Starting a Delivery &
Logistics Business
The complete, focused guide for light-vehicle delivery and logistics operators — cargo vans, sprinters, and light trucks. Stripped of heavy trucking complexity. Built for the operator ready to move.
Working With
Here's What You Don't Have to Deal With
Staying under the 10,001 lb GVWR threshold exempts you from the most burdensome federal transportation regulations. No full FMCSA DOT compliance program, no CDL hiring restrictions, no ELD devices, no Hours of Service log enforcement, no DOT medical examiner certificates, no driver qualification file bureaucracy. Your compliance stack focuses on business formation, insurance, basic federal authority if interstate, state registration, and driver background checks. That's it.
General Freight & Parcels
Standard packages, boxes, palletized goods. The broadest category — serves e-commerce, retail, B2B. Highest volume, most competitive market.
Food & Restaurant Delivery
Meal delivery, catering, grocery. Platform-driven at consumer level, direct-contract at wholesale. May require food handler permits depending on state.
Construction & Building Materials
Lumber, tools, supplies, fixtures. Strong B2B demand. Often project-based with good margins. Cargo tie-down and load securement requirements apply.
B2B & Office Delivery
Documents, supplies, equipment, courier services. Recurring contracts possible. High-frequency routes with good density economics.
Refrigerated / Temperature-Sensitive
Flowers, produce, specialty goods. Requires refrigerated van investment. Premium pricing offset by vehicle cost. Small but defensible niche.
Furniture & White Glove
Large item delivery with assembly or placement. Higher per-delivery rates, lower volume. Often needs two-person crews. Good early margin.
Even under 10,001 lbs, transporting hazardous materials that require placarding triggers additional federal requirements including hazmat training, shipping paper requirements, and potentially placarding rules. If you plan to carry anything hazardous — chemicals, certain batteries, flammables in quantity — research 49 CFR Parts 171–180 before launching.
Foundation
Form an LLC or Corporation
Sole proprietorship leaves your personal assets exposed to every accident claim, cargo dispute, and lawsuit. An LLC is typically the right structure for small operators — limited liability protection with pass-through taxation. File with your Secretary of State. Most states process online within 1–5 business days.
Obtain an EIN (Employer Identification Number)
Federal tax ID for your business entity. Required before opening a business bank account, hiring anyone, or filing business taxes. Apply free at IRS.gov — takes 5 minutes and the number is issued immediately online.
Open a Business Bank Account
Clients, shippers, and platforms will not pay to personal accounts. Mixing business and personal finances also destroys your LLC liability protection — courts can "pierce the veil" if you comingle funds. Requires EIN and entity formation documents.
Local Business License
Most cities and counties require a general business license for any operating business. Check both city and county requirements separately — in many areas both apply. Costs typically $50–$500/year.
Sales Tax / Seller's Permit
Some states treat transportation and delivery services as taxable. Others exempt them. This varies significantly by state and even by the type of delivery service. Research your specific state's treatment before invoicing clients — collecting the wrong amount (or none) creates liability.
Registered Agent
Your LLC needs a registered agent — a person or service that can receive legal documents on behalf of your company. Can be yourself if you have a physical address in the state, or a registered agent service ($50–300/year). Required by most states as part of entity formation.
Requirements
USDOT Number
Technically optional for intrastate operators under 10,001 lbs not carrying hazmat. However, many shippers, freight brokers, and platform marketplaces require one as a condition of doing business regardless of your vehicle weight. It's free, and getting it signals professionalism to commercial clients. Apply at FMCSA's registration portal (safer.fmcsa.dot.gov).
Operating Authority — MC Number
Required if you cross state lines for compensation, even in a cargo van. This is a Motor Carrier of Property authority issued by FMCSA. The $300 application starts a mandatory 10-business-day protest period before authority is granted — plan for 4–6 weeks total from application to active authority. Operating interstate without it is a federal violation.
BOC-3 — Process Agent Filing
Required alongside Operating Authority. Designates a legal process agent in every state where you operate so courts can serve you with legal process. Filing services handle this for $30–75 one-time. You cannot receive an active MC Number without completing this filing first.
UCR — Unified Carrier Registration
Annual fee paid by interstate carriers. Starts at $76/year for 1–2 vehicles. Must be renewed annually to maintain active operating authority. Can be completed online through the UCR registration system.
Starting operations within a single state eliminates the need for Operating Authority, BOC-3, and UCR — saving time, money, and complexity at launch. Once you have stable revenue and route density, adding interstate authority is straightforward. Most successful small operators start intrastate and expand.
