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.

Stop-stop-stop... If I will buy the truck I can't drive this from dealership to my home without MC authority. Or I can? If I can no more questions about this, but if I can't what should to do? I mean no MC without insurance and no insurance without truck. And no truck without MC :roll:

You can drive it home without having authority. But you cannot haul any loads until you either have authority or lease to a carrier. You will probably be required to have collision insurance on the truck before leaving the dealership, if you finance your purchase. :D

OK, thank you GMAN! You help a lot.

GMAN
No doubt...you answered exactly what I wanted to know. Thanks again for taking the time to do it.

Have a safe and happy holiday season
BA

Heck no. I haul HHG (HouseHold Goods). Some guys pull enclosed car haulers. Some do grain and soybeans. Although there may be different authorities for different kinds of freight, you probably want genral/commercial frieght.

So no authority is required for hauling HHG? or are you saying that just a specific one is required? Seeing how GMAN also mentioned something about HHG, care to explain a little more about it?

I think HHG is its own authority. I know general freight companies can't haul hhg.

I need the Rev and Gman on this one :wink:

I don't recall any difference in authority from hauling HHG and general freight. However, there are additional regulations and disclosures which these carriers must comply. If you are a for hire carrier, you must have motor carrier authority.

HHG does require special authority, that is why in the common authority letter it mentions "....transportation of freight (except household goods) by motor vehicle.

I have another one that reads... to engage in transportation as a common carrier of property (except household goods) by motor vehicle.

LOAD IT, I believe you are thinking about the minimum amounts of cargo coverage required by household carriers. The Feds require $5,000 in cargo insurance for most carriers except household goods which require $10,000 minimum. They also are required to have an arbitration clause in their contract with consumers. I copied a summary specifically concerning household goods transporters from the FMCSRA website.

There is no difference that I could find as far as the authority itself is concerned, only certain regulations specifically for those who transport household goods, such as arbitration and increased insurance requirements. If you want to learn more about household goods specifically you can go to the website and read for yourself.


Part 375: Transportation of Household Goods in Interstate Commerce; Consumer Protection Regulations

Part Regulation Guidance
Subpart A - General Requirements
375.101 Who must follow these regulations?
375.103 What are the definitions of terms used in this part?
375.105 What are the information collection requirements of this part?
Subpart B - Before Offering Services to My Customers
Liability Considerations
375.201 What is my normal liability for loss and damage when I accept goods from an individual shipper?
375.203 What actions of an individual shipper may limit or reduce my normal liability?
General Responsibilities
375.205 May I have agents?
375.207 What items must be in my advertisements?
375.209 How must I handle complaints and inquiries?
375.211 Must I have an arbitration program?
375.213 What information must I provide to a prospective individual shipper?
Collecting Transportation Charges
375.215 How must I collect charges?
375.217 May I collect charges upon delivery?
375.219 May I extend credit to shippers?
375.221 May I use a charge or credit card plan for payments?
Subpart C - Service Options Provided
375.301 What service options may I provide?
375.303 If I sell liability insurance coverage, what must I do?
Subpart D - Estimating Charges
375.401 Must I estimate charges?
375.403 How must I provide a binding estimate?
375.405 How must I provide a non-binding estimate?
375.407 Under what circumstances must I relinquish possession of a collect-on-delivery shipment transported under a non-binding estimate?
375.409 May household goods brokers provide estimates?
Subpart E - Pick Up of Shipments of Household Goods
Before Loading
375.501 Must I write up an order for service?
375.503 Must I write up an inventory?
375.505 Must I write up a bill of lading?
Weighing the Shipment
375.507 Must I determine the weight of a shipment?
375.509 How must I determine the weight of a shipment?
375.511 May I use an alternative method for shipments weighing 3,000 pounds or less?
375.513 Must I give the individual shipper an opportunity to observe the weighing?
375.515 May an individual shipper waive his/her right to observe each weighing?
375.517 May an individual shipper demand re-weighing?
375.519 Must I obtain weight tickets?
375.521 What must I do if an individual shipper wants to know the actual weight or charges for a shipment before I tender delivery?
Subpart F - Transportation of Shipments
375.601 Must I transport the shipment in a timely manner?
375.603 When must I tender a shipment for delivery?
375.605 How must I notify an individual shipper of any service delays?
375.607 What must I do if I am able to tender a shipment for final delivery more than 24 hours before a specified date?
375.609 What must I do for shippers who store household goods in transit?
Subpart G - Delivery of Shipments
375.701 May I provide for a release of liability on my delivery receipt?
375.703 What is the maximum collect-on-delivery amount I may demand at the time of delivery?
375.705 If a shipment is transported on more than one vehicle, what charges may I collect at delivery?
375.707 If a shipment is partially lost or destroyed, what charges may I collect at delivery?
375.709 If a shipment is totally lost or destroyed, what charges may I collect at delivery?
Subpart H - Collection of Charges
375.801 What types of charges apply to subpart H?
375.803 How must I present my freight or expense bill?
375.805 If I am forced to relinquish a collect-on-delivery shipment before the payment of ALL charges, how do I collect the balance?
375.807 What actions may I take to collect the charges upon my freight bill?
Subpart I - Penalties
375.901 What penalties do we impose for violations of this part?
Appendix A to Part 375 Your Rights and Responsibilities When You Move

Those engaged in transportation as common or contract carrier or brokerage of property are not allowed to transport household goods. If you have a certificate of authority, read it. I have 3 and it says pretty much the same on all 3 regarding household goods. Where is it in the regs, I have no idea, never looked for it. But I'm not one to quote the regs or statistics.

I did read my authority and it does exclude household goods. When you apply for authority you need to check off the type of goods you will be hauling. There is a place for household goods, but you can haul property (general freight) as well as household goods if you choose. However, you will need to either apply for it when you first get your authority or can probably amend your authority to include household goods. I can't imagine most carriers wanting to mix the two, but I checked and United Van Lines has authority for property and household goods. So it is possible to have both. You still have either common or contract authority. Having household goods listed is only the type of goods you plan on hauling but has nothing to do with the type of authority. At least I haven't found anything which would tell me differently.

When I talked to a freight guy dropping something off at a United agent, he said he needed special authority for HHG. He had his own authority and has been around for 30 years. He also said he's never made less than $2.12 all miles or he'll retire :)

And LOAD IT, I have seen the same quote about HHG being exempt, and not considered genral freight commodity as you stated. The guy (in above) said the closest he gets to HHG is hauling new furniture places.

New furniture is general/ dry freight. I think I have crossed the line hauling PODS. We have hauled the new PODS containers out of the plant to distributors and have reloaded with full PODS which are ususally HHG shipments. SSSHHHHHH keep that under your hat.