How to Get Your Operating Authority

Posted: 22 Jul, 2015 by Gary Land


73 Comments

Categories: Trucking Regulations

Tags: AuthorityCarrierOwner-Operator


UPDATED: May 8, 2018.

If you're an owner-operator who's leased on with a carrier, you've probably toyed with the idea of getting your own authority. While there's a lot less financial risk when you’re leased on, many drivers want the chance to earn more money and run independently. 

It takes about 5 to 7 weeks to complete your authority. There are a lot of upfront costs associated with getting your operating authority, not to mention the maze of regulations. To help you decide whether or not to take the plunge, here's a quick rundown of the requirements to start your own trucking company. 

Need assistance getting your authority? DAT Authority can handle the paperwork for you.

 

What is Operating Authority?

Any for-hire carrier over 10,000 GVW who will be crossing state lines is required to have authority from the U.S. Department of Transportation (USDOT). You're also required to have an MC (motor carrier) number, issued by the Federal Motor Carrier Safety Administration (FMCSA), which allows you to transport regulated commodities.

Before You File

You need to decide on a few things before you start filling out applications:

  • Business name – You'll need to choose a name for your company that's not already in use.
  • Business type – Get with your accountant to decide how your business should be organized: sole proprietorship, partnership, LLC, or corporation. Each comes with a different level of liability, and the taxes for each vary based on the state you’re in.
  • Freight – What are you going to haul? Who are your future customers? If you don't already have customers, you can search for available loads on a load board

Proof of Insurance

Before the FMCSA approves your authority, you’ll need to submit proof of liability insurance. This is one of the biggest obstacles for owner-operators looking into getting their own authority, since you’re now taking on the liability costs that the carrier you were leased on with was paying for. All carriers are required to have a minimum of $750,000 to $1 million in liability insurance for general freight or $3-5 million for hazmat. You will also have to cover $100,000 in cargo insurance.

Insurance premiums will vary based on your driving record, the state you live in, and the states you plan to do business in. New carriers are often charged a higher premium, with the price typically dropping once the business is more firmly established.

Other Requirements

But wait, there’s more:

  • Process agents – FMCSA requires you to have a process agent in every state you do business in. This is the entity that would get served papers if you had legal trouble in a state other than the one your business is based in. You file this with Form BOC-3.
  • Heavy Highway Vehicle Use Tax (HVUT) – Any rig weighing at least 55,000 lbs has to pay HVUT, which is $100 plus an extra $22 for every 1,000 lbs the rig weighs over 55,000. This is filed with IRS Form 2290.
  • Unified Carrier Registration (UCR) – This is filed with the state you’re based in, and the fee is based on the number of trucks in your fleet (power only). If you have 1 or 2 trucks, the fee is $72. Fleets of 3-5 trucks pay $209, and it keeps going up from there.
  • International Registration Plan (IRP) – Also known as your apportioned base plate or cab card, which is filed with your state. Beginning in 2015, the IRP began full reciprocity, which means all carriers will be apportioned for all of the Lower 48 states and the 10 Canadian provinces. These fees will be between $1,400 and $2,400 for the first year of registration.
  • IFTA – There’s a nominal fee for getting set up, based on your state ($0-$10).
  • Other state regulations – Some states require weight distance permits when traveling through them (NY, NM, and KY). Oregon requires a permit and a bond. Some states also require intrastate authority.
  • Drug and alcohol testing – Your new company must enroll in a drug and alcohol testing program, and anyone in the company holding a CDL must pass a screening. 

DOT New Entrant Audit

Once you clear all these hurdles, you’ll be enrolled in the DOT New Entrant Program. Within your first 18 months of business, you’ll receive an audit that will focus on:

  • Driver qualifications
  • Driver logs
  • Maintenance programs
  • Accident register
  • Driver qualification files
  • Drug and alcohol policies

 

Sound like a lot of hassle? DAT Authority can take care of all the paperwork, including all federal fees, or we can help you during any part of the process.

