If you’re an owner-operator who is considering getting their own operating authority, you’ll need to be aware of the regulations and costs involved. Even though the financial risk is much lower when you're leased on with a carrier, the earning potential of operating independently convinces many drivers to do so every year.
Getting your authority to operate typically comes with a hefty price tag and a maze of federal regulations to navigate, but it doesn't have to be a stressful process.
Below, we answer the following questions to help you decide whether you should take the plunge and start your own trucking company:
If you're hoping to haul freight as your own trucking company, you'll need to obtain operating authority from the Federal Motor Carrier Safety Administration (FMCSA). This is done through an application process, and the FMCSA will issue a Motor Carrier (MC) number upon approval.
For-hire, interstate carriers that haul federally regulated cargo or passengers need a motor carrier number.
Depending on what cargo you're hauling, you may need to apply for multiple types of operating authority. Additionally, some states may require Intrastate Authority if you're moving loads within their borders. It's essential to apply for the appropriate operating authority, as the entire process can take up to two months.
This chart from the FMCSA can help you decipher if you need an operating authority.
An operating authority, or trucking authority, is your FMCSA-granted legal right to operate a commercial motor vehicle when working as a for-hire motor carrier in interstate commerce or hauling hazardous materials.
A motor carrier number, or MC number, is the unique identifier assigned by the FMCSA to commercial motor vehicles that transport interstate cargo once the authority to operate is given.
Before you get your authority to operate, you need to decide on the following business factors:
Before the FMCSA approves your authority to operate, you’ll need to submit proof of liability insurance. You must have a minimum of $750,000 in liability insurance for general freight or $1 million for HAZMAT.
Insurance premiums could cost you anywhere from $4,000 to $16,000 per year per truck. The price depends 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.
You must also complete the following to get your authority to operate:
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 a New Entrant Safety Audit that will assess your:
If you're starting a trucking company, you probably have a lot of questions beyond how to get your operating authority. Foley's DOT compliance experts can help those wondering how to get a DOT number, how to pass the new entrant safety audit, and more.
Simply fill out the short form below and one of our friendly specialists will contact you to create a custom DOT compliance and trucking business plan.
Do you have more questions about Operating Authority? You can speak with a trained Compliance Specialist at Foley and get detailed information over the phone.
Not sure what to ask? Here are some common questions to ask when considering your operating authority registration:
Process and Timeline FAQs:
How long does FMCSA take to approve my MC application after submission?
Can I start operating immediately after receiving my MC number?
What happens if my operating authority application gets rejected?
Do I need to renew my operating authority, and if so, how often?
Business Structure and Setup:
Do I need an EIN (Employer Identification Number) before applying?
What's the difference between for-hire and private carrier authority?
Can I add authority types later if my business needs change?
Do I need a physical business address, or can I use a PO Box?
State-Specific Requirements:
Which states require additional permits beyond federal authority?
Do I need separate authority for each state I plan to operate in?
What's the difference between interstate and intrastate authority?
How do I determine if I need both federal and state authority?
Insurance and Bonding:
When exactly do I need to file my insurance with FMCSA?
What happens if my insurance lapses after getting authority?
Do I need a surety bond, and for what amount?
Can I change insurance companies after filing my authority?
Operational Compliance:
What records must I maintain once I have authority?
How soon after getting authority will I be audited?
What happens if I fail my New Entrant Safety Audit?
Can I operate with drivers who aren't employees (owner operators leased to me)?
Common Pitfalls:
What are the most common reasons applications get delayed or rejected?
What happens if I operate without proper authority?
Can I transfer my authority if I sell my business?