Trucking Company Sale: What Buyers Ask About

What a buyer is paying for

The earnings of a carrier come from the freight it hauls and the margin left after fuel, driver pay, insurance, equipment costs and maintenance. A buyer will look at revenue per truck per week, miles run, how many of those miles carried a load, and what the company earned per mile after the direct costs. They will want to see it by truck and by customer, because an average can hide a few good trucks carrying several poor ones.

Where the freight comes from matters as much as how much of it there is. A carrier with direct shipper relationships and written rate agreements is worth more than one that lives on the spot market, where rates move every week. Many small carriers get a large share of their loads from freight logistics companies who match shippers with trucks. That work counts as revenue like any other, but the logistics company can send the freight to someone else tomorrow, and a buyer will price in that risk. If a single customer or a single logistics company supplies a big share of your revenue, expect questions about it. Our post on customer concentration explains how buyers think about that.

The lanes you run also matter. A buyer will ask whether you run regional routes that bring drivers home, long hauls, dedicated runs for one shipper, or a mix. Regional and dedicated work usually keeps drivers longer, and driver turnover is where trucking companies lose money quietly.

Drivers, safety and the record

The shortage of drivers is the best known problem in the industry, and a buyer will treat a stable group of drivers as an asset. They will ask how many drivers you employ, how many are company drivers and how many are owner-operators who bring their own trucks, how long each has been with you, and what you pay. Company drivers and owner-operators carry different costs and different legal exposure, and the way you classify them will get a close look. Your attorney and accountant confirm what applies to your arrangement.

Safety records are public in trucking, and a buyer will pull yours. Federal safety scores, inspection results, accident history and out-of-service rates all show up there, and a poor record raises insurance cost and can limit which shippers will use you. If your record has problems, fix what you can before going to market and be ready to explain what changed. A buyer is more forgiving of a carrier that found a problem and corrected it than one that has no answer.

Insurance history ties these together. Underwriters will ask for loss runs, which are the insurer's reports of claims over past years, and a buyer's lender will want to see them as well. Premiums for liability, cargo and physical damage on a trucking company are large, and a buyer will check whether the coverage you carry matches the work you do.

Equipment and the shop

Trucks and trailers are usually the largest assets on the balance sheet. A buyer will want a list of every tractor and trailer with year, make, mileage, condition, who holds the title and what is owed on it. They will compare your fleet age to how long a truck lasts in your type of work, and they will see how much maintenance the fleet needs in the next few years. A fleet that is old and fully paid for can look good on paper and cost a lot to keep running. A newer fleet with heavy loan balances may leave little cash for a buyer.

If you have your own shop, the tools, the technicians and the parts inventory go on the list too. If you rely on an outside shop, a buyer will want to see those invoices. Fuel arrangements, tire programs, trackers, electronic logging systems and any telematics subscriptions should also be listed, with the contracts.

Some carriers lease trucks from a related company that the owner also controls, or own the terminal property in a separate entity. A buyer can handle that, though they will want it clean and written down. Our post on selling a business with real estate attached goes through the options for a yard or terminal.

Records a buyer will ask for

Plan on business tax returns for several years, monthly profit and loss statements, a balance sheet and accounts receivable aging. Receivables deserve extra care in trucking, because carriers wait weeks for payment, and a buyer will check how long shippers take to pay and whether any have stopped. Factoring agreements, where a finance company advances cash against invoices, should be disclosed and their terms explained.

Beyond the financials, expect requests for a list of trucks and trailers, driver roster with pay and tenure, driver qualification files, maintenance records, safety and compliance reports, insurance policies and loss runs, customer contracts and rate agreements, and fuel tax records. Keep them in one folder. A carrier that can produce each of them in a day gives a buyer confidence about what is not in the folder.

What has to transfer

A trucking company needs federal operating authority, and its safety history is attached to that authority. In many deals the buyer purchases the company itself rather than only its trucks, in order to keep the authority, the history and the customer relationships intact. In others, a buyer prefers to buy the assets only and start fresh. That choice affects taxes, liability and insurance, and it is worth reading our post on asset sales and stock sales before you talk to a buyer.

Insurance policies generally do not transfer automatically, and a buyer will need to place their own coverage at closing. Customer contracts and shipper onboarding may need consent. Equipment loans and leases often have clauses that require the lender's approval. Drivers carry licenses and medical certifications that stay with them, and their employment moves to the new owner according to how the deal is structured. Rules vary by state and your attorney confirms what applies to your operation.

What tends to sink a trucking sale

In most of the carrier deals we see, one of a handful of things comes up. The safety record was worse than the owner said. Insurance quotes for the buyer came back higher than the seller paid. One customer or logistics company accounts for most of the freight and will not commit to the new owner. The owner dispatches every load and personally knows every driver and shipper. Equipment has loans that exceed what it would bring if sold. Or the owner has been paying some drivers or expenses in ways that do not show up in the returns, and the earnings the buyer can document are lower than the earnings the owner remembers.

Getting ready

Look at your safety scores and fix what can be fixed. Get your best customer relationships into written rate agreements. Make sure your books can be tied to your tax returns and your fuel and mileage records. Put someone besides yourself in charge of dispatch and customer contact for a period before the sale, so a buyer can see the company run without you.

We prepare a valuation from your own numbers, assemble what a lender and underwriter expect, and screen buyers for capital and trucking experience. You can read more about selling a general freight trucking company on our industry page, and a conversation with us is a good next step.

This article shares our opinion and general information. It is not legal or tax advice. Always speak with a licensed attorney for legal advice, and a qualified tax professional for tax questions, before you act.