Leave your comments

  • profile

    44Hippie44

    • 7/24/2015 10:58:48 AM

    Where were you in 2009 ? We found out about all the fees the hard way. Not to mention the waiting period on the MC ,lease a truck for $600.00 a week plus everything else then find out you have to wait 30-45 days before you can obtain your first load. That was really hard to swallow we were behind before we even started .

    Reply 
  • profile

    Marc

    • 7/25/2015 11:08:58 AM

    Great article. These hoops/costs may seem big or small depending on your resources. Just remember, now you have to get your truck , trailer, and driver if you aren't driving yourself. Cost and hoop jumping wise, are far more difficult then these initial steps. Also remember that it costs a rediculous amount of money just to operate your truck, and you may have large unexpected expense, as well as every mile you drive, that equipment has one less mile left in it. (Always be holding money back to replace/upgrade equipment). Then you have costs like subscriptions to help find you loads, backend billing responsibilities, etc. Another huge thing, do your best to stay away from factoring companies at all costs. 5% flat fee straight off the top is very harsh to your bottom line profit. Either front that money yourself, or have a line of credit where your paying that 5% per year, and not per transaction. Can't stress that enough. Good Luck! Trucking is extremely tough but can be extremely rewarding. Keep your costs down by not getting too eager at first wanting to add equipment. This way you make your mistakes (learning curve) x 1 truck instead of x multiple trucks that could out you out of business before you even realize it. :2c

    Reply 2 comments
  • profile

    Azzie Grillo

    • 10/7/2015 3:10:35 PM

    Useful comments ! I am thankful for the specifics ! Does someone know where my assistant would be able to get ahold of a template DoT Accident register form to type on ?

    Reply 1 comment
  • profile

    Jon

    • 10/30/2015 8:18:34 AM

    All this I formation is also available in this manual.. Https://www.fmcsa.dot.gov/safety/carrier-safety/motor-carriers-guide-improving-highway-safety

    Reply 
  • profile

    Lyle

    • 4/25/2016 2:07:38 PM

    I am looking at purchasing a 24ft box truck and doing some pickup and delivery work, how would this affect what I have to do to get my authority?? And the fees

    Reply 1 comment
  • profile

    Stephanie

    • 5/2/2016 8:44:05 AM

    Are there any additional requirements if I am not an owner/operator but would prefer to hire drivers?

    Reply 1 comment
  • profile

    The Transporter

    • 7/15/2016 11:32:42 PM

    do hot shot drivers file irs form 720

    Reply 
  • profile

    Paul

    • 8/1/2016 8:27:09 PM

    Do I have to be at the age of 21 in order for them to approve? I'm 20 right now and wanting to start hauling cars but not sure what the regulations are. Thanks

    Reply 1 comment
  • profile

    glenn carr

    • 8/28/2016 2:41:25 PM

    i am a company driver planning to make a move of being an owner operator . What i'd like to know is , how much up front money would i need for my authority , insurance , permits and everything else . I should mention that i'm looking into doing hotshot , a dually pickup and a probably a 40' or 53' gooseneck trailer. Transporting whatever i can, cars or general freight to all 48 .

    Reply 
  • profile

    Shawn Sarwar

    • 9/7/2016 6:24:32 PM

    Trucking industries are very expensive but super complicated and fully unpredictable down fall due to many competitions with rising fuel expenses and insurance coast combining .What a fruit!!!

    Reply 
  • profile

    Kristi

    • 10/21/2016 7:01:18 AM

    I am getting ready to renew for 2017 and I am wanting to make sure I renew everything that is needed. We are a sole proprietor 80,000 gross. Is it UCR, IFTA, IRP, HVUT, BOC-3 that needs to be renewed? Or are only some required to renew? We have all the original paperwork and permits done, but what I need to know is what needs to be renewed every year?

