Trucking Authority: Ultimate Guide

If you're interested in a career where you transport goods throughout the United States, then you're going to need trucking authority. In our beginner's guide to What is Trucking Authority? Answeredwe answered the key questions surrounding Trucking Authority.

In this Ultimage Guide, we walk you through the process of getting authority, who commissions it, and why you need to obtain it when embarking on your new career path as commercial trucker.

The terms trucking authority, operating authority, freight authority, and motor carrier authority all describe permission granted by the Federal Motor Carrier Safety Administration (FMCSA) to transfer goods in the United States in exchange for a profit.

While there are some specific exemptions, most drivers find that they will need to have trucking authority to move any sort of freight or participate in interstate commerce.

For those who are unfamiliar, interstate commerce is when you're engaging in the transport of goods across state lines. This is not to be confused with intrastate commerce, where you're only transporting goods within a single state.

As a rule of thumb, companies that fit the following descriptions are required to have interstate operating authority complete with MC and DOT numbers:

• Transport passengers in interstate commerce for a fee or other form of direct or indirect compensation.
• Transport or arrange for the transport of federally regulated commodities for a fee or other compensation.

It is crucial to note that owner-operators who are leased to another motor carrier are not required to have their own trucking authority. Rather, since they share their revenue with the motor carrier, they may legally operate under the motor carrier.

Even though you may operate underneath another motor carrier's trucking authority, there are many benefits that you can gain from obtaining your own trucking authority. If you plan on being an owner-operator or obtaining a large fleet of trucks, you'll want to have the freedom of your own trucking authority. Here are some of the greatest benefits of having your own authority.

1. Flexibility

Probably one of the biggest benefits that truckers get from obtaining their own operating authority is flexibility. You're able to choose which jobs you want to take and which ones you want to refuse. This gives you more control over determining what route you take and which jobs to pick up along those routes.

2. Profit

Another great benefit to getting your own operating authority is that it allows you to develop different sources of revenue. You're no longer confined by what another motor carrier offers you. Now, you're able to choose your own jobs and negotiate the pay you receive for them.

3. Autonomy

When you obtain your own trucking authority, you can not only choose your own loads but also hire your own drivers. You can establish a fleet of your own or subcontract owner-operators to haul loads for you.

4. Interstate Travel

If you've only been operating in one state, trucking authority gives you the authorization to start trucking over state lines. This can open your business up to a lot more jobs and longer hauls.

Many times, you'll hear trucking or operating authority referred to as getting your number. The main designator of the authority that you get is a number issued by the FMCSA that identifies you as having the proper authority.

Most truckers will receive a motor carrier number, known simply as an MC number. This is a designation that shows you have proof to transport goods throughout the country.

However, it's important to realize that the FMCSA has three different designations of numbers they will give you based on the type of authority that they're granting you. These include the MC, FF, and MX numbers.

Is It Enough to Apply Once for Trucking Authority?

It's not uncommon to think of trucking authority as something that you have to apply for, and then you're good to go once you get it. Depending on the type of operations that you plan on, you may actually need to apply for multiple operating authorities.

Realize that each different type of operating authority will dictate what specific type of operation your business may do and the type of cargo you may haul.

Apart from getting your MC number as a trucking company, you'll likely find that you'll need to obtain a USDOT number. USDOT stands for the United States Department of Transportation, and they will provide you with a tracking number that is specific to your business.

This will allow them to monitor your safety records, vehicle classifications, and other essential details about your business. Whether or not you need a USDOT number will depend on the type of business operation that you have and the type of cargo that you'll be transporting.

It's not uncommon to think of trucking authority as something that you have to apply for, and then you're good to go once you get it. Depending on the type of operations that you plan on, you may actually need to apply for multiple operating authorities.

Realize that each different type of operating authority will dictate what specific type of operation your business may do and the type of cargo you may haul.

Apart from getting your MC number as a trucking company, you'll likely find that you'll need to obtain a USDOT number. USDOT stands for the United States Department of Transportation, and they will provide you with a tracking number that is specific to your business.

This will allow them to monitor your safety records, vehicle classifications, and other essential details about your business. Whether or not you need a USDOT number will depend on the type of business operation that you have and the type of cargo that you'll be transporting.

There are three main types of trucking authority that you can obtain from the FMCSA. It's important to note that the type of trucking authority you get will highly impact other areas of your business, like the amount of insurance coverage that you're going to need.

1. Motor Carrier Trucking Authority

The most popular type of operating authority out there is motor carrier trucking authority. This is granted to businesses that transport goods or passengers across state lines. Those given this type of trucking authority will be issued an MC number. To apply for motor carrier operating authority, you'll need to fill out form OP-1 and show proof of adequate insurance coverage.

Motor carriers looking for this type of authority will need to show proof of public liability insurance that covers both bodily injury and property damage. Companies that carry household goods will not only need to show their public liability insurance but will also need to obtain adequate cargo insurance coverage that meets the FMCSA standards.

2. Broker Trucking Authority

If you are interested in acting as a broker between motor carriers and businesses or individuals, then you'll want to consider getting your broker trucking authority.

As a broker, you're not responsible for the actual transportation of the cargo but rather for negotiating terms between the carrier and the individual or the business that needs the goods shipped. You'll need to fill out form OP-1 to apply for this type of operating authority.