Requirements
Commercial Vehicle Registration
All vehicles used for commercial purposes must be registered as commercial vehicles with your state DMV. Fees vary by vehicle weight class and state. Light commercial vehicles typically pay $200–600/year in registration fees depending on the state.
State DOT or Carrier Registration Number
Several states require a separate state-issued carrier registration number for intrastate commercial operations, separate from the federal USDOT number. California, New York, New Jersey, and Texas are the major examples. Contact your state's DOT or transportation department to confirm requirements.
Specialty Permits by Delivery Type
Certain delivery types trigger additional state-level permits. Food delivery (food handler permits, health department oversight in some states). Alcohol delivery (liquor license involvement). Firearms or tobacco transport (state-specific dealer or transporter permits). Know what you're delivering before assuming standard registration is sufficient.
California — Highest Burden
Requires CA Motor Carrier Permit for any commercial carrier. AB5 makes independent contractor driver classification extremely risky — most 1099 driver arrangements are invalid. Strong emissions standards affect vehicle choices.
New York — Significant Overlay
NY DOT registration required for most intrastate carriers. NYC has specific truck route restrictions. Local operating permits may be required for certain boroughs.
Most Other States — Simpler
Standard federal framework applies with minimal state-specific overlays. Texas, Florida, Illinois, and most Midwest/Southeast states are generally more business-friendly environments for new operators.
Requirements
Your commercial auto policy does not cover the goods you're carrying. If you damage or lose a client's cargo, auto liability pays nothing for it. You need separate cargo/inland marine coverage. Every serious shipper and freight broker will require it. Running without it means one cargo claim can wipe out months of profit.
| Coverage | Why You Need It | Typical Minimum | Who Requires It |
|---|---|---|---|
| Commercial Auto Liability | Covers damage to other vehicles/people if you cause an accident | $300K–$1M | Required by lawShippers |
| Cargo / Inland Marine | Covers goods in your care, custody, and control during transit | $50K–$250K | BrokersShippers |
| General Liability | Covers bodily injury/property damage not involving vehicle operation | $1M / $2M | B2B Clients |
| Workers Compensation | Covers employee injuries on the job | State law | Required if employees |
| Non-Owned / Hired Auto | Covers vehicles you rent or that contractors drive for you | Add-on to CGL | Recommended |
| Annual Estimate — 1–3 Vans, Intrastate | $6,000–14,000/yr | Varies by state, driving record, cargo type | |
Commercial transportation insurance is a specialty. A standard business insurance broker won't understand cargo coverage nuances, shipper certificate requirements, or how to structure a policy for a multi-van operation. Find a broker who specifically handles transportation or trucking risks. The premium difference between a well-structured policy and a poorly-fit one can be $2,000–4,000/year.
Requirements
No CDL. No DOT medical examiner certificates. No formal driver qualification files. No random federal drug testing program. No pre/post trip inspection logs. No hours of service limitations. Your drivers just need a standard driver's license appropriate to the vehicle class.
Valid Driver's License (Standard, Not CDL)
Standard state driver's license. Must be current and valid for the vehicle class operated. Verify at hire and establish a process for ongoing checks — a license that expires or gets suspended is an insurance and liability issue.
Motor Vehicle Record (MVR) Check
Pull MVR at hire and annually. Your insurance carrier will require it to bind commercial auto coverage and may run their own checks. A driver with DUIs, reckless driving, or multiple at-fault accidents can make you uninsurable or dramatically increase your premiums. 3-year lookback is standard.
Background Check
Criminal background check at hire — especially critical if drivers will enter client facilities, homes, or handle high-value goods. Commercial clients will often require this contractually. 7-year lookback is standard. Cost: $20–50 per driver through a third-party background check service.
Pre-Employment Drug Screening
Not federally mandated at this weight class, but a reasonable operational practice. Some clients — particularly healthcare, food service, and corporate shippers — will require it contractually. At-home accidents caused by impaired drivers create significant liability.
This is one of the most litigated issues in the gig economy. If you use 1099 independent contractors instead of W-2 employees, they must have genuine independence — set their own hours, work for multiple clients, use their own vehicles. Many states (California AB5, New York, and others) have very restrictive definitions of what qualifies as an independent contractor. Misclassification results in back taxes, penalties, and liability for their on-the-job actions. Consult a labor attorney for your specific state before choosing a structure.
Documentation
📋 Bill of Lading (BOL) Every Load
The foundational document for freight. Describes the goods, origin, destination, quantity, and terms of carriage. Properly executed BOLs are your primary protection in cargo claims. Without one, you have no documentation of what you received, what condition it was in, or what you were supposed to deliver.