    Reply 1 comment
  • profile

    Richard

    • 1/22/2017 5:30:37 PM

    I'm looking into starting my own trucking business and I wanted to know is there any requirement on how old the truck can or cannot be when using this job boards do they require a vehicle to be within a certain age?

    Reply 2 comments
  • profile

    Eric moreno

    • 2/1/2017 3:03:44 PM

    Can I be 18 years old in the state of California and pursue a trucking business?[

    Reply 1 comment
  • profile

    Carl Drummer

    • 2/2/2017 11:05:21 AM

    Are any companies out there that will finance a truck without 2 years of tax history and all the other red tape. I just need to get a truck a get rolling for myself.

    Reply 2 comments
  • profile

    Thomas A Norwood Jr

    • 2/2/2017 7:33:38 PM

    I'm an independent contractor for a large company and plan to start a fleet of my own under that company but I plan to venture off on my own. My questions is, is there a place where I can go to to get all the things mentioned if not where would be a good place to look for each one? Thank you Thomas

    Reply 1 comment
  • profile

    George Dorman

    • 3/16/2017 10:09:16 AM

    Are all these requirements needed to haul rvs and travel trailers. Truck is F250 registered at 26K. Want it gor backhauls.

    Reply 
  • profile

    jim

    • 4/24/2017 8:52:38 PM

    can you satrt an mc authority and have it, but not use just have as back up plan to book your own loads if the company your leased on might go on. if owner operator is it cheaper to find your own cargo insurance or stuck with theirs

    Reply 1 comment
  • profile

    S.m.

    • 5/2/2017 12:31:04 PM

    I need an operating authority because one of my local drivers (16ft box truck) hasn't been in the U.S. for More than 5 years. Do I really need to dump all this money in to get an fmcsa operating authority?

    Reply 
  • profile

    DAustin

    • 5/4/2017 9:44:14 AM

    I have officially launched our business in Texas and we hit our 30 day mark so we finally got a load and now I find out there are a lot more requirements to file, Texas DOT was a huge one. I have spent thousands already and I don't want to get fined for not following the rules, what else must I file to be in compliance?

    Reply 1 comment
  • profile

    Tiffany

    • 5/4/2017 10:19:32 AM

    Did you get your MC and DOT #'s? Your drug test facility? IFTA for your fuel tax by state? Insurance? I feel like I'm missing something but not sure.

    Reply 1 comment
  • profile

    Richard

    • 5/5/2017 5:19:34 PM

    I have a cousin who is gonna retire and wants to give me his authority is this poss?

    Reply 1 comment
  • profile

    Greg

    • 5/14/2017 12:38:51 AM

    If I charge my owner operators 15% to run under my authority how do I make sure I get my 15%. Other then just signing a contract. If I find the loads then I would know about it but if they find their own load without saying anything to me how would I know.

    Reply 2 comments
  • profile

    Alice

    • 6/4/2017 6:00:20 AM

    When getting your authority do I need to pay my insurance up for the first year or monthly.. what's best??

    Reply 1 comment
  • profile

    Vic

    • 6/7/2017 8:49:29 AM

    So what an average cost to start your truckin company

    Reply 
  • profile

    KMcNeill

    • 6/22/2017 8:50:42 AM

    Can anyone give me an estimate on about how much I will spend to get my authority,insurance, leasing a truck and trailer and any other logistics I made need. In Houston Texas

    Reply 1 comment
  • profile

    CMcKinney

    • 7/15/2017 3:13:41 PM

    Hello Tiffany, where are you located? And how can I contact you?

