Trucking is a multi-billion dollar industry, and it’s dominated by the small carrier.

In fact, it’s worth over $700B. That’s some serious moolah. Combine that little tidbit with the fact that 91.5% of motor carriers in the U.S. only operate six trucks or fewer — you can understand why people are flocking to the trucking industry to start their own small carrier businesses.

Unfortunately, this industry can be a tough nut to crack into. About 84% of these small carriers end up failing, and the failure rate has been steadily climbing over the course of 2022.

And while high diesel prices and the truck driver shortage are partly to blame for the recent rise in failed businesses, one expert believes that most problems fall on the carriers themselves.

“The biggest problem that [the trucking industry] has is overall rising rates of failure, which is a result of clerical admin-type issues that bubble up together,” said Adam Wingfield. As a Trainual certified consultant and founder of Innovative Logistics Group, Adam helps trucking carriers set up a system of processes to help develop their businesses. “A lot of these problems come from the fact that carriers don’t know where to start. You don’t have things in order, and problems can come back to bite you.”

Meaning that small carriers ultimately fail because they’re disorganized and poorly managed, which can lead to time wasted, money lost, and potentially even revocation — AKA when carriers lose the authority to do business.

Questions Carriers Ask

How dominant are small carriers in the trucking industry?

The article notes the trucking industry is worth over 700 billion dollars and that 91.5% of motor carriers in the U.S. operate six trucks or fewer. Small carriers are the backbone of the industry, not a niche.

Why do small carriers need written processes and SOPs?

The article points out that about 84% of these small carriers end up failing. Documented processes for buying and registering trucks, hiring, driver qualification files, and pre-trip inspections keep critical steps from being missed as you grow.

What processes does the guide cover?

It walks through buying a new truck, registering it, updating vehicle maintenance records, hiring new drivers, building the driver qualification file, onboarding, and conducting pre-trip inspections. Each is laid out as a repeatable process you can standardize.

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Carriers need documented systems and processes that will streamline their operations and keep their daily business organized and fluid. That way, every employee knows exactly how everything should be done, and you’ll never need to frantically search for solutions for your drivers, trucks, or business.

Whether you’ve been in your business for a while or are just getting started, you need to document how you run your operations. Especially ones that you’ll be repeating again and again. So, to help you get started, here are some of the most important processes and SOPs trucking carriers need to document:

1. Buying a new truck.

The hint is in the name — you can’t exactly join the “trucking” industry without a truck. It would be like bumper cars without the cars. (It just becomes a sad mosh pit at that point.)

Your trucks are your most important and valuable assets. And whether you have two or twenty, the process of adding new trucks to your fleet should be standardized to ensure they’re properly registered and maintained — that way, you won’t run into any non-compliance headaches down the line.

Registering your new truck.

You can’t hit the open road as soon as you buy a new truck. There are a series of licenses, registrations, and permits you need to get before you can use your truck for any commercial business. These include:

• U.S. Department of Transportation (USDOT) and Motor Carrier (MC) numbers.
• Commercial vehicle registration with the local DMV or transit authority.
• Unified Carrier Registration (UCR).
• International Registration Plan (IRP) tag.‍
• International Fuel Tax Agreement (IFTA) decal.

These registrations all require up-front payment. When you’re documenting this process, you’ll want to link the appropriate websites. That way, whenever you do buy a new truck, you have a ready-made list of all the registration sites you’ll need to visit in one easily-accessible place.

Updating your vehicle maintenance records.

The Federal Motor Carrier Safety Administration (FMCSA) has strict regulations about the maintenance and upkeep of commercial vehicles. They require the documentation of all maintenance-related activities, which include inspections, regular servicing, and repairs.

You’ll need to keep a record of the following:

• The informational record (kept for as long as the vehicle is in service plus an additional six months after the vehicle leaves service). This includes:
  a. Fleet number (if assigned one).
  b. Make, model, and year.
  c. VIN.
  d. Tire size.
  e. Owner (if not the carrier).
• A maintenance schedule, including the date of the last service and the next time it is due for service.
• Records of all inspections, maintenance, lubrication, and repairs (kept for one year while the vehicle is in service, plus six months after the vehicle leaves service).
• Copies of roadside inspection reports with the carrier’s official signature (kept for one year).
• Daily Vehicle Inspection Reports (DVIRs) (kept for three months).
• Copies of periodic (annual) inspections (kept for 14 months).

