How to Get Your Trucking Authority and Be Your Own Boss

Obtaining Your Motor Carrier Authority

Nothing beats becoming your own boss—this is especially true within the trucking industry.

As a truck driver, you have an inside look at one of the American economy’s most important industries. With that inside look, you have no doubt noticed the massive shortage of truck drivers in the U.S.—and you are ready to capitalize on the high demand for truck drivers and start your own small trucking company/owner-operator business.

So how do you go about starting your own trucking business? One of the first steps in the process is getting all of the paperwork and certification completed—and that starts with attaining your MC (motor carrier) number.

What is a Trucking Operating Authority?

Put simply, a trucking authority is government-granted permission to transport cargo in exchange for payment.

A trucking authority is a colloquial term for an interstate operating authority (or motor carrier [MC] number) and a Department of Transportation (DOT) number. The Federal Motor Carrier Safety Administration (FMCSA) requires that trucking companies attain a trucking authority if they:

1. “transport passengers in interstate commerce (for a fee or other compensation, whether direct or indirect); or
2. transport federally-regulated commodities owned by others or arrange for their transport, (for a fee or other compensation, in interstate commerce).”

According to the FMCSA website, an FMCSA operating authority is known as an MC, FF or MX number, depending on the type of authority is granted to the carrier. Some companies will require multiple types of authorities if they specialize in certain types of cargo.

How to Get Your Own Trucking Authority

The FMCSA outlines a four-step process for acquiring an operating authority:

Updates on Obtaining a Trucking Authority in 2024

The trucking industry is about to undergo significant changes, particularly in the way carriers will secure their operating authority. The Federal Motor Carrier Safety Administration (FMCSA) has announced upcoming modifications, which include the introduction of a novel registration process. This means that the traditional motor carrier (MC) number, a cornerstone of registering a trucking business, is expected to be phased out.

What Does This Mean for Aspiring Trucking Businesses?

• Operating Authority is Still Required: Despite the anticipated changes, obtaining an operating authority remains essential in 2024. Trucking businesses must continue to secure this authorization to legally operate.
• Gradual Transition: The complete removal of the MC number is slated for 2025. Until then, businesses should stay informed about the transition timelines and prepare for adjustments in registration procedures.
• Stay Informed: Keep an eye on updates from the FMCSA as they release more details about the new registration system. Being proactive will ensure you meet all the necessary requirements without any disruptions.

These updates highlight a pivotal shift in how trucking businesses will establish themselves, emphasizing the need to adapt and stay ahead in a changing regulatory landscape.

What Are the Types of Trucking Authority Licenses?

There are several different types of “authorities” for which budding trucking companies are eligible. The varying types of permits are completely dependent upon the type of freight that your company is going to haul.

Read the following section carefully— there are a lot of different types of authorities that a transportation industry entrepreneur may have to obtain:

• Motor Common Carrier of Property (except Household Goods)—this status gives truckers authorization to become for-hire motor carriers of U.S. government-regulated commodities (except household goods) for the public. Said carriers must file proof of both public liability and cargo insurance to gain authorization.
• Motor Contract Carrier of Property (except Household Goods)—this status authorizes truckers to transport regulated commodities (besides household goods) for specific customers based on payments specified in negotiated contracts. Said carriers must file proof of liability insurance. Cargo insurance is not necessary in this case. *Note: If you want to also transport non-household goods on a for-hire basis, you will need to obtain both licenses, thus you will to also verify cargo insurance in order to qualify.
• Motor Common Carrier of Household Goods—to register as a motor carrier of household goods, you must provide proof of public liability and cargo insurance with the FMCSA.
• Motor Contract Carrier of Household Goods—this status requires proof of public liability insurance.
• Broker of Property (except Household Goods)—this status can be given to an individual, partnership or corporation that gets paid to arrange the transportation of other people’s property.
  *Note: A broker never is responsible for the client’s property, as it is never in his/her possession.
• Broker of Household Goods—this grants permission to arrange transport of people’s home/private possessions. Again, as a broker, no responsibility of the freight is undertaken.
• U.S.-based Enterprise Carrier of International Cargo (except Household Goods)—this status is for companies that transport international cargo and are based in the United States but are owned/run by a Mexican citizen or foreign national. These carriers are neither “common” nor “contract.”
• U.S.-based Enterprise Carrier of International Household Goods—carriers that wish to haul household goods across international borders must attain this status.

