There is a significant difference between working under someone’s authority as an independent truck driver and having your own truck authority. What does that mean?
When you work as a truck owner-operator, you get paid by the government for hauling goods. And according to FMCSA, this authority varies depending on several factors, including the type of cargo you haul, the mode of commerce (interstate or intrastate), truck model, and others.
As fascinating as it sounds to be your own boss, getting truck operating authority takes work. You must go through several steps, with significant funds in your bank account, verification of your previous record, and other minute details.
With so much conflicting information available online, it can be difficult to find the correct one. Thus, to assist you in your truck owner-operator journey, we have compiled a comprehensive guide that covers everything from the steps you business entity, such as a sole proprietorship or a limited limust take to the total time required to the average cost.
So, continue reading to learn more.
How does the FMCSA authority operate?
The Federal Motor Carrier Safety Administration, or what we know as FMCSA, issues different operating authority numbers depending on the operation the company wants to run and the cargo it hauls. And these operating authorities are identified as follows in different scenarios:
- MC, or Motor Carrier Number
- FF, or Freight Forwarder Number
- MX, or Mexico Number
For instance, trucking companies that do operate in the following types of transportation for a fee or compensation (direct or indirect) require an MC number in addition to a DOT number:
- Interstate transport of passengers in commerce.
- Haul government-regulated goods owned by others or arrange for their transit of items.
Moreover, contrary to the USDOT number, a trucking company may require multiple operating authorities to sustain its business.
Types of Trucking Operating Authority
Choosing the right operating authority is crucial for your business as it will further affect the types of insurance required by the FMCSA. Below are the different types of interstate operating authorities for motor carriers as per the OP-1 filing system:
Motor Carrier of Property
Under this, for-hire carriers haul regulated property (household commodities are not included) for the public. This authority demands primary public liability coverage (bodily injury plus property damage). No cargo coverage is needed.
Motor Carrier of Household Goods:
Under this, carriers haul household commodities (any item that is used for personal purposes) for the public. HHG (household goods) carriers offer additional transportation services such as loading and unloading goods at the home or inventorying. This authority demands both primary public liability coverage (bodily injury plus property damage) and cargo coverage.
(Except for household goods): Under this, carriers haul property owned by others in exchange for payment, except for household goods. A broker does not bear any property damage during transportation.
(For household goods): Under this, carriers haul property owned by others in exchange for payment for household goods. A broker does not bear any property damage during transportation.
United States-based Enterprise Carrier of International Cargo
(Except for household items): A business with its headquarters in the US that carries international cargo (except home items) but is held or managed (to a greater extent than 55%) by a resident alien or native of Mexico. International freight must come from or be going to another country.
(For household goods): A business with its headquarters in the US that carries international household commodities but is held or managed (to a greater extent than 55%) by a resident alien or native of Mexico.
In addition to the aforementioned, there are more authorities, including Freight Forwarders, Non-North America-Domiciled Motor Carriers, and Mexican-based carriers (operating outside of commercial US zones across US-Mexico borders).
What is the cost of filing your own authority?
The federal department charges a filing commission for each authority, and it is non-refundable. So, pay attention to detail and avoid making mistakes.
Following are the filing fees of authority as per the action:
- $300.00 for Permanent Authority
- $14.00 for Notice of Name Change
- $80.00 for Reinstate Authority
How to apply for your own trucking authority?
Having your own trucking authority means you get paid by the government for every single transport. This gives you the potential to work for yourself and earn more. However, there are some mandatory steps to follow in order to get a trucking authority, which is as follows:
Register your trucking business
For first-time applicants who have never registered with FMCSA and do not carry a USDOT number, they must first register their trucking company with the URS (Unified Registration System). Here, you can choose your business entity, such as a sole proprietorship or a limited liability company. You also need to use logo maker for creating your own logo design. If you are interested in limited liability, then you will require to get the EIN (Employer Identification Number) that is issued by the IRS (Internal Revenue Service) administrators.
Once your registration is complete, FMCSA will publicly display information such as your registered name, address, and phone number as per state policy. So, if you receive a call from telemarketers or automated calls claiming to be from the FMCSA, don’t fall for it. Stay away from such calls, and if possible, report the number.
Get the USDOT Number
The US Department of Transportation, or USDOT, number serves as a unique identifier for trucking businesses in order to monitor their activities, especially in the event of auditing, safety compliance, or accident investigations.
All the companies involved in the following trucking operations must have a USDOT number:
- Transporting passengers via commercial trucks (interstate).
- Transporting cargo via commercial trucks (interstate).
- Transporting hazardous cargo via commercial trucks (intrastate). In such a case, an additional safety permit is required.
Every time you update your business’s information, your DOT number is renewed.
