How Much Does it Cost To Get Operating Authority? - Strong Tie Insurance Services

How Much Does it Cost To Get Operating Authority?

Strong Tie Insurance September 27, 2021 Our Blog

With increasing globalization and the growing popularity of online shopping, hauling freight has never been more in demand than in 2021. As people rely more heavily on shipment, the trucking industry remains an important spot in the US Economy. The more reason a trucking business should get semi truck insurance.

Knowing this, a lot of truck drivers and aspiring truck business owners are looking to acquire their own operating authorities so they can start their own trucking businesses and cash in on the large trucking industry.

But getting an operating authority is not as easy as it sounds. There are several steps to undergo and a bunch of requirements to submit. Not only is this time-consuming, but you’ll even be asked to shell out money to pay for your trucking insurance and other requirements, on top of your operating authority itself.

What is an Operating Authority?

An operating authority, also known as trucking authority, is a permit granted by the Federal Motor Carrier Safety Administration (FMCSA) to a trucking business so they can operate a commercial vehicle and use it to transport federally regulated commodities.

An operating authority is a major requirement for any trucking business. It allows you to operate interstate and it also comes with a record at the US Department of Transportation (USDOT) and the FMCSA so they can collect data and monitor you as you operate your trucking business.

How Do You Get an Operating Authority?

To get yourself an Operating Authority, you will need to follow the steps below.

  1. Establish a business plan.
  2. Apply for an Employer Identification Number (EIN) through the International Revenue Service (IRS) website.
  3. Register with the US Department of Trade (USDOT) and get a USDOT Number and PIN.
  4. Register with FMCSA to get a Motor Carrier (MC) Number.
  5. File your BOC-3 (Designation of Agents for Service of Process).
  6. Secure trucking insurance and have your insurance provider send you your coverages to FMCSA.
  7. Register for International Registration Plan (IRP).
  8. Register for International Fuel Tax Agreement (IFTA)

How Much Does an Operating Authority Cost?

When applying for operating authority, the FMCSA will ask for you to pay a one-time, non-refundable fee of $300.

But aside from this amount, you should set aside a lot more money. Though an EIN and a USDOT number won’t cost you an amount,  the other requirements you have to submit do.

Filing your BOC-3 costs around $20-$40, it can be more if you hire a process agent to do it for you.

Meanwhile, truck insurance costs vary based on your type of operating authority, find out the trucking insurance requirements for your operating authority and talk to a trusted insurance provider. But expect to spend approximately $700 a month at a minimum. In addition, registration for IRP and IFTA also cost money.

These additional expenses aside, you should also consider your operational expenses in the business while you’re processing your operating authority. It can take about two to three months in total to get all your requirements in order so you can be allowed to operate.

Though the MC number will be issued to you within 24 hours of your registration, you have to prepare a lot prior to that. Following all the steps outlined in the section above takes months.

Establishing a business plan and getting your EIN can take up to ten days. Only with this can you proceed to register for a USDOT number, which takes four to six weeks to process. Only after you have your USDOT number can you register for an MC number with FMCSA. 

Ten-Day Protest Period and Processing Time

And though you will receive your MC number pretty quickly, you still can’t operate your trucking business. You have to wait out a ten-day protest period, after which, you have to file your BOC-3 and secure your trucking insurance based on the operating authority you applied for.

The BOC-3 is usually filed within 72 hours of your submission, but you should also account for the processing time if you’re going through a process agent or shipping time if you are sending the file yourself to FMCSA.

For insurance, you can find one that fits your budget. It should not take longer than a day for you to get the insurance you need. Then, immediately have your insurance provider send your coverage information to FMCSA so they can activate your operating authority.

After that, you have to spend three to five days registering for IFTA and seven to 14 business days for your IRP registration.

If you’re ready to get your operating authority, it’s absolutely important to consider the time it would take to process all your requirements for operating authority and the costs for the requirements themselves.

Though they don’t look too time-consuming individually, you should expect to be set back a few thousand dollars, all while your trucking business is not operational.

Obtain Truck Insurance Within Your Budget

Amongst the expenses listed above, the expense that would really set you back financially is your trucking insurance. Depending on the operating authority you apply for, you could be required to have two types of trucking insurance, primary liability insurance, and cargo insurance.

In some cases, like a motor carrier for property types of operating authorities, you are not required to have cargo insurance. However, it is advantageous to have one as it influences the amount of freight you will be allowed to haul.

But if you are on a tight budget, then the priority is to get your operating authority so you can begin operations as soon as possible. In such cases, you can get a semi trucking authority that allows you to comply with FMCSA requirements.

A semi trucking insurance covers injuries or physical damages to a property due to your or the driver’s negligence. Though it is not the most comprehensive type of insurance available, it does get you on the road faster, so you can earn back all the money spent while obtaining your operating authority.

If you’re interested in getting semi truck insurance, reach out to Strong Tie Insurance! We have over 20 years of experience protecting truck clients with commercial truck insurance, we know how to give you what you need so you can drive safely without worries.

To get a quote, contact our team at Strong Tie Insurance today.