Published on May 18th, 2021 | by Bibhuranjan0
Become Your Boss with Trucking Authority
What is Trucking Authority?
If you are a truck driver and wanted to start your own trucking company, you will need a trucking authority. FMCSA or Federal Motor Carrier Safety Administration is the organization that issues trucking authority or operating authority. This authority is issued by using a Motor Carrier Number or MC.
If you have trucking authority, it means that you can earn money by transporting freight. The main difference that you will have the authority to transport freight by operating your own trucking company.
Need to have Multiple Authorities
When applying for the trucking authority, you will find out that there are different types of authorities. Mainly it depends on the type of cargo you will carry. If your team is transporting multiple types of cargo, you will need to get multiple trucking authority according to all cargo types.
Also, if you are moving cargo interstate, some states may require you to get interstate authority. These interstate authorities may be of different types according to the cargo type.
Benefits of having Trucking Authority
According to the American Trucking Association, more than 1.1 million drivers will be needed by 2029 and that shows how beneficial trucking authority can be.
It is normal that after working as a trucker or owner-operator, you start looking for your authority. Trucking authority can be considered as a whole new start of your career. It brings a great career growth opportunity along with the independence to operate the business on your own terms.
Operating authority allows you to hire the drivers of your choice for your trucking company. With the increase in the number of trucks and drivers in your company, greater responsibility and workload comes as you will be finding and negotiating loads.
Pre-Trucking Authority Process Actions
To start the process of securing operating authority, there are some actions that you need to take. Let’s have a look at those actions.
1- Type of Authority You Need
The type of trucking authority depends on the type of cargo you transport. If you are transporting multiple types of cargo, you may need multiple trucking authority as well.
2- Name of Your Business
You need to register your business and it is always recommended to register with your state through the secretary of state. You will be asked to register the business with a name.
3- Business Structure
You must demonstrate how you will be organizing your business to maximize financial and operational success. A professional accountant can give a piece of good advice for this.
Your tax liabilities will be different once you start your company and for that, you need to get an Employer Identification Number (EIN).
5- Get Cargo Insurance and MC Number
It is always recommended to get early approval for the cargo insurance to get cover against accidents and visit the FMCSA website to get your MC number as well.
6- Maintain Cash for 60 or More Days
Sometimes it could take more up to 45 days to clear an invoice. That’s why you must have cash for more than 60 days to cover the operating costs like fuel and repairs.
Process of Getting Trucking Authority
1- Apply for Authority
First, you need to secure the authority by applying with OP-1 or OP-1(P) form along with truck information, tax ID number, incorporation details and license plate information, and pay the application fee.
2- UCR Permit
The next step should be securing Unified Carrier Registration if you will be doing commerce interstate.
3- Pay your HVUT
You must pay Heavy Vehicle Use Tax that becomes liable every year. It is mandatory to pay if you want to use public highways.
4- IRP Registration
This is required after getting your trucking authority if you will be transporting goods internationally. It is an agreement between 48 states and Canada.
5- IFTA Account
The International Fuel Tax Agreement (IFTA) is an agreement between 48 states and Canada. This tax is submitted annually. The purpose is to make it easy for you to move in different jurisdictions and ensure every state share the revenue.
6- Drug and Alcohol Testing
Before and after receiving the trucking authority you must have a negative drug test. Also, all the drivers that you hire, must have negative drugs test as well.
Cover Image from Unsplash