How to start a final-mile delivery business

What final mile is

Final mile (also called last mile) is the delivery from a warehouse, store or cross-dock to the end customer, usually a home or a business. For box trucks and cargo vans it mostly means big and bulky freight: furniture, mattresses, appliances, fitness equipment, and retail or LTL freight that has to go the last few miles. This page is about running that as a business. For general box truck and van freight, see how to get box truck loads and how to start a cargo van business.

Customers sell different service levels. The names aren't set by law and each company defines them its own way, but they usually look like this:

Before you accept work, get the customer's written definition of each level: what's included, stairs, haul-away, whether you install anything that connects to water, gas or power, and what happens when the item won't fit through the door. Install work can need a license under state or local rules, so ask before you say yes.

Truck and equipment

• The truck: a 26-ft box truck with a liftgate is the common choice for big and bulky routes, because homes have no dock. Smaller box trucks and cargo vans fit parcel-size, smaller furniture and retail work. Customers will ask for your box length, door size and payload. The box truck vs cargo van guide compares the two.
• Moving gear: appliance dolly, furniture dollies, a hand truck and a pallet jack for palletized freight.
• Protection: plenty of moving pads, floor runners and door jamb protectors. Damage to a customer's home can cost more than damage to the freight.
• Securement: e-track or logistic posts with straps and load bars, so stops in the back don't shift when you open the doors.
• Tools for assembly and install work, if you offer it.
• A phone app for routing, proof-of-delivery photos and customer signatures. Many customers require their own app.

Federal rules by weight

This covers federal rules for general freight. Hazmat and state rules can change the answer. It's general information, not legal advice.

• The weight line: under 49 CFR 390.5T, a vehicle in interstate commerce with a GVWR or gross weight of 10,001 lb or more is a commercial motor vehicle. Check the sticker in the driver's door jamb.
• Insurance under 10,001 lb: the $750,000 minimum in 49 CFR 387.9 doesn't apply to vehicles under 10,001 lb GVWR (387.3(c)), except for certain hazmat. But if you hold MC authority, FMCSA's filing rule (387.303T) still requires $300,000 for a fleet of only vehicles under 10,001 lb. Add one box truck and the fleet needs $750,000.
• When MC authority applies: you need it when you haul for pay across state lines in your own name. If you work only under another carrier's authority as its contractor, or only inside one state, it may not apply. Your contract should say whose authority the freight moves under.
• Hired by the homeowner? When the household pays you to bring home furniture it bought from a store, federal law can treat that as household goods (49 U.S.C. 13102), which has its own authority and consumer rules. Deliveries arranged and paid for by the retailer don't fall in that definition.
• Intrastate work: many states require a USDOT number for commercial vehicles that never leave the state. FMCSA lists those states on its Do I Need a USDOT Number? page. Check your state too.

The full setup steps are in the box truck authority checklist.

Hours of service on local routes

If your truck is a commercial motor vehicle, the hours of service rules apply. Final-mile routes usually start and end at the same warehouse, which is what the short-haul exceptions are built for.

• 150 air-mile exception (395.1(e)(1)): no logs and no ELD if you stay within 150 air miles (172.6 statute miles) of your normal work reporting location, return there and are released within 14 consecutive hours, and get at least 10 consecutive hours off between shifts. The carrier must keep time records for 6 months: time on duty, total hours each day, and time released.
• Non-CDL short-haul (395.1(e)(2)): for trucks that don't need a CDL, within 150 air miles and returning to your reporting location at the end of each shift. You can't drive after the 14th hour on duty on 5 days of any 7, or after the 16th hour on 2 days of any 7. Time records are kept the same way. The other limits, such as 11 hours of driving and the 60/70-hour limit, still apply.
• No 30-minute break is required for drivers who qualify for either short-haul exception (395.3(a)(3)(ii)).
• No ELD: FMCSA says drivers who use the short-haul timecard exceptions don't have to keep logs or use ELDs.
• Holiday retail deliveries (395.1(f)): from December 10 to 25, drivers making only local deliveries from retail stores to the end customer, within 100 air miles of their reporting location, are exempt from the driving-time limits in 395.3(a) and (b).

