Get Started on Acquiring Your Own Trucking Authority California

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Getting your commercial trucking authority can be an intimidating process. With so much competing information available at your fingertips, it’s hard to keep track of all the steps you need to obtain operating authority trucking. Getting your own authority trucking also requires start-up cash and commitment. If you’re having trouble knowing where to start to get your trucking authority, we’ve put together a brief summary of the most frequently discussed topics to help expedite the registration process. Continue reading below to learn more about getting your commercial trucking authority and how Strong Tie Insurance can help get you the best trucking authority cost rates.

How Much Does Trucking Authority Cost?

When you go fully independent, you assume a lot of expenditures, paperwork, and duties that were previously covered by your leased trucking service. The following are the key cost sources and their various approximations for filing fees:
  • Registration as a sole proprietor or a limited liability company: the registration system varies by state, $250 to $800 per year
  • Unified Carrier Registration UCR: $76
  • Process Agent Designation: $35 to file form BOC-3, plus $100 to your chosen agent each year
  • Registration fee for Permanent Authority from the Federal Motor Carrier Safety Administration (FMCSA): $300
  • Fees for the International Registration Plan: vary from $200 to $2000, depending on how many states you intend to run
  • Base plate fees: varies by state but typically range from $275 to $1,000 per year
  • Heavy-use vehicle tax: IRS Form 2290, $100 to $550 annually
  • DOT alcohol testing program and drug test: costs between $50 and $100 every two years
  • Inspection fees: range from $50 to $100, depending on the state

How Do I Start My Own Authority?

The FMCSA, also known as an operating authority, grants a trucking company to transport freight as a motor carrier. To conduct interstate commerce with freight, you’ll need your trucking company to follow key carrier safety regulations. You can choose your own cargos and plan your own routes and schedules if you have a trucking company. To put it another way, it provides you ultimate control over how you function as a trucker. If you wish to be an owner-operator, obtaining trucking authority and regulatory compliance is a prerequisite. But where do you begin? Obtaining a motor carrier authority may appear difficult, but it is only a matter of following a few steps.

Establish Your Business Entity

Taking on the role of owner-operator is the same as taking on the role of business owner. You must set up the business structure just like any other firm. The fact that there are so many options for forming a company corporation adds to the complexity. It might be tough to determine which sort of corporate entity or structure is best for your own trucking company. There are various options for forming your business entity, like incorporating, forming an LLC, and so on. Here’s a rundown of all the numerous methods to start a trucking organization:

Sole Proprietorship

This is the simplest way to start a business and a fantastic option for first-time business owners. There’s no official process for forming a sole proprietorship, you’re a solitary proprietor as soon as you obtain a load and hit the road.

Partnership

This is the same as a sole proprietorship, but the trucking firm is owned by several people. Similar to forming a sole proprietorship, forming a partnership does not necessitate any official paperwork or setup.

Corporation

Corporations differ from sole proprietorships in that they treat the business as a separate entity from the owners, shareholders, and workers. For a variety of reasons, incorporation is not a desirable strategy for owner-operators.

Limited Liability Corporation

Another realistic alternative for potential owner-operators is to form a Limited Liability Corporation or LLC. You’ll have to jump through a few more hoops than you would with a sole proprietorship, but an LLC has its own set of advantages that are unique compared to others on this list.

Get A USDOT Number

The next item you’ll need is a United States Department of Transportation (USDOT) number. To get your authority, you’ll need to fill out one of the three forms provided by the FMCSA. The entire process of obtaining a USDOT number is simple, go to the FMCSA website and fill out the following form. What’s more, the best aspect about getting a USDOT number is that it’s free.

Get an Motor Carrier Number

The government uses a motor carrier number, or a motor carrier authority number, to maintain track of carriers and federal broker authority, and it is this number that will allow you to conduct interstate commerce and gain intrastate authority. There are multiple operating authorities available.

Designate Process Agents (BOC-3)

A BOC-3 identifies process agents in each state who can represent motor carriers in legal proceedings or when a court order is served from any US state. Essentially, the BOC-3 signifies that a plaintiff can serve lawsuits or legal proceedings to anyone in any location where you are not based.

Get Trucking Insurance

Of course, your truck, like any other vehicle, will require insurance in the event that something goes wrong. In the event of an accident, trucking insurance will cover both property damage and bodily injury, just like conventional automobile insurance. It also includes coverage for other parts of your own trucking business. It’s critical to search around for insurance because rates are highly changeable, especially for new owner-operators.

Complete The UCR

All trucking companies that transport cargo across the state signed an international fuel tax agreement, or cross international boundaries must pay an annual charge known as the Unified Carrier Registration (UCR) with the Unified Registration System. The size of the company’s fleet determines the annual UCR fee. When compared to carriers with a large fleet of trucks, the fee for first-time owner-operators with a single truck would be lower. You must complete the UCR in your home state. However, several states have chosen not to participate in the UCR. It’s important to note that you are not exempt if you live in one of those states. The UCR must be completed in a nearby state.

