6 things to consider when starting a drayage company

Estimated reading time: 3 minutes

According to U.S. Customs and Border Protection, more than 11 million containers come into our nation’s ports every year. That means owner-operators who run drayage trucking businesses are in high demand.

If you’re looking to tap into this area of business, you can begin with these six things to consider when starting a drayage company.

6 things to consider when starting a drayage company

1. Gain some driving experience

Many owner-operators get their start as company drivers before establishing their own trucking business. Not only will this give you an opportunity to learn the industry, but most trucking companies require some company driver experience before leasing-on as an owner-operator.

For example, port dray owner-operators who do business with Schneider must have at least six months of Class A CDL driving experience prior to applying for a lease opportunity.

2. Lease or purchase a truck.

Your truck will be your business’ most important asset. There are a number of ways you can acquire a semi-truck as an owner-operator, and it will be up to you to decide which is the best route for you and your business.

Many owner-operators start their drayage company by purchasing a used truck; Some may also lease a new or used truck.

Different carriers may have specific truck requirements. Schneider requires that port dray owner-operators operate a truck that is 2000 (2010 in California) or newer and can pass EPA 10 emissions requirements, as well as a DOT inspection.

3. Choose your business structure.

There are a few different ways to set up your drayage company. Sole proprietorships and limited liability companies are two of the most common business structures for owner-operators.

A sole proprietorship is usually less expensive than a limited liability company (LLC) but doesn’t have some of the liability protections that an LLC provides. However, setting up an LLC usually involves more steps than a sole proprietorship, and usually has some additional paperwork that needs to be completed and filed.

What structure you use will depend on your individual facts and circumstances, so we recommend consulting your lawyer and accountant to help you make the best possible decision.

4. Apply for a Transportation Worker Identification Credential (TWIC) card.

A TWIC card is a unique identification card issued by the Transportation Security Administration (TSA) and U.S. Coast Guard. It’s used to access secure areas of the port facilities without supervision, so you’ll need one as an owner-operator who works in drayage.

As of 2021, a TWIC card costs $125.25 for a five-year registration.

You can begin registering for a TWIC card by filling out an application online through the TSA website. You’ll then need to schedule an appointment at the nearest TWIC application center to:

• Provide required documentation.
• Be fingerprinted.
• Take a facial photo.
• Present a current U.S. passport or a driver’s license and birth certificate.

5. Secure all necessary documentation and insurance.

There’s other documentation you may need to obtain before doing business as an owner-operator. Business requirements and documentation costs may vary depending on your state, carrier or individual circumstances. Some examples for port dray owner-operators could include:

• Employer Identification Number (EIN) – Register online through the IRS’s website.
• Base plates, permits and licenses – Many carriers will register these items on your behalf.
• Trucking insurance – Ask the company you lease-on with about their semi-truck insurance requirements, and consult with your legal counsel about what other types of insurance might be appropriate.

6. Lease-on with a drayage carrier.

Once you’ve got all the experience, a truck and the business paperwork to start doing business, it’s time to start applying to drayage business opportunities in your area.

Leasing-on with a carrier can provide the stability and predictability you need to establish your business. Most major carriers allow owner-operators to apply for business opportunities online.

Right now, Schneider has port dray opportunities in Savannah, Ga., Houston, Phoenix, Norfolk, Va., Elwood, Ill. and Los Angeles.