Made-up example: a driver reports to the warehouse at 6:00 and is released at 19:30. That's 13.5 hours, inside 14, so the 150 air-mile exception covers the day. If a late install keeps the crew out until 20:30, the day is 14.5 hours and that exception doesn't cover it, so the driver needs a record of duty status for that day. Under the non-CDL exception, that same day can still fit if it's one of the 2 allowed 16-hour days in the last 7.

See the hours of service guide and the ELD checklist.

Where the work comes from and how it pays

• Retailers and stores that deliver their own big and bulky sales and need trucks and crews.
• 3PLs and warehouses that run delivery programs for several retailers out of one building.
• Final-mile carriers that hold the retailer contract and hire owner-operators as subcontractors. This is the most common way in. Read who the carrier of record is, whose authority and insurance cover the freight, and what you're charged back for.
• Load boards and brokers for LTL final-mile, retail store deliveries and liftgate loads. New authorities often face broker age rules; see loads with a new MC.
• Direct shippers: local furniture and appliance stores that need a dependable truck. See how to find direct shippers.

How it pays. Final mile is usually paid one of three ways. Each changes what a good day looks like:

Ask for chargebacks in writing too: fees for late arrival, missed time windows, damage, customer complaints or app scans. They come out of your settlement. Run each offer through the profit calculator.

Damage, claims and cargo insurance

In final mile you touch every item by hand, often inside someone's home. Damage claims are the biggest money risk.

• Inspect at pickup. Count pieces, look for crushed or torn boxes, and note damage on the paperwork or app before you sign. If you sign clean, it's hard to prove the damage happened before you.
• Photos at both ends: the item in the truck, at the door and in place, plus the walls, floors and doorways before and after you carry it in.
• Signed delivery receipt: have the customer note any damage while you're there. A clean signature is your best defense.
• Cargo insurance: FMCSA sets no cargo insurance minimum for general freight. Its cargo liability amounts apply to household goods carriers. Most retailers, 3PLs and brokers still require cargo coverage, often at a set amount, so ask before you buy. Ask your agent whether the policy covers the items you handle, any exclusions for unattended trucks or install work, and whether damage to the customer's home falls under general liability instead.
• Read the contract: who pays for damage, how much, the deductible you carry, and how disputes work.

How claims work in federal law, including the Carmack Amendment and deadlines, is in cargo claims for carriers. Coverage types are in trucking insurance explained.

Your helper and worker classification

Two-person delivery means you need a reliable second person. How you set that up has tax and legal effects.

• Employee or contractor? For federal taxes, the IRS uses common law rules: does the business have the right to control what work is done and how? It looks at behavioral control, financial control and the relationship of the parties. A helper who rides on your truck, works your hours and follows your directions often looks like an employee. If you're unsure, IRS Form SS-8 asks the IRS to decide.
• Other tests apply too. The Department of Labor and your state use their own tests for wage, overtime and unemployment rules, and they can reach a different answer.
• Workers' compensation: lifting injuries are common in this work. Ask your state and your insurance agent what coverage you need for a helper.
• If the helper drives: anyone driving a truck of 10,001 lb or more in interstate commerce needs a DOT medical card and must meet the driver qualification rules. See the DQ file checklist.
• You may be the contractor too. If you work for a final-mile carrier, the same tests decide whether you're really an independent business. Keep your own authority, insurance and customers where you can.

This is general information, not legal or tax advice. Talk to a tax professional before you hire.

Filling the gaps with dispatch

Final-mile contracts can leave empty days, slow seasons or a truck that's free after the route. A dispatcher can find box truck and van loads for those gaps, check each broker's authority and payment history, and get the rate confirmation right. Fleetorica's box truck dispatch and cargo van dispatch are a percentage of the load's gross, and your first load is free. Fleetorica is a dispatch service, not a broker or a carrier. You keep your own authority and choose which loads to take.

Questions carriers ask