers.
So, if you wonder how to become a box truck owner-operator for Amazon, below are the requirements.
They offer two options for you to find loads for your straight truck.
First, you may go to their load board at Relay Amazon and search for all the loads out there.
Second, you may try to apply for the Amazon dedicated lanes. For this, the requirement is to have at least 3 trucks and to have a very good track rating like on-time pickup and delivery times.
Contact Amazon directly to ask for this option.