If you want to start your own trucking company and participate in interstate commerce, you must have an active operating authority. The Federal Motor Carrier Safety Administration (FMCSA) requires you to have an active authority in all states to operate in the trucking industry. There are different types of authorities, depending on the cargo type that states require.
Getting your own authority is a big step in your career growth and allows you to get paid for hauling freight as an owner-operator. It is important to follow all the steps to get a trucking authority; otherwise, it will take longer to go active and will delay you hauling loads and making money.
Steps on how to get a trucking authority
Register your trucking company
If you’re starting a trucking company, you must register your business in the state you plan to operate from. You also need to decide what business entity you want to create if you haven’t already. The most common types of entities are sole proprietorships and limited liability companies.
Get an EIN
If you decide to start a limited liability company (LLC) you will need to obtain an EIN issued by the IRS to operate your business. It is not mandatory to have an EIN with a sole proprietorship. However, it is highly recommended. If you do not get an EIN, you need to operate your business under your personal social security number, which could open you up to potential fraud problems.
Get your USDOT number
All trucking companies must register with the US Department of Transportation. A DOT number is the company’s ID number that provides all company information, including vehicle type, cargo, safety, and compliance. This information is available for freight brokers and shippers to access if you are hauling loads for them. Your USDOT number is renewed every 2 years or whenever company information is updated or changed.
Apply for your MC number
You must have an MC number to participate in interstate commerce. You must file for your authority with the FMCSA. Once you’ve filed, you get your MC number immediately, but it is not active yet. You’ll have 20 days to complete your BOC-3 and get an insurance policy after you file. Once those are filed with the FMCSA, your MC authority will become active within the next 2-3 weeks, and about 2 weeks after that, you will receive your authority certificate in the mail. It is important to note that you cannot legally drive your truck until you’ve filed your BOC-3 and insurance policy and your MC number goes active.
File a BOC-3 & get an insurance policy
You have 20 days to complete this step. The FMCSA requires you have a designated process agent in each state that can serve legal paperwork on your behalf – a BOC-3 shows that you do. You must also have an active insurance policy in place for you to drive your truck and your trucking authority to become active. If you make any changes to your name, address, or phone number, you need to update your BOC-3 and insurance policy to avoid going on an inactive list.
Pay your HVUT
You must pay your HVUT before setting up your IRP. The Heavy Vehicle Use Tax is an annual tax assessed on all heavy vehicles operating on public highways.
Set up your International Registration Plan (IRP) and get your apportioned plates
If you are operating your trucking company within multiple jurisdictions, you must report all miles driven and pay taxes on them annually. For your IRP, you must register all fleets of vehicles that operate in more than one jurisdiction. You’ll need your truck’s VIN, title information, purchase cost and date, and make and model of your vehicle to register for your IRP. You will also need to have some kind of idea of the states you plan to haul in before you register. Once you have registered and paid the fee, you will receive your apportioned tags.
Create an International Fuel Tax Agreement (IFTA) account
An IFTA agreement is with the lower 48 US states and Canadian provinces to simplify the reporting of fuel use taxes by truck drivers that operate in multiple jurisdictions. You must complete a fuel tax report at the end of each fiscal quarter, including all miles traveled in participating jurisdictions and all fuel purchases made. Once you have set up your IFTA account, you’ll get an IFTA license and two decals for each qualifying vehicle.
Complete a Unified Carrier Registration (UCR)
A UCR permit verifies that you have active insurance in the states that you operate in. This requires that trucking companies register their vehicles within their operating state and pay an annual fee based on their fleet size. This registration must be renewed every year and you’ll use your MC number and USDOT to apply.
Enroll in a drug and alcohol consortium
All truck drivers must register with a drug and alcohol testing center before they can get on the road. The FMCSA and USDOT require that all truck drivers have negative drug screens before hiring others or driving themselves.
Before you can start a trucking company you must have all your compliance in order. If you skip a step your MC authority will not go active, you will not be allowed to drive a truck, and there will be large delays in starting your trucking business. Once all this has been completed, make plans to get your trucking business paid with trucking factoring