How to Get Your Own Authority

Are you an owner-operator who leases with a carrier? Do you want the chance to earn more money and really be your own boss? Have you considered getting your own authority? Getting your own operating authority not only gives you unlimited earning potentials, but you also get all the headaches of a business owner.

Getting your own authority requires more than just figuring out your type of operation. You need start-up money for various insurances, permits, equipment, and other expenses that will pop up along the way. Having your own operating authority allows you to do interstate commerce. In order for any carrier to conduct interstate commerce, you must have a US DOT number. Additionally, up until October 23, 2015 you’ll need a MC number issued by the FMCSA to transport regulated commodities. After October 23^rd the MC number will be eliminated when the new Unified Registration System goes live. There is a $300 fee for the DOT/MC number.

How to get your own authority

Unfortunately getting your own operating authority is not cheap. It comes with a rather hefty price tag, but it might be worth it in the long run. Let’s take a look at what it will cost you to obtain your own operating authority.

DOT/MC Number - $300
Proof of Insurance – You must submit a proof of liability insurance before the FMCSA will approve your authority. If you currently lease your truck through a carrier, they are most likely footing this large bill. All carriers are required to have a minimum of $750,000 in liability insurance for general freight and if you carry HAZMAT freight that price climbs to $1 million. And those numbers could go up in the future. Insurance premium prices depend on your driving record, the state you live in, and what states you do business with. Generally insurance premiums will range between $4,000 and $16,000 per truck per year.
Process Agents – The FMCSA requires you to have a process agent, or someone who receives legal papers if you are served, in every state you do business in. You must file a Form BOC-3 and pay $35.
Heavy Highway Vehicle Use Tax (HVUT) – Every truck weighing at least 55,000 lbs must pay the HVUT filed with the IRS Form 2290. The tax is $100 plus an additional $22 for every 1,000 lbs over 55,000.
Unified Carrier Registration (UCR) – This fee is filed with your home state or the state in which your business is based. It varies on the number of trucks in your fleet with one or two trucks costing $76.
International Registration Plan (IRP) – You may know this as your apportioned base plate or cab card. These fees cost about $2,100 for the first year of registration.
IFTA – This fee is based in your state and costs between $0 and $10.

In order to file for your own authority, you’re looking at a minimum of $6,000 in start-up costs or potentially much more depending on your liability insurance premiums. OOIDA recommends before you haul your first load under your own business you have at least 60 days worth of operating capital set aside.

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Before you file for your own authority you must also create a business name. If you need to change a business name it will cost you $14. You should also discuss with your accountant about how your business should be organized. Should your business be a sole proprietorship, partnership, LLC, or corporation? Each business type comes with a varying level of liability and tax depending on your home state. You’ll also want to consider the type of freight you’re going to haul. Specialty freight can cost you more in the long run.

As a new company you must enroll in a drug and alcohol testing program. This is mandatory for anyone in your company holding a CDL in the present and the future. You’ll also be responsible for maintaining all the records and reports. Additionally, as a new DOT entrant, you must undergo a DOT New Entrant Audit within the first 18 months of business. The audit will focus on things like driver qualifications, driver logs, accident register, and drug and alcohol policies among other things.

While it may appear that you have to jump through hoops and spend a lot of money to obtain your own operating authority, it might be one of the best business decisions you make.

Dan White

After graduating from the University of Tennessee with a degree in Transportation, Dan spent 28 years in the traffic organization at Western Electric, AT&T and Lucent Technologies. He also spent one year as a Dispatch and Warehouse Manager for North American Van Lines. Dan has worked for ATBS since 2004 and helps drivers who are struggling in their business and need in-depth assistance to get back on their feet. He uses his previous experience and knowledge of business management and the trucking industry to assist drivers.