3. Freight Forwarder Trucking Authority

The last type of trucking authority that you can apply for is freight forwarder operating authority. Those who fall into this category don't actually transport the cargo themselves. Rather, they organize various freight loads for shipment.

Unlike brokers who initiate terms between motor carriers and businesses or individuals, freight forwarders are all about consolidating shipments into bigger loads.

Many freight forwarders will actually take possession of the property or goods at some point throughout the transportation process, usually at a warehouse.

Freight Forwarders: Good to Know

Those looking for this type of authority will need to file form OPO-1(FF). Note that the FMCSA will issue two different types of interstate operating authority for freight forwarders.

These include freight forwarders of property and freight forwarders of household goods. Just like other types of operating authority, there are minimum insurance requirements for this type of trucking authority.

Freight forwarders who will operate at least one vehicle will have to maintain adequate liability coverage for both bodily injury and physical damage. The amount of coverage is going to depend on the gross vehicle weight rating (GVWR) of the vehicle.

If you are a freight forwarder who will not be operating any vehicles, you may waive this insurance requirement. However, all freight forwarders who are given operating authority must maintain a minimum level of cargo insurance.

Regardless of what type of operating authority you're trying to obtain from the FMCSA, there are six main steps that you'll need to follow. You'll need to complete each step in its entirety in order to be granted your trucking authority.

Step 1: Application for Operating Authority

The first step in the process of getting your operating authority is to submit relevant applications for the specific types of authority that you want. There are three different types of applications: OP-1, OP-1(P), and OP-1(FF).

The OP-1 is necessary for common motor carriers and broker operating authorities. It's also necessary for any U.S.-based enterprise carriers.

The OP-1(P) is necessary for any motor passenger carrier. The OP-1(FF) is necessary for freight forwarders. You may submit one or more authority applications depending on what type of business you plan to conduct with your new operating authority.

Step 2: Grant Letter and MC/FF Number

After you submit your application for operating authority, you'll receive a grant letter. In addition, you'll receive a motor carrier or freight forwarder number if applicable. If you choose to apply for your authority online via the FMCSA website, you'll be given access to these numbers right away.

If you apply via postal mail, it can take up to four weeks to obtain these numbers. It's important to know that your insurance company and process agents will need to have access to your new numbers in order to complete the application process for you to get your operating authority.

Step 3: 10-Day Protest Period

Whenever the FMCSA generates your grant letter, they will publish your company's application to the FMCSA register. This is a public publication that allows any individual to protest your application.

Individuals are given 10 calendar days from the date that the company's application is listed on the FMCSA register to protest it. They must supply the FMCSA with a specific reason why your company should not be issued operating authority.

When it comes to learning about operating authority, many individuals and businesses have varying questions. We'll cover some of the most commonly asked questions below to help you get a better understanding of operating authority and what you need to obtain it.

Who Does Not Need Authority?

There are only three main types of carriers that are exempt from obtaining operating authority from the FMCSA. These are:

• Carriers that operate in a federally designated commercial zone that is exempt from interstate authority rules.
• For-hire carriers that haul exempt (not federally regulated) commodities exclusively.
• Private carriers that transport their own cargo.

How Much Does It Cost to Get Your Own Authority?

In general, operating authority will cost you $300, which will be payable to the FMCSA. However, many other fees are associated with obtaining your operating authority, including insurance coverage.

In order to obtain your MC number, you'll need to pay a licensing fee for your business. This licensing fee will also allow you to obtain a DOT number at no additional cost. The fees from the FMCSA are as follows:

• Authority: $300
• Reinstatement of Authority: $80
• Notice of Name Change: $14

How Long Does It Take to Get a DOT Number?

If you decide to file your operating authority application online, you'll receive a DOT number within the hour. If you decide to mail in your application, it can take up to four weeks to receive your DOT number.

What Is the Difference Between a DOT and an MC Number?

An MC number is issued by the FMCSA and showcases your authority to conduct business across state borders. A DOT number is more of a tracking number. It's issued by the U.S. Department of Transportation and reveals core details about your business, your fleet, and your safety record.

Is Trucking Authority Hard to Maintain?

Maintaining trucking authority is fairly simple for most businesses. You'll just need to comply with all federal, state, and local regulations.

Can I Check the Status of My Application?

You can check the status of your application for operating authority on the FMCSA website anytime. Those who have been granted authority will receive a letter within a few days.

Which Types of Carriers Don't Need Trucking Authority?

As a general rule of thumb, any trucking companies that solely operate within a single state will not need to obtain operating authority. There are three other types of trucks that can operate without authority:

• Carriers that transport only their own cargo.
• Carriers that transport commodities that are exempt from federal regulations.
• Carriers that work in federally named commercial zones.

Can I Get a DOT Number Without Insurance?

You can apply for a DOT number without having insurance. However, the FMCSA will not allow you to operate with any authority until it gets proof of your insurance policy via your BOC-3 form submission.

Can I Get My Own Authority and DOT Number Without a Truck?

You may apply for operating authority and a DOT number even if you don't have a truck. However, to be issued authority, you'll need to have a truck. The reasoning is that you have to show proof of the correct insurance policy before the FMCSA can activate your operating authority.

If you want to obtain trucking authority for your business, you can reach us online or by calling (646) 844-9933.