Last Updated on October 31, 2023
Let’s face it — getting trucking authority isn’t a walk in the park. There is a plethora of information you’ll find online that can make it hard to keep track of all the required steps.
Having your trucking authority means you cut the third player or middleman, thus opening doors for more significant profit. But how do you obtain a trucking authority? Are there requirements you should know before getting one?
Read on for a detailed insight into everything you need to know in order to get your trucking authority. The step-by-step checklist for getting an operating authority will also help make understanding the process easier.
What Is Trucking Authority?
Trucking Authority, also known as Motor Carrier Authority or Operating Authority grants truckers legal permission to operate commercial vehicles and transport goods from one place to another for profit.
The government agency that regulates the trucking industry is Federal Motor Carrier Safety Administration (FMCSA). The FMCSA grants operating authority by issuing United States Department of Transportation (USDOT) and Motor Carrier (MC) numbers. These are unique numbers designed to help FMCSA conduct inspections, identify your trucking company, monitor your safety scores, and allow you to transport goods to certain destinations.
Owner-Operator With Authority vs. Without Authority
When you haul loads under your own authority, you are your own boss. As an owner-operator with authority, you are responsible for finding loads, controlling your work schedule, and following all relevant regulations.
Operating under your own authority means you must be fully independent and have a particularly strong grasp of your responsibilities as a trucking business owner.
Conversely, working as an owner-operator without authority means you have a boss who finds loads for you to haul and controls your schedule. Essentially, you’re a contractor, because you can only legally work under a different carrier’s authority.
Related: How to Become an Owner-Operator
Types of Authority
There are two particularly common types of trucking authority. You can either apply for a standard or contract license. They are quite different and will depend on who you want to provide the transportation to and the type of cargo.
- Common authority: This type is allowed to offer transportation to anyone wishing to have their goods transported with or without a formal contract or in exchange for payment.
- Contact authority: This type only allows drivers to haul freights for shippers with whom they have signed a contract with.
Note that both types are required to have liability and cargo insurance.
Other types of authority for motor carriers include Passenger Carrier, Motor Carrier of Property, and Motor Carrier of Household Goods.
Who Needs It and Who Does Not?
Whether you are an existing truck owner leasing through a carrier or thinking of starting a trucking company, it’s recommended that you obtain trucking authority. It will prevent you from getting on the wrong side of the law, provide you with the required insurance, and open up more opportunities to make profit.
Besides, obtaining authority isn’t as daunting as it seems. If you follow the steps efficiently and accurately, it could only take a few days.
Having your trucking authority will provide many benefits, so let’s take a look!
Benefits Of Having Trucking Authority
What are the benefits of hauling loads under your own authority? Here are some reasons why truckers get operating authority:
Choose Your Loads and Routes
As a trucker with authority, you can choose whichever loads and routes appeal to you, whether you prefer short loops between a couple of cities or long cross-country hauls.
Control Your Work Hours
While you still must obey Hours of Service Regulations, you’ll otherwise be able to fully control your schedule, whether you want to drive the maximum number of hours or take short hauls and spend lots of time at home.
Moreover, you do not have to request your boss for time off because you are your own boss. As long as you can make enough money to live on, you can take as many days off as you want.
Negotiate Your Rates
When working under a carrier, your boss negotiates hauling rates on your behalf. However, truckers with authority must negotiate their own rates. If you are confident in your negotiation skills, you can make the most out of every haul.
Improve Your Income Potential
Owner-operators with authority are their own bosses, meaning they get 100% of profits – no cuts. While your expenses will be higher because you’re running your own business, you still have far more earning potential than truckers working for a carrier or company drivers.
All the Perks of Running Your Own Business
Some people get trucking authority to have others drive heavy vehicles for them. As a trucking authority holder, you can start your own for-hire motor carrier and hire drivers to haul loads on your behalf. Regardless of how you choose to run your trucking business, with authority, you’ll have the peace of mind that you’re in complete control.
Requirements Before Getting Your Own Trucking Authority
So, where do you start? There are several documents or things you need to do before getting your trucking authority certificate. Here is a highlight of some of these requirements.
Register Your Business
Whether you are looking to hire employees to run the company or run it yourself, having a registered business is fundamental. Choose a business structure that will suit your business perfectly and have it registered with the appropriate state or county.
Get A DOT Number
Since you are essentially starting a new trucking company, you need a USDOT number. This identification number helps the department store relevant information regarding your company, like your commercial motor vehicles, cargo hauls, and maintenance records.
Shippers and freight brokers can access USDOT numbers to check your legitimacy. Having one is essential to show that you run a legitimate trucking business.
How To Get DOT Number
You can get a DOT number by completing an application form provided by the Department of Transportation. Follow the registration process to complete your DOT number application.
Cost Of DOT Number
A DOT number is free, but you cannot run a trucking business with it alone. To get trucking authority, you must pay a registration fee for your motor carrier number.
Get a Motor Carrier Number
You need to apply for a motor carrier (MC) number with the Federal Motor Carrier Safety Administration to complete your application. Use the information you gathered for the USDOT number registration to apply for your motor carrier number with the FMCSA. You will have 20 days to complete two more steps before you can be given your trucking authority.
How To Get an MC Number
If you do not already have a DOT number, you can apply for one alongside your MC number application through the Unified Registration wizard. If you already own a USDOT number, use the Registration Options page instead.
Cost Of MC Number
You must pay a one-time fee of $300 for each operational class you’re registering in when obtaining an MC number. Depending on your type of operation, you may need to apply for multiple types of motor carrier authorities.
If your trucking authority has been revoked, you must pay $80 to reinstate your active authority.