It’s especially important to have everything documented. Not only will you need the documentation in case of an audit — as Adam says, “every new carrier will have to go through an audit” — but the reports will help you keep track of what parts need to be replaced and when. (The FMCSA also has guidelines for the age and amount of wear for specific parts.)

Start a process of digitizing every inspection, maintenance, and repair report. You can decide to do these as the reports come through or on a regular basis (like weekly or bi-weekly). You might even want to consider looking into fleet management software, which can store and track your reports for you.

2. Hiring new drivers.

Just like a Formula 1 racecar needs a driver, so does your truck. And with an average turnover rate around 100% per quarter, you’re always going to be hiring new drivers. 

You know what that means: You’ll need a standardized procedure for hiring new drivers so that you can be confident you’ve got the best ones on the road.

Hiring process.

Every business’ hiring process will look slightly different, but there are a few items you need to check off your list before you can formally introduce a driver to your team. Here’s an example SOP for hiring new truck drivers:

1. Put out a job listing. This should include essential information like base payment, driver expectations, your expectations, and any perks you offer.
2. Have applicants fill out a driver employment application. This is especially important because you’ll need it for their Driver Qualification File — more on that later.
3. Conduct an interview. This is when you’ll determine whether your applicant has the qualities to be a responsible driver for your business.
4. Send their Commercial Driver’s License (CDL) to your insurance company. Not all insurance companies were created equal, so you need to make sure that your insurance company will actually add your prospective driver to your policy. ‍
5. Do a background check. You want qualified and safe drivers on your team, so it’s crucial that you do a background check before moving forward (make sure to get their signed consent before doing the background check). That includes:
   a. The FMCSA Drug & Alcohol Clearinghouse check.
   b. License check.
   c. Motor Vehicle Record (MVR) check.
   d. Employment verification.
6. Sign your candidate up for a pre-employment drug test. Assuming everything is looking good for your candidate, you’ll need to enroll them in a random drug testing program. They’ll have to do a pre-employment test before they can start driving for you.
7. Have drivers complete a road test. Passing a road test (guidelines provided by the FMCSA) means your driver is finally ready to get on the road.

It’s important to follow the standards set by the FMCSA — failure to do so could be seen as non-compliance.

Driver Qualification File.

Motor carriers are required to have a qualification file for every driver they employ. It will include documents such as their driver employment application (as mentioned above) and their road test certificate. The FMCSA provides a checklist for everything you need to have in your driver qualification file.

The file is made up of both documents collected at the start of your driver’s employment and those updated annually. You should look to create a process where you collect all initial documents as soon as your driver has completed their road test and set reminders for when you need to update the file with annual reviews and certifications.

3. Onboarding new drivers.

Your new driver has passed every test, checked every box on your list, and is pumped to get started — congratulations! But before you can set them up with a truck and send them on their way, there’s one last thing you need to do: onboarding.

Onboarding introduces your drivers to who you are as a business and what you’re trying to accomplish. This time sets them up for success by giving them all the information they need to know to do their jobs confidently.

A bad onboarding means your drivers won’t be prepared for what they might encounter on the road. And a bad onboarding comes from a lack of standardized processes that your drivers can rely on.

According to Adam, “there are no standards for installing procedures and understanding what that needs to look like. It ultimately impacts the driver experience. I can attribute some of the turnover we see in the industry to that.”

So, you can build a good onboarding process by documenting the training that your drivers need to be successful in their roles. For the best onboarding experience, you’ll want to compile all your material in a system like Trainual — one that will be easy for your new drivers to use while also keeping them accountable for their training.

That being said, onboarding at a small carrier is going to look a little different from what you might expect at a typical business. That means the SOPs that you need to document are going to be different, too.

Conducting pre-trip inspections.

