A Complete Guide on Trucking Authority
Getting trucking authority is the step that gives a boost to your trucking career. If you have worked as a trucker for a long time and now planning to start your own trucking company, the most important thing that you need is trucking authority.
Why is it Important?
Trucking authority also known as operating authority and issued by Federal Motor Carrier Safety Administration (FMCSA). It is issued in the form of a Motor Carrier or MC number.
Having the trucking authority means you are allowed by the government to not only earn by transporting the cargo but you can also establish a trucking company and start transporting cargo with multiple trucks.
Trucking authority gives you freedom of work and independence. It will be up to you that how will you expand the trucking company to boost your earnings. You will be allowed to hire truck drivers and will be responsible to arrange and negotiate loads for them.
Is it Enough to Have a Single Authority?
If you are planning to start a trucking company, it doesn’t mean that you will be required to have just one trucking authority. There are multiple types of trucking authorities for different types of cargo.
You will decide how many types of cargo your trucking company will be transporting and will apply for relevant trucking authorities. Also, if you will be transporting cargo in multiple states, you may be required by different states to get specific trucking authority as per their regulations.
How to get Trucking Authority?
It is not a simple process to get your trucking authority as you need to follow multiple steps. A lot of things happen before, during the process and after you get the trucking authority. Let’s have a look at them.
Checklist of Actions Before Applying
These steps may differ in different states, however, you will be required to do certain things before applying for a trucking authority.
1- What Type of Authority Do You Need?
It is completely based on the type of cargo you will be moving. If you will be transporting multiple types of cargo, see what are the relevant authorities you need. You may also require specific authorities when moving in certain states.
2- Decide Name of your Business
Some states will require you to apply for the authority with an assumed name. You will be filling your business with your base state through the secretary of state. It is always advised to check the official website.
3- Structure of your Trucking Company
Before filling for trucking authority, you have to decide the most suitable business structure like Limited Liability Company (LLC), C Corporation, S Corporation, Partnership, or Sole Proprietorship.
4- Apply for EIN
Get your Employer Identification Number beforehand as you will need this for taxation matters of your business.
5- Get Approval for Insurance
You must check in advance if you will get the approval for the insurance to protect your business from losses due to accidents.
6- Get Motor Carrier (MC) Number
MC number is very important here as FMCSA will issue the trucking authority in the form of an MC number.
Apply for Trucking Authority
Once you have completed all the above requirements, you can apply for the trucking authority.
- Apply for the authority by paying a fee and with other truck information, tax ID number, incorporation details and license plate information.
- Fill out the right OP-1 or OP-1 (P) form
- Assign an agent for you to receive and forward documents on your behalf in all 50 states by completing the BOC-3 form
- You will have to complete the Motor Carrier Identification Report and Safety Certification Application (MCS-150). This will get you a USDOT Number.
After you Receive Authority
- The first thing you should do after receiving the letter from FMCSA is to get your UCR permit.
- Pay your heavy vehicle use tax to bring your trucks on the road.
- If you will be transporting cargo across the border, register for International Registration Plan.
- Setup IFTA or International Fuel Tax Agreement. It allows you to move among different jurisdictions and ensures the appropriate distribution of tax collected among different states.
- The final step is to enrol for the drug and alcohol testing program. All motor carriers must have a negative drug test before driving or hiring drivers.