10 Mistakes That Kill New Trucking Businesses in Year One
We've helped over 1,000 new authorities get started. These are the patterns we see in the ones that don't make it — and what the survivors do differently.
The hard truth: About 75% of new trucking companies fail within the first two years. Not because trucking is impossible — but because the same avoidable mistakes keep happening. This isn't a motivational speech. It's a field guide to what actually goes wrong, based on what we see every day working with new authorities across 42 states.
Starting Undercapitalized
The mistake: Thinking you just need a truck and a DOT number to start making money.
Most new owner-operators budget for the truck payment, fuel, and maybe insurance. They don't budget for:
The 21-day waiting period after your MC number is issued means you're paying for insurance, truck payments, and living expenses before you haul a single load. If you're stretched thin before day one, one breakdown or one slow-paying broker puts you out of business.
What to do instead
Save 3-6 months of operating expenses before getting your authority. If you can't do that, consider leasing onto a carrier first to build cash reserves and experience. There's no shame in driving under someone else's authority while you prepare. The truckers who survive are the ones who start with a cushion.
Buying the Wrong Insurance (or Not Enough)
The mistake: Getting the minimum liability coverage and nothing else, because "that's all FMCSA requires."
Yes, FMCSA requires $750,000 in liability coverage for general freight carriers. And that's what most new authorities buy — the legal minimum and nothing else.
Here's what that gets you: not much.
A serious accident with injuries can easily exceed $750,000. One multi-vehicle pileup and you're personally liable for everything above your policy limit. That means your truck, your house, your savings — everything is on the table.
Beyond liability, there are coverages that aren't legally required but are practically essential:
- Physical Damage — If your truck is financed or leased, the lender requires this. But even if you own it outright, can you afford to replace a $80,000 truck out of pocket after a wreck?
- Cargo Insurance — Most brokers won't give you loads without it. Standard is $100,000. If you're hauling high-value freight, you may need more.
- Bobtail/Non-Trucking Liability — If you're leased to a carrier, their insurance only covers you when you're on dispatch. Driving home? Running to the shop? You're uninsured unless you have bobtail.
- Occupational Accident — You're an independent contractor. You don't have workers' comp. If you get hurt and can't drive, this is what pays the bills.
What to do instead
Talk to your agent about what you actually need, not just the legal minimum. A good agent will explain each coverage, what it protects, and help you decide what's worth the cost. Use our Coverage Wizard to see what applies to your operation.
Ignoring FMCSA Compliance Until It's Too Late
The mistake: Thinking compliance is just about having your DOT number and insurance.
Getting your authority is step one. Staying compliant is a permanent job. New authorities have 18 months to pass a safety audit (the New Entrant Safety Audit). Fail it, and your authority gets revoked.
What catches new carriers off guard:
- MCS-150 updates — You must update your registration every 24 months (by the last day of the month you were assigned your DOT number). Miss it and your DOT goes inactive.
- Driver Qualification Files — Even if you're the only driver, you need a complete DQ file on yourself. Medical card, MVR, road test certificate, application — all of it.
- Vehicle inspection records — Annual inspections must be on file. Daily pre/post-trip inspection reports must be kept for 3 months.
- Hours of Service records — ELD mandate means electronic records, and FMCSA can audit them.
- Drug & Alcohol testing — Required from day one. Not "when you get around to it."
We've seen carriers get their authority revoked 16 months in because they didn't know about the New Entrant Audit until the FMCSA investigator called. By then it's too late to assemble the paperwork.
What to do instead
Set up your compliance files on day one. Use our DOT Compliance Self-Audit to check every requirement. Create a folder (physical or digital) for driver files, vehicle files, and drug testing records. Start filling it immediately. When the audit comes, you'll be ready.
Chasing the Cheapest Insurance Rate
The mistake: Calling 15 agencies expecting to find a drastically different price.
