Cost of Authority
 

Well I was going to make this a private e-mail to Steve or one of the moderators, but what the hell.....thought I would open it up to you all and let you beat the hell outta me if I have been an idiot!
This is the deal, got my truck, and insurance, ....still need to buy a trailer and get my authority, problem is I have ony 26K at my disposal right now, do you guys think I have enough $ or better just chicken-out n go lease on to someone, well I want my own authority and gig, but 3 month wait "ouch" and so tempting to just pull in somewhere n lease on.
I have 10k more still owed to me somewhere, n I will eventually get it, but when is the problem. In Little Rock right now but probably heading over to Oklahoma City to look at trailers very soon.

I don't know squat about owning a truck.
But I spent 40 years in business, and I'm telling you that whatever you do will be the result of your own effort.
Do what your heart tells you to do. Make the decision right. Leave those who only want to make the "right decision" in the dust.

How much expirience do you have?

It doesn't take 3 months. Dot# instantly, MC# within 48 hours, authority certificate 7-10 days after they receive insurance filing. That's the time-frame you're looking at as far as the Feds go, assuming you do everything in the most expedited fashion. Getting your IFTA is often the slowest part of the process. If you've got all your ducks in a row, you're not looking at more than 3 weeks or so.

You have enough money for sure. Your authority will take about 30 days or so and that gives you plenty of time to get yourself and the truck squared away and find a trailer. When I started out it cost me about $8,000 before the checks started coming in. That money was for fuel, bills and a bunch of other stuff I wanted. I'm sure it could have been done for much less.

Thks Steve, just started to panick when I saw G-man mention it could take up to 3 months before $ coming in and wondered if I am shaving it a little to close....hmmm have about 26K left to budget and stll need some things, for sure trl about 9k, hmmm the $ for authority itself I budgeted about 3 k, leaves about 14 k left to work on, plus out of that at least 2k for insurance payments next couple of months.

Get the ball rolling on your authority. Sign up with one of those services now and bit the bullet and get it rolling!!!! My checks from customers come in on a regular basis no more than 30 days after delivering the load and some come in within 20 days.

Sign up today with WWW.DOTAUTHORITY.COM or any of the other ones and put that behind you. You have a lot more to do with IRP, 2290, inspection stickers, lettering for the truck and other stuff. The most important thing is to get the authority rolling NOW. Sure you can save maybe $300 or so doing it yourself but I don't think it's worth it for you to drag your heels at the moment.

Steve is absolutely right.
you are wasting a lot of time
From the bus trip (I still can't get over that) on
(busnessmen fly)

Just some food for thought
You got a good price for the truck but you are just sitting on an expensive piece of real estate.
You paid cash for it which is nice but...
If you pay cash for your trailer and the other expenses
You are an just a major repair away from having no money
(lots of things break on used trucks)
You will eat up $4,000-5,000 in fuel in a month.
Having your own authority is 100% problems
The ones who make money are able to somehow solve a lot of problems at once.
as an arm chair quarter back
you should have gotten your authority first
then got familiar with the load boards,customers etc
then bought a decent truck with a good mechanic at your side
Its nice to pay cash at an auction but putting all of it in a truck ....
You have to feel a little sick to glance at your bank account
and then look at the bucket of bolts you bought.
And you are no where near getting a first load.
You are bleeding.


Trust me the $$$$ is not going to be rolling in with your own authority
With your inexperience
(You actually considered buying a Sterling?)
I would definately lease on with someone.
Here you can take your time to find the right company.
They pay the cargo, maybe plates, do the fuel tax and keep you busy every day.

The 3 months is for you to get your authority back with all the proper paperwork, pay your 2290, get the IFTA, base-plates, find, book, haul, bill and collect on your first loads, etc., You will need to have your motor carrier authority before you can do any of the other things, such as getting your base plates, IFTA, etc., Once you have your insurance and authority you can walk your base-plates and get your IFTA set up the same day, if you want to go to the appropriate offices. One reason it takes some time to get your authority is that there is a waiting period for them to advertise that you want your authority. When I originally applied it took about 6 weeks from the time I applied until I got my authority back. Steve is correct, you should apply for authority NOW, if that is what you want to do. If you are nervous about getting into this on your own, there are plenty of carriers who will lease you on with experience. OOIDA will assist you in getting your authority, if you don't want to do it yourself. There are also a number of services who will do it for you for a fee. I believe it took me about 2 months to get my permit from New Mexico. You can still travel through New Mexico, but will need to stop at their port of entry and get trip permits each time you enter the state unless you have one of their state permits. It takes time and lot of effort to jump through all the hoops to get your authority and get up and running. I am sorry if I upset you concerning the time frame, but I prefer being realistic in my expectations. If things run smoothly, you may be able to get money in sooner, but I would prefer to expect a longer time frame and be pleasantly surprised if I got money in sooner. Some brokers offer quick pay for a discount on the bill. Those could pay you in 1-7 days from the time that they receive the bills. Unless you opt for quick pay, I would expect payment to be made in about 30 days from when they receive your bills. Some will wait for about 45 days. Not to scare you, but you should look at this realistically. If you check out brokers or shippers prior to taking a load and clear up their billing and paying policy, you can plan better. When I first got my authority, I already had a few shippers set up so that I could start hauling immediately. Some of them were COD. For the type of freight you are planning on hauling, COD is probably not as likely. That has also been several years ago.

Your order of operations sounds like good advice but I am still questioning about leasing on with someone. That is, assuming he can somehow make it through until the first checks show up. Thanks for posting that one.

