Table of Contents
What Is Trucking Authority?
Suppose you want to transport goods throughout the United States. In that lawsuit, you will likely need trucking authority, a granted license by the Federal Motor Carriers Safety Administration ( FMCSA ) to transport cargo throughout the United States. While there are some exemptions, you will likely need trucking authority if you want to run a big freight company or employ other drivers to provide interstate services .
There are different types of authorities for assorted purposes. For exercise, freight forwarders require different assurance than motor carriers. While obtaining trucking authority can be a headache for novice and veteran business owners alike, it gives you the opportunity to make more money .
What is operating authority?
If you work in the hauling diligence, you have probably heard the term “ operating authority ” or “ centrifugal carrier wave authority ”. These terms are interchangeable with trucking agency .
What Is an MC Number?
A Motor Carrier Number ( MC Number ) is a number that motor carriers receive from the FMCSA upon the accord of trucking authority. This number is proof that you have permission to transport goods, as outlined by your particular authority .
What is a DOT number?
Another significant regulative number you need if you want to run a hauling business is a USDOT Number. This number is regulated by the United States Department of Transportation ( USDOT ). This tracking count helps freight forwarders and regulators understand more about your business. It will monitor your safety records, fomite classifications, and early core details .
What Are the Different Types of Authority?
unfortunately, there are many types of authority that you must understand before you begin the application process. There are three chief types of authority : motor carriers, freight forwarders, and brokers .
Let ’ s explore these authorities in more detail below :
A motor carrier is a business that transports goods like cargo, food, cars, etc. This can besides refer to a business that transports passengers. You must have MC authority to provide versatile types of cargo services .
A freight forward is a transportation-related business that helps organize freight for shipping. This may involve combining assorted cargo loads for dispatch, transporting cargo from a pickup period to a place of cargo, or providing multiple early shipping-related services. In many cases, a centrifugal carrier will be a subcontractor of a freight advancing .
A agent is an individual or business that negotiates with drive carriers to transport goods. A broke is not the party creditworthy for the transportation of the cargo .
Contract vs. common carriers
Another critical divisor to understand before you begin operating is the dispute between common carriers and contract carriers .
shrink carriers must have a contract with the businesses they work with. On the other pass, park carriers can transport cargo for anyone that is will to pay them angstrom long as it complies with union regulations. coarse carriers can work with the general populace, while compress carriers will need sterilize contractors with specific entities. .
While both of these carriers will need indebtedness policy to operate legally, common carriers will besides need cargo indemnity to comply with regulations .
Benefits of Having Your Own Trucking Authority
In many cases, individuals or businesses applying for trucking authority have previous feel in the hauling diligence. There are many benefits associated with having your own truck assurance. Let ’ s explore the elementary advantages below :
- Autonomy: It will give you the power to choose your own loads, hire your own drivers, and more.
- Interstate Travel: Trucking authority allows you to operate through multiple states.
- Profit: Having trucking authority allows you to expand your revenue streams and keep more of your income.
- Flexibility: You can choose which jobs to take or refuse and have more control over the routes you take.
While there ’ s no doubt about the many upsides associated with applying for your authority, you must remember that it requires more province. Running a truck company can be difficult, and you must be prepared to seek your own workplace, hire employees, and follow federal and local guidelines .
How to Get Trucking Authority in 10 Steps
immediately that you understand the differences between authorities, it ’ second clock to start the application work. Take a look below for ten-spot simpleton steps you need to take to obtain authority :
Step 1: Register your trucking company
Before you can apply for an MC phone number, you need to register your caller, and each state has its own registration requirements and costs. You should besides determine if you want to start a sole proprietorship, LLC, or any other type of business structure .
Step 2: Get your Employer Identification Number (EIN)
immediately it ’ south clock to obtain an employer designation number ( EIN ). This is an identification act provided to business entities by the Internal Revenue Service ( IRS ) .
Keep in heed, that you will not need an EIN if you decide to start a sole proprietorship. however, you can still apply for one if you don ’ triiodothyronine want to conduct business under your sociable security system number ( SSN ) .
Step 3: Register your business with the Department of Transportation (USDOT)
future, it ’ randomness time to apply for a DOT Number from the US Department of Transportation. This will help the USDOT, freight forwarders, and early entities find information on your vehicles, safety record, and more .
unfortunately, you will need to renew this number every two years to maintain DOT authority. besides, if you change your business name or any other core details, this will require update.
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Step 4: Apply for your motor carrier (MC) number
now, it ’ sulfur fourth dimension to apply for your MC act. You must have this to provide a wide stove of cargo services, including being involved in any type of interstate trade wind. You can file for this number on the FMCSA web site .