Here's the uncomfortable truth about trucking insurance for new authorities: everyone has access to the same 3-4 carriers at basically the same rates.
For new ventures (under 2 years of authority), the market is limited. Progressive, Berkshire Hathaway Homestate (BHHC), and a handful of others are willing to write the policy. Rates are set by the carrier's underwriting algorithms, not by the agent selling the policy.
That agency promising to "shop 50 carriers" for you? For a new authority, they're going to the same places we are. The price will be within a few hundred dollars no matter who you call.
What happens when you chase the cheapest price:
- You waste days calling agencies when you could be setting up your business
- You end up with an agent who won the sale on price and has no incentive to help you
- When you need a certificate at 6am to pick up a load, nobody answers
- When your renewal comes and the rate changes, nobody explains why
What to do instead
Get 2-3 quotes to confirm you're in the right range. Then pick the agent who answers the phone, explains things clearly, and seems like they'll actually be there when you need help. The price difference between agents is small. The service difference is enormous. Read more about why pricing works this way.
Running Loads Without Cargo Insurance
The mistake: Thinking "I'll add cargo coverage later once I'm established."
Cargo insurance isn't technically required by FMCSA for all carriers (though it is for household goods movers and brokers). But here's reality:
- 90%+ of freight brokers require proof of cargo insurance before they'll give you a load
- Most shippers require it in their contracts
- Load boards require it to be listed on your profile
- Without it, you're limited to loads from personal connections only
We've had carriers call us frantic because they just got their first load offer from a broker and can't prove cargo coverage. Rushing to bind cargo insurance same-day is possible, but it's stressful and sometimes the carrier won't bind it that fast.
Cost? Typically $1,500 - $3,000/year for $100,000 in cargo coverage. That's $125-$250/month. One load of damaged freight without coverage can cost you $50,000+.
What to do instead
Add cargo insurance when you bind your liability policy. Don't separate them. Your agent should be recommending this — if they're not, that tells you something about the kind of help you're getting.
Not Maintaining Driver Qualification Files
The mistake: "I'm the only driver, I don't need a driver file on myself."
Wrong. FMCSA requires a complete Driver Qualification (DQ) file for every driver, including owner-operators driving their own truck. The file must contain:
- Application for employment — yes, even for yourself
- Motor Vehicle Record (MVR) — pulled annually from your state DMV
- Medical examiner's certificate — valid DOT physical card (every 2 years)
- Road test certificate — or equivalent (CDL counts)
- Annual review of driving record — documented review of your MVR
- Previous employer inquiries — for the past 3 years
During a New Entrant Safety Audit, the FMCSA investigator will ask to see your DQ files first. If they're incomplete or missing, that's a violation for each missing item.
What to do instead
Build your DQ file the day you get your CDL medical card. Keep it organized in a labeled folder. Set calendar reminders for annual MVR pulls and medical card renewals. It takes an hour to set up and 30 minutes a year to maintain.
No Vehicle Maintenance Program
The mistake: Fixing things when they break instead of keeping records of preventive maintenance.
FMCSA requires a systematic vehicle maintenance program (49 CFR Part 396). That means:
- Annual vehicle inspections — by a qualified inspector, documented and kept on file
- Pre-trip and post-trip inspection reports — daily, kept for 3 months
- Maintenance records — every repair, every oil change, every tire rotation. Kept for 1 year + 6 months after vehicle disposal
Roadside inspections are where this really hurts. A DOT officer pulls you over, finds maintenance violations, and puts your truck out of service. Now you're stuck on the side of the road losing money. Those violations go on your CSA score, which affects your insurance rates and your ability to get loads.
Your CSA score follows you. Bad inspections from year one will affect your insurance premiums for years.
What to do instead
Keep a maintenance log — paper notebook or a simple app. Record every service. Get your annual inspection done on time. Do your pre-trip every single day and keep the forms. When the inspector asks "where are your records?" you hand them a folder, not a blank stare.