Furthermore, as you navigate the process of obtaining your own trucking authority, it’s essential to consider the increasing demand for skilled truck drivers in the industry, making this a timely opportunity for those looking to pursue a rewarding career on the road.
NITIC can help you get USDOT number. Contact us Today or Call 800-726-8376
Apply for the authority
As stated earlier, an MC (Motor Carrier) number is required for interstate and intrastate commerce. Applicants who have already obtained a USDOT number can now file for additional authority based on the relevance of their business operations.
This whole process goes online via the FMCSA legacy registration system, where you apply using a credit card/ check, and forms. To pace up the process, it is wise to send the credit card via US mail and email all the necessary information to the Federal Motor Carrier Safety Administration. The other way (via check) will delay your processing time by 6-8 weeks (not advisable).
BOC-3 Form: According to federal regulations in the United States, all transport companies that want to get their own operating authority must assign a designated process agent in every state. This agent will complete all the necessary paperwork on behalf of the carrier.
If you are a motor carrier, only the process agent can file the BOC-3 form. But for a freight forwarder or broker who does not work in commercial transportation, you can fill out the form on your own.
Once you are done with the BOC-3 filing and have properly mailed it electronically to the FMCSA, they will issue an MC number. However, it takes 3-4 business days to receive the operating authority documents. In this case, if it exceeds more than 10 days from the issued date, you may contact their helpline number 800-832-5660.
OP-1 Form: OP-1 form is not for first-time applicants. For them, the process is the same, i.e., through the URS. For those who are looking for additional authorities, the OP-series form is required.
MCS-150 Form: If you are looking to update your USDOT number, then you need to file the MCS-150 form. This is essential because it keeps the FMCSA authorities in sync with your company’s information in order to tally later in case of safety compliance, an accident, or accountability.
Get your UCR Permit
Unified Carrier Registration, or UCR, is a federal program that replaces the Single State Registration System (SSRS). As per UCR, every trucking company that is involved in interstate transportation has to pay an annual registration fee.
Following are the scenarios where a motor carrier, freight forwarder, broker, or truck leasing company needs to get the UCR permit:
- If transporting cargo weighh more than 10,000 pounds
- If transporting more than 10 passengers (including the truck driver).
- If hauling cargo involves hazardous materials.
- If the motor carriers are from Canada or Mexico and are transporting across interstate and international boundaries in the US.
Pay HVUT (Heavy Vehicle Use Tax)
Heavy Highway Vehicle Use Tax return or form 2290 is mandatory to file if the registered motor vehicle in your name under State/ Mexican/ Canadian carries weight equal to or exceeds more than 55,000 pounds. The taxation period is between July 31- June 30 every year.
Register for IRP (International Registration Plan)
The International Registration Plan or IRP is an agreement that is required for a trucking company that is involved in transportation between interstates, Washington, and Canada. The perk of IRP is that it gives each registered motor carrier a plate and a cab card that are valid across these borders at certain weights. Additionally, you can renew your plate at any time and manage certain transaction types, including adding trucks or states and transferring plates.
To get an IRP, you need to register all your commercial trucks, including their model number, purchase cost, and date. After the payment processing, you will get the tags.
Setup an IFTA account
After registering for an IRP account, you can further apply for an IFTA (International Fuel Tax Agreement) license, which is an agreement between the 48 states of the US and the 10 provinces of Canada.
Earlier, truck drivers needed to get a separate fuel permit for a particular location, which actually used to bury them in lots of paperwork reporting every single detail from location to filing. However, all of this can be avoided by obtaining a single fuel permit and opening an IFTA account. With an IFTA return, you just need to submit one fuel return to your base authority quarterly.
Apply for drug and alcohol test
And finally, FMCSA and USDOT require all trucking companies to pass a drug test before they hire drivers or drive themselves. So, make sure your drivers have a clean past driving record, have logged considerable driving hours, and have no accidental records. There is a whole list of rules and regulations mentioned on the FMCSA website regarding drug tests.
How do you check your application status?
To check your motor carrier status, follow the following steps:
- Visit the SAFER website.
- tab on the “Licensing and Insurance” section under the FMCSA search.
- Enter your USDOT number and MC number and click “search.”
- Scroll down and check your operating authority’s history.
Who does not require operating authority?
Running a trucking business under your own operating authority is a liability in itself. While transporting cargo across interstate or international borders, there is a certain level of financial risk associated with it, making an adequate level of insurance required. However, there are scenarios where a motor carrier does not require an operating authority, and these are the following:
- Private carriers that haul their own cargo.
- For-hire carriers that don’t haul federally regulated goods.
- Motor carriers operating within a federally designated commercial zone are not subject to interstate rules and regulations.