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Individuals looking to switch careers may choose to start their own trucking company. To do so, they need an active operating authority, as the Federal Motor Carrier Safety Administration requires. Different types of authorities are needed, depending on the cargo being hauled. Getting this authority allows the person to work as an owner-operator. What does a person need to know about this process?
The Time Needed to Get Trucking Authority
Securing trucking authority requires state and federal approval and can take at least five weeks. If the FMCSA requires further review, the process may take eight weeks or longer. Those with authority who wish to renew it will find the process takes approximately six to nine weeks. This authority allows them to make use of a carrier portal.
The Cost of Obtaining Trucking Authority
Expect to pay a flat fee for the paperwork associated with securing truck authority. This fee covers the cost of filing for Motor Carrier (MC) and Department of Transportation (DOT) numbers. Those who reinstate their authority or make name changes on the paperwork are charged a reduced fee.
The Steps in Securing Authority
Determine which type of authority is needed and whether multiple authorities will be required. Select a business name and follow all state rules and regulations. Choose a business structure and secure an EIN. Have the appropriate insurance in place before moving any cargo.
Authority is nothing more than permission from the government to get paid for hauling freight as an independent contractor. This authority comes as an MC number. The trucking company must register in its home state and request a USDOT number to get this number.
Every trucking company must be registered with the United States Department of Transportation. This DOT number serves as a company ID. When freight brokers or shippers request information using the number, they will see all company information, including the types of trucks used and the cargo the carrier hauls. In addition, the broker or shipper can see safety and compliance information. A carrier must renew its USDOT number every two years or when company information changes.
The MC number is needed for interstate commerce. The agency provides this number immediately, but steps must be taken before it becomes active. A BOC-3 form has to be completed within 20 days, and the carrier must purchase insurance. Proof of this insurance must be provided before the MC authority becomes active. Upon providing this proof, the MC authority becomes active within a few weeks, although the authority certificate takes longer to arrive. Without the BOC-3 and insurance, a carrier cannot legally operate its vehicles.
Carriers in multiple jurisdictions must pay a Heavy Vehicle Use Tax and register an International Registration Plan. Before registering, gather the truck’s VIN and title information and the make and model. The carrier must also share the purchase date and price on these documents and a list of states it plans to haul in. When this plan has been submitted, the government will provide apportioned tags.
Next, the carrier must establish an International Fuel Tax Agreement (IFTA) account and complete a quarterly fuel tax report. This form simplifies the process of reporting fuel use taxes across multiple jurisdictions. A Unified Carrier Registration permit is also needed to provide proof of active insurance when the carrier operates across various states.
The final step is to register with a drug and alcohol testing center. All carriers must have negative drug screens before operating a truck. This is for their safety and the safety of others on the road.
All carriers must comply with these regulations. Plan to complete these steps well in advance of starting the business. Doing so ensures delays won’t be a significant setback on this path to a new career.