Growing Too Fast (Adding Trucks Before You're Ready)
The mistake: Adding a second or third truck before the first one is profitable.
The math looks simple: one truck makes $X, so two trucks make $2X. In reality:
- Each truck adds insurance cost (and your per-truck rate may go up)
- You now need drivers, which means DQ files, drug testing, supervision
- Maintenance costs multiply (and maintenance on trucks you don't drive yourself tends to be worse)
- One bad driver can wreck your CSA score and raise insurance for your entire fleet
- Cash flow gets thin — you're funding two truck payments, two insurance policies, two fuel bills
We've seen carriers go from one profitable truck to three unprofitable ones in 6 months. The overhead of managing drivers and additional compliance requirements eats the margin.
What to do instead
Master one truck first. Run it profitably for at least a year. Build reserves. Understand your true cost per mile. Then add a second truck with cash to spare. The successful fleets we insure grew slowly and methodically — not because they were timid, but because they were smart about cash flow.
No Drug & Alcohol Testing Program
The mistake: "I'm the only driver and I don't do drugs. I don't need a testing program."
FMCSA doesn't care if you're clean. The regulation requires a program — documented, enrolled, active from the day you start operating.
What's required:
- Pre-employment test — before you drive under your own authority (even if you're the only driver)
- Random testing pool — you must be enrolled in a consortium for random selection
- Post-accident testing — required after certain types of accidents
- Reasonable suspicion testing — required if there's cause
- Supervisor training — if you have drivers, someone needs training on identifying substance abuse signs
- Written policy — your drug and alcohol policy must be documented and provided to all drivers
Consortium enrollment typically costs $150-$300 per year. Getting caught without a program during an audit can result in your authority being revoked.
What to do instead
Enroll in a drug & alcohol consortium before you take your first load. Many third-party administrators (TPAs) handle everything for a flat annual fee. Your pre-employment test should be done before day one of operations. This is one of the first things an FMCSA auditor checks.
No Plan for Renewal Shock
The mistake: Not budgeting for what happens when your first-year insurance policy renews.
Here's what happens at renewal for most new authorities:
- Your rate might go up — especially if you had claims, violations, or your CSA score deteriorated
- Your rate might go down — if you ran clean, your second year typically sees some improvement
- Your current carrier might non-renew you — they offered you a policy to get market share, but after a year they decided your risk profile isn't worth it
- You might suddenly have more carrier options — at the 2-year mark, the market opens up significantly
The problem? Most new carriers don't know renewal is coming until they get the notice 30-60 days before expiration. If there's a rate increase, they haven't budgeted for it. If they get non-renewed, they're scrambling to find new coverage.
A lapse in insurance — even for one day — can result in FMCSA revoking your operating authority. Getting it back is possible but expensive and time-consuming.
What to do instead
Start renewal conversations with your agent 90 days before expiration. Budget for a 10-20% increase in your first renewal (hope for a decrease, prepare for an increase). If your agent isn't proactively reaching out about renewal, that's a red flag. At RMS, we start the renewal process early and explain exactly what changed and why.
The Pattern Behind All 10 Mistakes
Look at the list again. Every mistake has the same root cause: not knowing what you don't know.
Trucking is a regulated industry. The barriers to entry are real — not to keep you out, but because a 40-ton truck on the highway is genuinely dangerous if the operator doesn't know what they're doing. The regulations exist to protect everyone, including you.
The truckers who survive year one are the ones who:
- Started with enough cash to absorb surprises
- Got the right insurance from an agent who explained it
- Set up compliance systems from day one
- Grew slowly and kept their records clean
- Asked questions before they became problems
That's not complicated. It's just disciplined.
Starting your trucking business?
We work with new authorities every day. We know the pitfalls because we've watched hundreds of carriers navigate them — and we've seen what works. If you want an agent who'll explain things honestly and help you avoid these mistakes, give us a call.