Before the start of every trip, your driver should conduct a pre-trip inspection of their truck. Not only will this help you with preventative maintenance, but it also ensures driver safety. You can develop your own pre-trip inspection checklist, but as with everything else in the trucking industry, the FMCSA has certain regulations for the inspection. So, check your own list against the FMCSA’s to ensure you remain compliant.

When documenting the process for your carrier’s pre-trip inspection, your checklist should include (but not necessarily be limited to) the following:

1. Tire pressure.
2. Tread depth.
3. Lights.
4. Windshield wipers.
5. Cabin temperature.
6. Emergency kit.
7. Windshield.
8. Mirrors with swivel mounts.

Note that drivers only need to log one inspection in their hours of service (HOS) each day. The FMCSA no longer requires a pre-trip inspection report, unless drivers find a defect during the inspection.

Using your electronic logging device (ELD).

As of 2015, electronic logging devices (ELD) are required for all commercial drivers for accountability and road safety. Meaning, you should have an ELD in every truck you plan to use — and teach your drivers how to use them.

While your drivers may have commercial driving experience, it’s unlikely that they’ve used the exact same ELD that you have for your trucks. And while ELDs automatically record data like engine hours and vehicle miles to provide your drivers’ records of duty status (RODS), your drivers will still need to know how to operate these unique devices.

You’ll want to document processes for common ELD practices, such as editing or annotating logs and displaying data for authorized safety officials. That way, your drivers won’t have to resort to Google or YouTube to make their ELDs work.

What to do in case of an accident.

Accidents happen, but you don’t want to leave your driver stranded and frantic about what needs to be done in case they’re involved in a collision.

The best way to ease their anxieties? Have the entire post-accident process documented so they’re trained on what to do.

A post-accident process might look something like this:

1. Stop immediately and secure the vehicle.
2. Make sure everyone is safe, then contact the authorities.
3. Protect the area by placing appropriate emergency warning signs.
4. Check your cargo if it’s considered dangerous or could damage the environment.
5. Exchange information with any involved parties. This should include your name, company name, insurance policy information, and driver’s license.
6. Complete a preliminary accident report, making note of the conditions surrounding the accident and taking pictures of the vehicles and scene.
7. Contact the motor carrier and insurance provider.

You’ll also want to create a process for what your responsibilities are post-accident. As the carrier, you’ll need to access ELD documentation, retrieve and process dashcam footage, and work with your driver in case they have to go through drug and alcohol test screenings. Plus, you’ll have to work with your insurance provider to make sure your business is covered.

4. Factoring submissions.

You’re not gonna get a slice of that trucking industry dough if you don’t have a system to get paid. Having a systemized approach to your incoming payments is important for establishing your business’ cash flow, maintaining your operations, and paying your drivers. A disorganized system can lead to outstanding payments from your clients, which will ultimately have a negative impact on your revenue.

While some carriers will invoice and receive payment from their clients directly, many businesses find it more convenient to work with freight factoring companies. These companies will take unpaid invoices from carriers and pay them upfront. That way, trucking carriers don’t have to wait sixty or ninety days for a freight payment. Instead, they have their working capital, and in exchange, the factoring companies take a small percentage of the payment to deal with the process of collecting from clients.

But even with a factoring company making it simple, your business still needs a process for submitting your invoices. An example of that process could look like this:

1. Create an invoice for the client, which should include information like the amount owed, shipping date, shipping origin, and destination.
2. Give the invoice to the driver, who will have it signed upon delivery of the shipment.
3. Have the driver scan the signed invoice with an app on their smartphone and email it to a carrier admin.
4. The admin will submit the invoice, rate confirmation, and bill of lading to their factoring company.
5. Within 24-48 hours, payment should be received from the factoring company.

Again, this process may change depending on the resources you have available to you, as well as the factoring company you choose to work with.

We get it — it’s a lot. But this list of processes just scratches the surface of what it takes to run a successful carrier business. And by documenting these initial processes and putting them together in a centralized place, you’re setting up the foundation for a strong system that will have your business running like clockwork.

In the words of Adam Wingfield: “If you have processes and procedures in place, 100 trucks might feel like one. But if you do not have those in place, running one truck will make you feel like you’re running 100.” Couldn’t have said it better ourselves.

For the original published articles, please refer here.

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