Make the Switch to Being Your Own Boss
Getting your trucking authority to start your own trucking business can be downright intimidating. With so much conflicting information available on the internet, it’s hard to keep track of all the steps you need to follow. Getting your own authority requires startup cash, attention to detail, and a “get it done” commitment.
If you’re having trouble knowing where to start, we’ve assembled the most frequently asked questions about how to get your trucking authority.
What does it mean to have your own trucking authority?
Having your own operating authority means you have the government’s permission to get paid for hauling freight as your own trucking company. The Federal Motor Carrier Safety Administration (FMCSA) issues your operating authority in the form of a Motor Carrier (MC) number.
There are different types of motor carrier operating authority depending on what kind of cargo you’re hauling, and some carriers will need multiple authorities to cover multiple types of cargo. Some states require Intrastate Authority if you’re moving loads within their borders. Make sure you apply for the operating authority or authorities relevant to your business, and don’t delay — the entire process can take upwards of two months.
Which carriers don’t need authority?
Several motor carrier categories do not need an operating authority, including:
- Private carriers that haul their own freight.
- “For hire” carriers that exclusively haul cargo that is not federally regulated.
- A trucking company operating exclusively within federally-designated commercial zones that are exempt from interstate authority rules.
How much does it cost to get your own authority?
A single federal authority will cost you $300, but you may need several of them, if you’ll be hauling a variety of cargo. Your operating authority costs will be even higher if you’ll be traveling through states that require state-level authorities. If the FMCSA has revoked your authority, you’ll pay $80 to request reinstatement of your active authority.
With various licensing costs and insurance, your total startup expenses could be upwards of $10,000.
What are the benefits of having my trucking authority?
Once you’ve been working as a trucker, company driver, or owner-operator for a while, it’s natural to want to move on to having your own authority. It’s a huge career growth opportunity, gives you complete independence, and can come with a pretty significant bump in pay if you’re running your business correctly.
There is a lot more work and responsibility involved, but it means you can hire your own drivers for your trucking business. Over time, you could have multiple trucks and drivers. It also means you’ll be responsible for finding and negotiating loads.
Where do I start?
- Decide on a name for your business. If required, file your business with your state. Typically, this is done through the secretary of state’s office, but check your state’s official website to be sure. FYI: Some states require you to file your business under an assumed name or DBA (doing business as). Check your state’s official website to be sure.
- Decide on a business structure. Talk to an accountant to determine how you’re going to organize your own trucking business to maximize your financial and operational success. Research limited liability companies (LLCs), C corporations, S corporations, partnerships, and sole proprietorships to make the right decision for your business.
- Get an EIN. Visit the IRS website for an Employer Identification Number (EIN) which you’ll need for tax purposes.
- Get preapproved for primary liability and cargo insurance. If you wait until the end of the process to learn that you aren’t approved for insurance, you’ll have spent a lot of time and resources unnecessarily — don’t skip this step!
What are the steps to getting my trucking authority?
If you’ve completed everything under the “Where do I start?” question above, then you can get started completing the list of items below. Fees can vary depending on the state you live in. Visit your state’s department of transportation/motor carrier website for more information.
1. Apply for your authority.
Complete the OP-1 or OP-1(P) form, the BOC-3 form, and pay the application fee. You’ll need the truck information (VIN, year, weight, etc.), a tax ID number, incorporation details, and license plate information (if you have it).
Once you complete the Motor Carrier Identification Report (MCS-150) and Safety Certification Application, you’ll receive your USDOT Number which you need for a vehicle used in interstate commerce to move freight.
There is a mandatory 10-business day dispute period after your application is posted to the Federal Register, in which anyone can protest your authority. Once it ends, you’ll need to post proof of insurance and your BOC-3 form, which assigns a process agent — or a business in any state in which you operate — to receive and forward legal documents on your behalf.
The FMCSA will review your authority. You’ll receive a letter from them when it’s approved, at which point you’ll start working on the remainder of this list.
2. Secure your UCR permit.
Use your USDOT and MC numbers to apply for the Unified Carrier Registration (UCR) system. UCR verifies active insurance coverage in the states where you operate. Apply for your permit and learn more about the UCR system.
3. Pay your HVUT.
The Heavy Vehicle Use Tax is an annual tax assessed on all heavy vehicles operating on public highways. Research Form 2290, and when you’re ready, download the OOIDA worksheet. Complete this form before moving on to the next step.
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4. Register for an IRP.
If you’ll be carrying freight across state lines or into Canada, you’ll need to register for The International Registration Plan (IRP). This plan is an agreement between the 48 contiguous states, the District of Columbia, and Canada that assesses licensing fees based upon the distance operated in each jurisdiction. The IRP website can help you complete this process.
5. Set up an IFTA account.
Once you have an IRP account, you can apply for your International Fuel Tax Agreement (IFTA) account and license. IFTA is an agreement between the 48 contiguous states and Canada that simplifies fuel tax collection. It ensures each jurisdiction gets a share of fuel tax to support roads and transportation.
With an IFTA license, you just have to submit one fuel tax return every quarter to your base jurisdiction. Learn about IFTA, including how to contact your base jurisdiction to set up your account. There are some circumstances that will require extra permits. Kentucky, New Mexico, and New York require weight distance permits to operate, and Oregon requires a permit and a bond. You’ll need the Standard Carrier Alpha Code (SCAC) if you’re moving military, government, international, or intermodal loads.
6. Enroll in a drug and alcohol testing program.
The FMCSA and DOT require all motor carriers to have a negative drug test prior to hiring drivers or driving themselves. Learn more about the rules and regulations related to drug and alcohol testing on the FMCSA website.
All supervisors of commercial drivers are required to complete two hours of controlled-substance training, and a designated employee representative (DER) must be named who is authorized to immediately remove employees from duty if they cannot pass a drug or alcohol test.
After you complete these steps, you’ll be enrolled in the New Entrant Safety Assurance Program.
Within your first 18 months of doing business, you will have a mandatory “New Entrant” audit to ensure you’re compliant with federal trucking regulations. To make sure you are, start keeping good records now. Learn more about the New Entrant Safety Assurance Program on the FMCSA website.
Make sure you maintain:
- Driver qualification files/employee records
- Driver logs
- Safety records
- Hours of Service (HOS) records
- Accident reporting
- Maintenance records
- All drug and alcohol testing program records and reports
Can I check my application status?
To check the status of your application and whether your operating authority has been issued, you need to go to the SAFER website. Under FMCSA searches, choose Licensing & Insurance, enter your USDOT or MC number, and click search. When you scroll to the bottom and click on Authority History, you can see the date your operating authority was granted.
How do I find customers?
You need to know where your freight is coming from so you have something to move. Get familiar with load boards if you don’t have customers lined up, and start building relationships with quality freight brokers that you can work with in the future. Learn about services offered through the Truckstop Load Board.
Owner-operators should have at least 60 days of extra cash set aside to cover operating costs (fuel, repairs, etc.). If you’ve been an owner-operator for a while, you know it can take 30-45 days for an invoice to get paid. Be prepared by having operating cash on hand while you build up your business.
Get your trucking authority.
Truckstop can help you get your operating authority, making the process so much easier than going it alone. Our authority packages include two months free of the Truckstop Load Board to help get you started. Contact us to learn more.