Step 5: Get trucking authority insurance and file for a BOC-3
once you apply for your MC phone number with FMCSA, you need to file a BOC-3 and obtain an indemnity policy. This must be completed within 20 days of applying for your MC Number .
If you don ’ metric ton apply for a BOC-3 or obtain a relevant insurance policy, you won ’ thyroxine gain your authority .
Step 6: Pay the Heavy Vehicle Use Tax (HVUT)
once your indemnity and BOC-3 are in place, you need to pay your Heavy Vehicle Use Tax ( HVUT ). HVUT is a tax account payable by dense vehicles using USA highways, and this is another price associated with running a hauling company with centrifugal aircraft carrier authority .
Step 7: Set up your IRP (International Registration Plan)
If you plan on running a truck company that operates throughout multiple jurisdictions, you need to register at IRP. It will require the come details :
- Title Information
- Purchase Cost
- Purchase Date
- States You’re Planning to Operate Within
Step 8: Set up an International Fuel Tax Agreement (IFTA) account
now, it ’ s time to set up an IFTA account. This allows you to report your fuel manipulation taxes within the 48 mainland USA states and versatile canadian provinces, and you must report these at the end of every fiscal quarter .
This reputation will include the count of miles drive in each jurisdiction and details regarding all fuel purchases .
Step 9: Complete your UCR (Unified Carrier Registration)
following, obtain a UCR license. This will verify that you have the right insurance policies in the states that you ’ ra trade in. You will need to register in each state that you operate in. This will come with a tip, which is subject on the size of your current fleet .
You will need to re-apply for this each class .
Step 10: Enroll in a drug and alcohol testing program
finally, you need to register with a drug and alcohol testing program. Your truck drivers must be able to pass negative drug screens for federal regulations. Drivers must be registered with a drug and alcohol testing adeptness .
MC and DOT Number Costs
The monetary value of an MC and DOT numeral is relatively low-cost, given the opportunities these licenses can afford your clientele. Let ’ s look at the FMCSA fees for assurance below :
- Permanent Authority: $300
- Notice of Name Change: $14
- Reinstate Authority: $80
You do not need to pay a freestanding fee for a USDOT number .
Trucking Authority & MC Number FAQs
We receive many questions about trucking authority and MC numbers. Let ’ s take a look at some of the most popular questions and their answers below :
How much does it cost to get your own authority?
Obtaining agency typically costs $ 300, which is account payable to the FMCSA. There are besides other costs, such as insurance, which you will need to factor in which will depend on the character of business you ’ rhenium ladder and the type of authority you need to obtain .
How long does it take to get a DOT number?
In many cases, you can obtain a DOT in under an hour. however, this does not provide you with agency. It takes weeks to receive your MC Number .
What is the difference between a DOT and an MC Number?
A DOT Number is primarily a track number ( or ID number ) that hosts core details about your business, its fleet, and your safety record. This is regulated by the US Department of Transportation ( USDOT ) .
On the other hand, an MC Number provides you with the authority to conduct commercial enterprise. An MC Number is needed for companies that are operating across state borders .
Is trucking authority hard to maintain?
a long as you comply with local and federal regulations, you should not have issues maintaining your engage authority .
Can I check the status of my application?
You can check the status of your application on the FMCSA web site. however, you should receive a letter within a few days of your authority being granted .
Which types of carriers don’t need trucking authority?
many trucking companies that lone operate in a single express do not need authority. however, there are three other types of trucks that don ’ t need authority :
- Carriers that only transport cargo for themselves, also known as private carriers.
- A carrier that transports commodities that don’t have federal restrictions.
- Carriers that work within specific “commercial zones” that don’t have restrictions. This might occur when a city or region crosses multiple state boundaries.
Can I get a DOT number without insurance?
While you can apply for a DOT numeral without indemnity, you won ’ thyroxine be able to operate with assurance until the FMCSA sees proof of your BOC-3 and insurance policy .
Can I get my own authority and DOT number without a truck?
While you can apply for assurance and a DOT numeral without a truck, you won ’ deoxythymidine monophosphate be able to gain authority until you have a truck. This is because you need the right policy policies before your authority become active, and you need a truck to obtain an insurance policy .
Final Thoughts on Getting Your Trucking Authority and MC Number
now that you understand how to obtain truck authority, MC numbers, and early licenses that you need to start a truck business, it ’ mho time to decide if it ’ s the discipline path for you. While obtaining operating authority can help you scale your business, it does come with add costs. Make sure you ’ re cook with commercial hand truck financing to get you started today .