Depending on what type of goods your trucking company will haul, you will most likely need a combination of these certifications.

What is an OP-1?

As you navigate the FMCSA website and subsequent application process, you will see a great deal of talk surrounding the “Form OP-1.”

The OP-1 Form is the federal document that you must complete in your trucking authority application. There are three varieties of OP-1 Forms:

• OP-1—this is the standard form, and aspiring trucking company owners must fill it out if they are seeking status as a Motor Common Carrier of Property (except Household Goods), a Motor Contract Carrier of Property (except Household Goods), a Motor Common Carrier of Household Goods, a Motor Contract Carrier of Household Goods, a Broker of Property (except Household Goods), a Broker of Household Goods, a U.S.-based Enterprise Carrier of International Cargo (except Household Goods) and/or a U.S.-based Enterprise Carrier of International Household Goods.
• OP-1(P)—this is the form you must fill out if you want to be a certified Motor Common Carrier of Passengers and/or a Motor Contract Carrier of Passengers.
• OP-1(FF)—this form is for applications to become a Freight Forwarder of Property (except Household Goods) and/or a Freight Forwarder of Household Goods.

Each type of form is divided into eight sections:

Section I: Applicant Information—

The first section of each of the OP-1 Forms is dedicated to applicant information. It will ask you about your previous history with FMCSA authorities, your legal business name, your business address, your USDOT Number and your business structure.

Section II: Type of Operating Authority—

Next, you will have to check all of the aforementioned types of authority that you wish to obtain. Note that for each type of authority you wish to obtain, there is a $300 application fee. So, for instance, if you want to be both a Motor Common Carrier of Property of Household and non-Household Goods, you would have to pay a total of $600 in application fees ($300 for each classification).

Section III: Insurance Information—

this section is only for applicants that intend to operate commercial vehicles. As an owner-operator, this applies to you. You will need to outline your bodily injury and property damage (BI & PD liability) insurance plans, based around the gross vehicle weight rating (GVWR) and the classification of the cargo that you’ll be hauling.

Section IV: Safety Certification—

this portion is also only intended for commercial vehicle operators. If your GVWR is under 10,000 lbs. and you will not be transporting hazardous materials, you are exempt from Federal Motor Carrier Safety Regulations.

Section V: Affiliations—

if you have had any relationship within the past three years with a business licensed by the FMCSA, ICC, FHWA or OMCS, you are required to fill out this portion of the form.

Section VI: Household Goods Certifications—

this is a special section for companies applying for authorities to transport Household Goods.

Section VII: Scope of Operating Authority—

only to be completed by companies obtaining an operating authority as a Motor Contract Carrier of Household Goods.

Section VIII: Applicant’s Oath—

Filling out the OP-1 Form takes time and attention to detail, and it is the first of four steps in the application process. More information on the OP-1 Form can be found on the FMCSA website.

Starting Your Trucking Company

The key to getting an MC number is proper planning and a studious attitude to the paperwork. All of the forms and classifications can seem confusing at first, but if you sit down and work diligently for a while, you will be able to fill out the application with ease and get on your way.

Obtaining an operating authority is one of the first steps to becoming a successful owner-operator. After you get your business up and running, the next step is finding loads to haul and maintaining healthy cash flow—and that is no easy task. Are you looking for a debt-free solution to your cash flow problems? If so, give us a call. We specialize in financing new owner-operators and small trucking companies at any stage of development. Freight bill factoring companies provide the funding your trucking company needs to expand cash flow.

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