A lot of truckers and trucking companies struggle with the concept of operating authority. Getting your operating authority is going to make you your own boss. The process can be a little intimidating, especially if you have never done this before. There is a lot of conflicting information on the internet as well and that confuses you way more than you could ever manage. This blog is going to talk about a few concepts and questions related directly to your operating authority. If you are one of the many carriers that transport goods across state borders, if you are working in a commercial zone, or if your truckers need specific operating authority to function, this blog is for you.
Having Your Operating Authority
This means that you have permission from the government to get paid for transporting freight through your trucking company across state borders. The Federal Motor Carrier Safety Administration is going to issue your operating authority. Now depending on the type of business operations that you perform your operating authority is going to be different.
What kind of cargo you transport is going to dictate whether you need multiple authorities or not. For example, you might only need an intrastate authority if you transport goods within the state borders. The same is going to apply to interstate commerce which means that you will have to obtain interstate operating authority. It is important to understand your business functions first and then apply for a relevant operating authority only.
What Kind Of Carriers Do Not Need Operating Authority?
There will be several motor carriers and numerous categories of commercial entities in the transport sector that do not need to obtain an operating authority. A few examples are given below:
- Private carriers with commercial drivers that transport their own freight
- Carriers that are working on a “for hire” basis and transport cargo that is not regulated by any federal body
- Any trucking company that exclusively operates within federally designated commercial zones and is exempt from interstate authority rules.
Note: Remember that a single federal authority or operating authority, it can be an FF number, MC number, MX number, or any other relevant authority is going to cost you $300 each. If you want to travel across states that require state-level authorities, your operating authority cost will increase significantly. In case the federal Motor Carrier Safety Administration revokes your authority, you will have to pay $80 for its reinstatement. If you add up all your licensing costs and insurance, the total expense should come out to be a little more than $10,000.
Key Benefits of Having Your Own Trucking Or Operating Authority
- You should be thankful that the 300 dollars for every individual authority is a one-time payment that you have to make. In addition to this, there are several benefits of having your operating authority.
- It is going to give you numerous growth opportunities for your business you will also have complete independence as to how you run your company
- You can charge a higher amount for your services making more money annually
- It allows you to expand your fleet of trucks and drivers
- You will also be able to find and bargain for the most suitable loads that you want to carry across state borders
Applying For Your Intrastate Or Interstate Operating Authority: Easy Steps
- You will be required to fill out the OP-1 Form first.
- Along with that, you will also have to fill out the BOC 3 form and pay the application fee.
- Once you have completed the motor carrier identification report which is the MCS 150 and the safety certificate application, you will receive your us dot number.
- The FMCSA is going to review your application and will issue your operating authority after a 21-day vetting and processing period.
- The next step is securing your UCR permit which is also very easy. Use your MC number and US DOT number to apply for the united carrier registration system.
The HVUT Payment
This is another requirement on the list that you must fulfill. The Heavy Vehicle Use Tax is an annual tax and you must pay it regularly because you are using the public highway system. Simply fill out Form 2290, and once complete, you will receive instructions to make your tax payment. To streamline this process, it is recommended to utilize the services of a third-party administrator or consortium.
Register For The International Registration Plan
The International Registration Plan is also known as the IRP. If you want to carry freight across state lines or into Canada, you need to register for this plan. It is an agreement between 48 states, the district of Columbia, and also Canada. Your third-party administrator will be able to explain to you just how this entire system works and how you need to make the payment.
Set Up Your IFTA Account
The IFTA is the International Fuel Tax Agreement. This is again an agreement between the 48 contagious states across the country and Canada. It simplifies the collection of fuel taxes across state borders. This ensures the equitable distribution of the amount you pay among all the states and jurisdictions you have traversed during your business operations. You will also need the Standard Carrier Alpha Code if you are moving military equipment or government or international loads across the country.
Enrolling In A Drug And Alcohol Testing Program
All of this becomes a part of your DOT compliance requirements. Yes. Whether it is obtaining your operating authority, getting your US Dot number, or applying for the IRP, everything is a part of your compliance requirements. Of course, some of these steps will not be relevant to you depending on the type of business that you run. Understand the rules and regulations related to drug and alcohol testing as defined by the FMCSA.
Regardless of what business functions you perform, if you want to operate trucks or run a motor carrier business, you will have to apply for the relevant operating authority. Without the relevant permissions and paperwork, you will not be able to transport goods whether you function within the state or across state borders.