✍️ Proof of Delivery (POD) Every Delivery
Signed delivery confirmation from the recipient. Without POD, collecting payment is difficult and disputing cargo claims is nearly impossible. Electronic signature capture apps (Onfleet, Track-POD, Route4Me) handle this efficiently and create an audit trail.
🤝 Service Agreement Per Client
Master contract defining your relationship with recurring clients — services, pricing, payment terms, liability caps, insurance requirements, and termination provisions. Have a business attorney draft a template. Using clients' own agreements is common but always have a lawyer review before signing anything that limits your rights.
💳 Rate Confirmation Brokered Loads
When hauling loads arranged through freight brokers, the rate confirmation sheet confirms the load details, payment amount, and terms. Read it carefully — they often contain indemnification provisions and cargo claim procedures that significantly affect your liability exposure.
📄 Certificate of Insurance Per Client
Your insurance broker issues certificates naming specific clients as additional insureds. Clients and brokers will request these before giving you any load. Build a process for rapid issuance — slow certificate delivery loses business.
🚐 Vehicle Inspection Records Recommended
Simple pre/post trip inspection checklists — not federally mandated at this weight class, but valuable for safety and as evidence if a client claims delivery damage occurred due to vehicle condition. Creates a defensible record for insurance purposes.
Shippers and commercial clients commonly pay on net 30 or net 60 terms. You haul a load today and get paid 30–60 days later. New operators frequently run out of cash waiting for receivables. Build at least 60 days of operating costs as a cash reserve before launch, or explore freight factoring — companies that purchase your invoices for immediate cash at a 2–5% discount.
Marketplaces
Sequence
Form LLC + Get EIN
File your LLC with your Secretary of State online. Apply for EIN immediately at IRS.gov — same day. You need both before you can open a bank account or sign any contracts.
Open Business Bank Account + Get Local Business License
Take your LLC formation documents and EIN to your bank. Simultaneously apply for your city/county business license. Both are straightforward once you have the entity documents.
Get USDOT Number (Free)
Register at safer.fmcsa.dot.gov. Takes 15 minutes. Even if not technically required for intrastate under 10,001 lbs, get it — it signals credibility to commercial clients and is required by many brokers and shippers.
Secure Commercial Insurance
Contact a transportation-specialist insurance broker. Get quotes for commercial auto ($1M), cargo/inland marine ($100K minimum), and general liability ($1M/$2M). You cannot legally operate without commercial auto — and you're unprotected without cargo coverage.
Register Vehicle(s) Commercially
Register each vehicle as a commercial vehicle at your state DMV. Bring proof of insurance, LLC documents, and EIN. This is also when you add your USDOT number to the vehicle registration (required in some states).
Background Check All Drivers + Verify MVRs
Run background checks and MVR pulls on yourself and any drivers before anyone touches a delivery vehicle commercially. Use a third-party service (Checkr, Sterling, HireRight). Costs $30–75 per driver total.
Set Up Dispatch + Route Optimization
Even one van benefits from a simple dispatch and route optimization system — Google Maps isn't enough once you have 10+ stops/day. Tools like Onfleet, Route4Me, or OptimoRoute provide route optimization, customer notifications, and POD capture in one system. $50–200/month.
Apply to Platforms + Begin First Client Outreach
Apply to 2–3 delivery platforms for immediate volume while simultaneously doing direct outreach to 10–20 local businesses that might need recurring delivery. Build density in a defined geographic zone first — expand geography only after routes are profitable.
Add these steps between steps 3 and 4: Apply for Operating Authority (MC Number) at safer.fmcsa.dot.gov — $300, allow 4–6 weeks. File BOC-3 process agent — $30–75, do this same day as MC application. Register for UCR — $76/year. Do not begin interstate deliveries until MC Number is active and insurance is bound with FMCSA filing.
Budget
🚐 Light Van Operation — 1 to 3 Vehicles, Intrastate
At $12/delivery average, a driver doing 40 stops/day generates $480/day in revenue. Driver cost (W-2 with overhead) runs ~$200–250/day. Vehicle, fuel, maintenance, and insurance add ~$80–120/day. That leaves $110–200/day gross margin per vehicle — before your overhead. Route density is everything. 40 stops in a 10-mile zone is profitable. 40 stops spread across 60 miles is not.
This is One of the Most Accessible Business Models Available
Compared to nearly any other business category, light vehicle delivery has a low capital requirement, fast time-to-first-revenue, and a compliance burden that's genuinely manageable. The path from LLC formation to first paid delivery can be completed in 3–4 weeks. What separates successful operators from those who wash out isn't the compliance — it's operational discipline, route density, and pricing accuracy. Know your true cost per mile. Own a dense territory. Build direct client relationships as fast as possible. The rest follows.