How to Start a Trucking Business (Updated)
It's a good idea to start a trucking business these days.
Hauling businesses and e-commerce, especially those that deal with online deliveries, are billion peso industries with a lot of potential for growth. Both require transportation, which trucking businesses can definitely fill in.
Starting this type of business requires a bit of passion and a lot of elbow grease on your part. But if you're sure it's the one for you, then here are some things you need to know first:
1. Determine how you'll operate
There are two ways you can operate a trucking business:
You can run your business and operate your truck at the same time.
- You are in control of your vehicle and give it the kind of care and maintenance you want.
- You don't need to pay for salaries, health insurance, and other benefits required by the government.
- It gives you more freedom to operate your business.
- You may eventually spend more on capital and operation costs.
You can employ someone as a driver and hire them depending on specific transport jobs.
- You spend less on capital and operation costs.
- You can focus more on running your business.
- Some hired drivers can cheat on profits.
- The vehicles may not get the same care and maintenance that you want.
2. Define your niche
There are many niches in the trucking industry, so you should decide which ones to focus on. The most common ones you can use your trucks for are:
- Dump trucks
- Building supplies haulage
- Mall delivery
- Towing Service
- Moving Company
- Courier Service
- Delivery Van
- Truck Leasing (Rent out your truck)
3. Make sure you meet all the requirements
There are particular laws when it comes to operating a trucking business. You will need to submit them to Philippine Economic Zone Authority (PEZA) for approval.*
Here is a list of requirements that you're going to need:
STANDARD APPLICATION REQUIREMENTS For Companies engaged in
CUSTOMS BROKERAGE (CB), FREIGHT FORWARDING (FF)
and TRUCKING/HAULING SERVICES (T/H)
|1||Letter Request addressed to: Director General LILIA B. DE LIMA|
|2||Endorsement Letters from prospective PEZA clients (at least 1 company)|
Notarized Application Form (provided by PEZA)
|4||Board Resolution authorizing the filing of the application and the designation of representative (notarized)|
|5||List of Employees (Include designation)|
|6||Personal History Statement of Principal Officers – Bio-data|
|7||Audited Financial Statements for the last three years (for new companies which have started operating for only six months, an Audited Balance Sheet is enough)|
|8||Certificate of Registration from SEC (for Corporation and Partnership) and/or Certificate of Registration from DTI (for Single Proprietorship)|
|9||Articles of Incorporation (for Corporation and Partnership)|
|10||BIR Clearance (updated) / Certificate of Registration|
|11||Mayor’s Permit (for the current year)|
|12||Annual Permit to Operate from Philippine Port Authority|
|13||List of Non-PEZA clients|
|14||Schedule of Service Rates (standard)|
|15||For Licensed Customs Brokers: PRC Certificate and ID; and BOC Accreditation|
|16||Authority to Operate from the Civil Aeronautics Board (for Air Freight)|
Certificate of Accreditation from the Philippine Shippers’ Bureau
Name and Address of Agents and /or Principal abroad
|19||Common Bond with Bureau of Customs|
|20||List of Vehicles / Trucks certified and signed by the company’s official.|
|21||Copy of Franchise of LTO – Decision from LTFRB|
|22||OR/CR of Vehicles (must be updated and under the name of the applicant)|
|23||List of drivers and helpers - include bio-data, 2x2 ID picture, clearance from NBI, Police and Barangay|
|24||List of Peza-clients|
|25||Certification of No Derogatory Record from Security Services Dept.|
|26||Xerox Copy of Provisional Authority|
Once approved by the Director General of PEZA prior to the release of the Authority, you will need to submit the following:
- Filing/Application Fee of PhP3,600.00 (For new applicant)
- Franchise Fee (for one year) of PhP6,000.00
- Original copy of Surety Bond in favour of PEZA stating that the company shall file a fidelity or surety bond in the amount of Php100,000.00, which may be increased if found inadequate by the Director General, which bond shall answer for any damages which PEZA may suffer thru the negligence the company or its employees may commit in connection with its operations with PEZA, as well as for any financial obligations that it has assumed and failed to settle according to its agreements or commitments with the Authority.
NOTE: ORIGINAL DOCUMENTS MUST BE PRESENTED TOGETHER WITH THE PHOTOCOPIES
4. Choose the right truck for your business
It's important to choose the right truck specifications (or spec'ing) for your business. Keep in mind that an under spec'ed equipment can overwork or burn out an engine fast, while an over spec'ed one makes you spend more money than needed.
You can learn more about it here. However, we recommend you seek the help of a person who's knowledgeable about trucks if you want to get the most out of your equipment.
5. Get an insurance
Make sure to buy an insurance policy for your truck. This is to ensure that your vehicle is fully protected from damages caused by hauling, accidents, or moving cargo.
Updated on September 2, 2020 by Gail Alcabaza