Having your own Authority?
 

I've seen this term used a few times and curious as to what it actually means and what is involved to get it. Based on what I've read, it appears to be something along the lines of an O/O being a broker(?) for freight.

Just looking to increase my knowledge of the trucking industry...I tried searching here for it and only found threads that used the word 'authority' and not a definition.
Thanks

Having your own authority as an owner operator basically just means you go find your own loads, as opposed to owning your truck and "leasing on" with a carrier who finds your loads and keeps you moving.

When you run your own authority, you run where and when you want. If you are leased on with someone, they will expect you to take loads for the most part when and where they want you to go.

Each way has its advantages......... 8)

BA, for a trucking company or carrier wants to haul freight they need to have motor carrier authority. There are some basic requirements, but the main requirement is having the minimum amounts of liability and cargo insurance coverage. You MUST have the authority to operate as a motor carrier. There are two types of motor carrier authority. Interstate and intrastate. The Federal Government issues interstate authority. If you haul freight across states lines you must have Federal motor carrier authority. There are only a few states which require intrastate motor carrier authority for hauling freight within their state. Intrastate authority is for picking up and delivering in the same state. You are not required to have intrastate authority to pick up in one state and deliver in another. You will need interstate authority.

To get interstate authority you must fill out an application with the Feds. It costs $300. You apply and they advertise that you want authority. If no one objects then authority is issued provided you have everything in place. You must have minimum amounts of insurance coverage on file with them and registered agents in every state in which you plan on doing business. The registered agents are in case you are sued or need to be served legal papers in a state in which you are doing business. It sounds more complicated than it really is.

There are two types of motor carrier authority. Common and contract. I think most opt for common authority. The Feds no longer make a distinction between the two types of authority. I am surprised they have not done away with the contract authority since so few people use it any more. Some types of carriers may have different requirements, such as household goods. I won't get into that right now.

So if your an O/O, is either an authority or company lease your only options to haul comercial freight?

[quote="GMAN"] You must have minimum amounts of insurance coverage on file with them and registered agents in every state in which you plan on doing business. The registered agents are in case you are sued or need to be served legal papers in a state in which you are doing business. It sounds more complicated than it really is.
quote]

Thanks for the great explanation GMAN, I didn't see it before I made my last reply. So the bottom line just being adequately insured for the cargo and liability. If you lease with a company, do you still have to get the cargo insured, or do they supply it?

Having an agent in all 48 does sound complicated :? I take it the insurance for the trucking industry is set up to accommodate that?

USDOT
BOC 3 Process Agents
Insurance Liability, Cargo and bobtail
SSRS
IRP
IFTA
Intrastate authority for some states
New Entrant Safety Audit Kit
HUT,KyUT Oregon and New Mexico fuel permits

What else?

You only need liability and cargo insurance if you run your own authority. When you have your authority you are considered a carrier even if you only have one truck. If you lease to a carrier as an owner operator, the carrier provides the liability and cargo insurance. You will normally be required to have bobtail or unladen liability insurance when you lease to a carrier. The minimum amounts of coverage to qualify for common Federal Motor Carrier authority is $750,000 in liability and $5,000 in cargo. Most shippers and/or brokers require $100,000 in cargo. Minimum coverage amounts could vary according to the type of operation you run. If you are in a specialty area of the business or set up to haul hazmat you could be required to carry more insurance than listed. I carry more than the minimum requirements, but it is not necessary for most loads.

If you are a member of OOIDA, they can do the registered agent filing for you at no charge. There are services which charge a fee. I have heard of some as little as $35, but I can't see paying someone for something which you can get for free as a member.

You forgot the important thing.....Motor Carrier Authority (MC #). And you don't need bobtail insurance unless you lease to a carrier. If you run your authority you don't need bobtail.

Yes, you right about MC#. I just forget wright this first thing. But I don't understand this part - when I will do application for MC authority I must provide insurance information. But I can't buy and drive the truck BEFORE I get authority. How I can get insurance without truck?

You don't need a truck to get your motor carrier authority, but most insurance companies require you to have a truck to write the insurance. You cannot get the authority without insurance. The insurance company usually writes the liability and cargo on a specific truck and/or trailer. By the way, if you plan on running your own authority, you should also plan on buying a trailer. You will probably need to purchase collision insurance on your equipment. Most charge 2-4% of the stated value of the equipment. You don't need collision insurance to obtain motor carrier authority, only liability and cargo.