    Reply 
  • profile

    Karimi

    • 8/15/2017 1:32:35 PM

    Hi , I bought a cargo van 15 ft for my carpet business and I do deliveries outside state . Do I need usdot number? . Thanks

    Reply 
  • profile

    Lisa Carrigg

    • 9/11/2017 9:26:09 PM

    How long will this take if paid DAT to do paperwork for me

    Reply 
  • profile

    Shawn

    • 10/17/2017 10:42:34 PM

    This article is very helpful and no it’s not a lot considering the end result

    Reply 
  • profile

    Patrick L McBride

    • 12/4/2017 3:05:27 PM

    Can you please email me all information and the services you provide along with the cost and how much money is needed to get started. Also how much is it to get the express payment options too. Thanks. Patrick L McBride.

    Reply 
  • profile

    James Lewis

    • 3/15/2018 6:11:04 AM

    I want to start my truck company driving box trucks. Do I need a MC number? Can someone help me out? What steps do I need to take? I read the article and it was great but I still need help. Can someone help?

    Reply 
  • profile

    thomas m

    • 4/14/2018 6:27:57 AM

    If I wanted to start with a 26 ft 32000 gvw truck and rent it from someone like budget Can someone give me a list of the required things I would need to get started? I have a clean driving record and 20 years exp driving straight trucks locally .I know that it will eat into the profit renting but it eliminates truck up keep so I can get started and build a client base. As I read it I need the DOT/MC number, proof of insurance, im not sure what process agents are but I need that. I shouldnt need hvut I dont think as im only 32k gvw the rest is confusing I plan to haul midwest no canada any help would be greatly appreciated thanks in advance

    Reply 1 comment
  • profile

    Michael

    • 6/2/2018 3:48:07 PM

    If I'm running my own truck GVW 80,000lb in my state (NC) were I live and never cross state lines do I need to have Authority? Or just DOT and MC#

    Reply 1 comment
  • profile

    Greg

    • 6/5/2018 2:14:03 PM

    What is the cost to get my own authority to run only in Texas. I plan on hiring owner operators with their own truck and trailers to run under my authority. Later on I my lease trailers to owner operators with no trailer.

    Reply 2 comments
  • profile

    Mari

    • 6/15/2018 10:04:19 AM

    How or where do I check to see if the company name I want is not already in use?

    Reply 
  • profile

    Tony

    • 6/26/2018 6:04:57 AM

    I have a question. If I own 2 trucks and got my own authority. I'm currently leased on at another company. I want to get my own authority and put a driver in my second truck under my personal authority but continue to be leased on at the other company in my other truck. Can I do this?

    Reply 1 comment
  • profile

    Ruth

    • 6/28/2018 2:19:50 AM

    Hi We are currently a freight broker and in need of getting a DOT and MC number... without leasing or buying a truck, what is the process of getting a DOT and MC number in the state of california? What are the requirements? How long is the process?

    Reply 1 comment
  • profile

    Patel

    • 7/7/2018 3:18:25 AM

    How would i get insurance since ill be renting truck as I get loads?

    Reply 
  • profile

    New owner ops

    • 7/8/2018 4:38:37 AM

    My husband and I are new owner ops. We want to get our own authority. We are under a company they take 13 percent. We've went from main to New York paid $1950 10hr drive we don't want to do New York , New Jersey because of tolls and feul. But the guy sends us to these places anyway. We are a team but he's not running us like a team. We want to Know if these prices for loads are good. By the way that load was 43 plus pounds . We started from Texas to Boston 15 thousand pounds for $5000 then to main sise by side in Canada at the border that was $3000 and the load I mentioned earlier $1,950 43 pounds plus weight to New York New Jersey. We had a ton of tolls an at $2,000 in fuel. I asked about an EZ pass but they say the company we are under has to provide it. He says we are contracted so we have to pay. We pay for everything fuel, insurance, tolls, (you name it) anyway 🤔 we we're thinking if we went on our own would it be best to cut out the expense of paying the guy 13 percent . We understand at first it may be a struggle but would it be best to go on our own or with another company

    Reply 1 comment
  • profile

    Abe Clark

    • 12/2/2018 4:45:43 PM

    I'm getting ready to start up my hotshot company and run 3 states what all will I need for this

    Reply 
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