Signage

The next step is to apply decals on your truck once everything is in order and you have your authority. On your truck, you’ll need the following two pieces of signage:
  • The legal name of the trucking business that owns and operates the truck. According to the MCS-150 form, this is the legal name.
  • The FMCSA issued a DOT number that began with the initials “USDOT.”
Choose contrasting colors to make the signage stand out because it must be very visible. Assuming you wish to put your own name on the side, if it’s not the same as the motor carrier’s, you can do so as long as it’s followed by the words Operated by.

What is Trucking Operating Authority?

Trucking operating authority, also known as operating authority or motor carrier authority, is the government’s approval to be paid to transport freight. You must first obtain your operating authority before you can establish your own trucking authority. You can then begin doing business under your own MC number once you obtain it. A freight broker authority must also obtain operating authority and be granted a freight forwarder number or FF number. However, the FMCSA, which oversees the trucking industry, plans to no longer need an MC  number. Instead, trucking companies will be identified solely by their DOT numbers.

Secure Your Own Trucking Authority

Our goal is to help your trucking industry business obtain insurance as straightforward and painless as possible. We can supply your company with reasonable fleet insurance for a variety of industries, whether you are a small business or a huge enterprise. Strong Tie Insurance has been protecting businesses from auto accidents with inexpensive fleet insurance for more than 20 years. We will assist you in insuring each car separately or combining them into a single policy. Our clients’ success is, and has always been, our top priority. Fill out a simple inquiry online form to learn more about commercial fleet auto insurance and how we can help protect your business. Starting your own trucking business is no mean feat, and a successful authority application sets you off on the right path. Get a free quote, contact us at Strong Tie Insurance today.

Trucking Authority FAQs

It is important to remember that having your own trucking authority also gives you the weight of responsibility. You need to build your own network of clients so you can keep operating. You’re also responsible for keeping your licenses and permits updated and taxes paid.

But the freedom it grants one in terms of finances and operational strategy allows for endless possibilities in expansion and longevity. If the business is something you want to do long-term, having your own trucking authority is the most suitable choice for you.

1. Register Your Company

As with other businesses, you need to register your trucking company in your state. You need to choose the type of entity when you do. It could be a sole proprietorship or a limited liability company. If you choose the latter, you must obtain an employer identification number (EIN) from the Internal Revenue Service (IRS).

2. Secure Your Company Number from the USDOT

The US Department of Transportation (USDOT) requires all trucking companies to register with them. They issue a number that becomes the company’s operational ID number.

It identifies all relevant company details typically needed by freight brokers and shippers. Examples are truck type and hauled cargo, safety, and compliance.

3. Obtain Your MC Number from the FMCSA

The Motor Carrier (MC) number is a requirement to engage in interstate commerce. You will need commercial trucking insurance together with a completed BOC-3 form to apply for one. You have 20 days to secure these before the Federal Motor Carrier Safety Administration (FMCSA) activates your MC number.

4. Pay Your HVUT

The Heavy Vehicle Use Tax (HVUT) is an annual tax imposed on all trucks and heavy forms of transportation operating on public highways.

5. Set Up Your IRP

Your International Registration Plan (IRP), registers all your trucks that operate in more than one state. You need the following to obtain an IRP:

  • Vehicle Identification Number
  • Truck model
  • Cost of vehicle
  • Date of purchase
  • Title information

Once you have registered and paid the fee, you will be issued your apportioned plates.

6. Create an IFTA Account

The International Fuel Tax Agreement (IFTA) streamlines the reporting of fuel use taxes by truck drivers that operate in multiple states. It applies to the lower 48 US states and Canadian provinces.

Once you have this, you will receive an IFTA license and two tags for each vehicle. Additionally, you are tasked to file a fuel tax report at the end of each fiscal quarter, mentioning all fuel purchases and miles traveled in the applicable states.

7. Secure UCR permit

Unified Carrier Registration (UCR) permit verifies that you have commercial trucking insurance covering you in the states you operate in. You need your MC number and USDOT for this.

8. Get screened for drug and alcohol use

The USDOT and FMCSA require that all truck owners and drivers submit negative drug screens before driving or hiring employees.

Having your own trucking authority comes with pros and cons. But the advantages outweigh the downsides:

You Make Your Own Decisions

Having your own trucking authority gives you freedom over your budget, time, and vehicles.

You Work on Your Own Schedule

If you’re the owner of the business, you get to decide when to work and when to take time off.

You get to choose your own cargo and runs

When you operate as an independent contractor, you get to decide what cargo to haul. This gives you control over your route, how much earnings you make, and how long you will be out on the road.

You Control Your Income

If you have your authority, you are not limited to a fixed rate or one type of haul. Your options are open to expansion or changing of cargo.

You also get to minimize pay cuts and overhead expenses. But this is when you learn to manage your operational expenses which tend to be higher than profit at the start.

When you go fully independent, you take on all the financial responsibilities needed to keep operating. The following are the common and major expenses of a trucking company:

  • Business Registration – $250 to $800 annually
  • Registration fee for an MC Number from the FMCSA – $300
  • Fees for the IRP – $200 to $2000, depending on the number of states you intend to operate in
  • Unified Carrier Registration – $76
  • HVUT with IRS Form 2290 – $100 to $550 annually
  • Base plate fee – $275 to $1,000 annually
  • Alcohol and drug test – $50 to $100 every two years
  • Inspection fees – $50 to $100