Apply for Insurance
The FMCSA’s Insurance Filing Requirements page is a great resource, as all carriers are required to have a minimum primary liability. When you’re getting insurance as a common carrier or contract carrier, remember that you will be required to obtain cargo insurance in addition to liability.
Other things you will need include an IFTA account, Employer Identification Number (EIN), BOC-3, and simple permits such as weight and distance permits.
Don't let customers stall your cash flow
The No. 1 cause of cash flow issues for businesses is not getting paid on time. Your business's growth doesn't have to be hindered by late payments
Step-By-Step Checklist for Getting Trucking Authority
After getting all the above requirements, the next step would be getting your trucking authority. Although you can visit your state’s department of transportation website to get the required procedure, here is a step-by-step guide on how to go about getting your trucking authority.
1. Register Your Trucking Business
Before applying for authority, you must have already registered your business in the state where you’ll be headquartered, which includes choosing an entity, such as a sole proprietorship or LLC. Part of this might include obtaining an EIN (Employer Identification Number), which is required if you choose the route of an LLC.
You may have already completed this step, but it’s required before moving onto the nitty gritty of getting your authority.
2. Get Your USDOT Number
Before applying for your authority, you must register with the U.S. Department of Transportation (USDOT), who will create a DOT Number for you, which will be your company’s ID. For the USDOT’s sake, this will provide them easy access to all of your company information. More importantly, it will be readily available to shippers and brokers so they recognize your company and can contact you when you’re hauling their loads. This number is renewed every two years.
3. Apply for Your MC Number
An MC Number allows you to legally partake in interstate transactions. To apply, you’ll once again go through the FMCSA, who will pass along your number. Note that this will remain inactive until you complete a BOC-3 Form and obtain an insurance policy.
4. Complete the BOC-3 Form
After you file your MC form, you’ll have 20 days to complete the BOC-3 form and pay the required application fee.
A BOC-3 form is a federal filing before being assigned a process agent who will accept legal documents on behalf of logistics businesses in the respective state(s) you’ll be doing business in.
After completing this form, you’ll then fill out the safety certificate application and Motor Carrier Identification Report (MCS-150).
5. Obtain an Insurance Policy
Owning a trucking business is an extensive undertaking, especially as it pertains to potential accidents and repairs to your vehicle or others. Therefore, obtaining insurance is required to activate your trucking authority (specifically, your MC number).
6. Pay Your HVUT
This annual tax is assessed on all heavy commercial vehicles. Ensure you pay the required fee and fill in the OOIDA worksheet from form 2290, which is needed in registering your IRP. Note that if your truck weighs more than 55,000 pounds, you are required to file an HVUT return with the IRS each year.
What’s more, you should note that there are states that will require you to pay additional weight distance taxes to haul or work with them. Ensure you conduct background research before visiting your desired state.
7. Register and Agree to the IRP
You will need to sign an agreement between all the states in the U.S. and Canada that provides payment of licensing fees. It also means that you will be licensed or allowed to transport goods from one state to another.
Check out the IRP website to help you complete the process quickly. You can also get in touch with their customer service to help you make the application.
8. Get an IFTA Account
Setting up an International Fuel Tax Agreement (IFTA) account is quite easy. All you need to do is follow the same procedure as getting your IRP. It is also an agreement between the 48 contiguous states that ensures each state gets a share of the revenue for road maintenance.
However, with IFTA, you are only required to submit one fuel tax return after covering a quarter of the distance to your base jurisdiction.
Also, note that there are states such as New York that will require extra permits. For this reason, it is imperative to ensure you have all the details before starting the truck.
9. Get a UCR Permit
10. Pass a Drug and Alcohol Test
Enroll in a drug and alcohol testing program or complete the two hour-long controlled substance training if you are a supervisor of commercial drivers. DOT and FMCSA require all motor carriers to have a negative drug test before using commercial roads.
11. Comply with Federal Regulations
Congratulations! After completing all the above steps, you will be ready to hit the road and reap more profits. All you need to do is comply with federal regulations. A mandatory “New Entrant” audit will be conducted after your first 18 months of doing business.
As a result, ensure you keep the best record to avoid ruining your trucking authority. You can get better results if you keep safety records, employee records, accident reporting, hours of service records, and any other necessary file that will ensure your business is running in its top-notch condition.
How Long Does It Take to Get a Trucking Authority?
The whole process will take at least 10-25 business days. However, if your application will need further review, you can expect an additional eight weeks to get your trucking authority. Besides the fact that the process might appear straightforward, it can be a daunting process, especially for small businesses.
It would be best if you also consider that there might be several upfront fees to be made before you can get your trucking authority. For instance, the FMCSA charge for filing the paperwork is $300, and it will include your DOT and MC numbers. You will also be required to part with an additional $80 if you want to reinstate authority.
Apart from that, there will also be a substantial number of requirements and regulations that should be followed.
Is It Worth Getting Your Own Trucking Authority?
Getting your own trucking authority is worth it if you plan to work as an independent trucker or start a private carrier. However, if you are content as a company driver, you will get little mileage from a trucking authority.
Trucking Authority Packages
If you are sure that you want to get your own trucking authority but are intimidated by the process, you can opt to purchase a trucking authority package. Third party companies sell different types of trucking authority packages that make getting your authority much less stressful, but it comes at a higher cost. Be sure to research different packages before making a final decision as companies will offer various prices, filings, and quality of service.
It does not matter if you are an experienced or a rookie truck driver; if you need a trucking authority, it is pretty easy to apply for one, you just need to closely follow the above steps and have everything required to register your company. There is no doubt that you will experience exceptional results as a result of doing so.