Well Sonnies opinions make sense....except the part about getting your own authority first before you bought the truck. That ISNT feasable. I am filling out the papperwork as we speak, I MUST have my insurance FIRST....so how could I have insurance without owning a truck (dont know how)????? Would love to know how that could be done?
As far as taking a bus (this one had an issue with too).......well I am 100% cheapskate, and NO expenses while waiting around (freght is slow now") and I would have slept on the SIDEWALK if they would let me (without rousting me!"they kicked my sorry ass outta the bus terminal when I got to Charloette) if I could have saved a buck. If I have to drive up to Sacramento to camp on Arnies doorstep to get the rest of my authority I am gona sleep in my hatchback n screw paying 40 bucks a night for a motel! ;-p
(Sacs about a 7 hour drive or so from me)

then how does an a "all owner operator" co get insurance?
They own no equipment

Dunno...how do they? What I said was "I" dont know how to get insurance without a truck....my broker was insistant I buy a truck first and tell her the Vin before she finished writing me a policy...maybe some will...dunno?
Well thinking about it wanted to add maybe this is a broker thing, but wanted to say I HIGHlY recommend Cindy at Westrern Truck Ins for anyone going near the LA area, she worked like hell to get me the best quotes and I had a slight problem for her to negotiate,(no recent Exp)
Maybe certain brokers wont write policies up for you in advance and some will....dunno?....as an individual I could see them hesitant to do that ahead of time cuz they are working for free? dunno?

Sonny's talking about liability and cargo, and Pepe's talking about physical insurance. I think :?:

Hmmm Sid, as I hold my faxed insurance binder in my hand it seems to include all 3 (or I got hosed lol)....hmmm maybe they will only do 2 of the 3 without the truck?

I talked to the same girl that Pepe did for insurance. They need a truck to put the insurance on otherwise they wouldn't know how to quote it. The Authority people need proof of insurance too.

Maybe other states are different, but this is how it seems to be in CA.

The Owner Operator company getting insurance without owning trucks is interesting. I'll ask about that next time I talk to an insurance agent.

Interesting
 

I've read it both ways; get truck first, then insurance, then authority and also get authority, then insurance, then truck. It makes sense to me that you can't insure a truck/driver you don't have yet and also makes sense that you can't get authority without proof of insurance. That said, it doesn't seem like the most economical way of doing things (though maybe the only way possible.) I'm going to ask my contact who started from the ground up, without any experience whatsoever what order he did this and why. I seem to remember him waiting on insurance though. I'll post what I find out for your hashing out.

Re: Interesting
 

Hmmm not sure how they get insurance without a truck....hmmm maybe something to do with a corperation versus private individual? ...dunno...just know for sure; authority, then insurance would NEVER work, as I fill out the forms faxed to me from OOIDA they need my insurance in place already.

You must have cargo and liability insurance before you will be granted motor carrier authority. The smart thing to do is to apply for authority and have your insurance lined up but not pay any premiums until the waiting period has elapsed and the Feds send you a letter telling you to have your insurance do their filings. Otherwise you will be paying premiums for 1-2 months before you will actually have your authority letter in hand and be able to start hauling freight. You will have a specific amount of time to have your insurance filings done. Most insurers will not bind motor carrier coverage without tying it to a specific truck and trailer. The reason being is that you could have several trucks, but only pay premiums on one. That doesn't mean that you need collision insurance with the same company. In fact, I don't even have collision coverage on one truck and trailer since there is no lien on them. If you want to go ahead and pay for your insurance prior to getting notice from the Feds on your authority, then you are free to do so, but it isn't necessary until they notify you. By the way, what did they quote you on premium?

I got my insurance before I bought the truck. I was pretty much told to make up a truck then change it when I bought it. That's what I did on the spot when I bought my truck I'm in now. I called them, gave them the VIN and other info and they faxed a binder to me at the truck dealership.

Woo-woo ....just made it back to California last night. Still have me base plate to pay for, state rgistration and IFTA and quess I am good to go. I didnt have to pay a dime till I got closer to California. New Mex wanted $10 at the scales, and Arizona wanted $130.00 (Gasp n cough) ....afraid what California Nazis would have wanted, so I snuck in while Cajone scales were close under cover off darkness :D and will wait till Monday to go pay it all in one lump sum for eveything......no single trip crap.

Did you get your authority yet? Your not good to go until you get your official authority paper in the mail.

What are you being charged for? I've been to all those states and never had to pay anything?

You will need proof that you have paid your 2290 and that you have your authority before you will be allowed to get your base plate and IFTA. $130 for Arizona? That must have been a fine. Surely they would not have charged that much just for bobtailing across the state.

Hmmm not a fine, they called it a 30 daytemporary plate registration, they issued me another papper plate like the one in my window from N.C.
They didnt seem to give me a choice whether to buy it or not, for me to cross B.T., without my permenant base plate, $130.00....actually (128.00 but she didnt have change :( )

Say G-mn...did you or Steve ever incorporate? Hmmm filling out this Ca IRP junk....sees beeter if I did, but not sure. If so is LLC best?

Am about to get my own authority also and have been doing some
research.
On the FMCSA web site, the place to get your authority on-line, the
instructions for filling out form OP-1, Motor carrier authority, states,
Page #8
"Appropriate insurance forms must be filed within 90 days after the date
the notice of your appplication is published in th FMCSA Register.
Form BMC-91 or BMC-91X for bodily injury and property damage, form BMC-34
for cargo liability, Form BMC-84 for broker surety bond,and Form BMC-85
for broker trust fund agreement.
The FMCSA does not furnish copies of insurance forms. You must contact your
insurance company to arrange for the filing of all required
insurance forms."

Also the section of the OP-1 form which talks about insurance,
it says "Will have....... amount....."
It never says Already have
and it never asks for Binder # or Company Name.
It looks like to me that the FMCSA wants it all from the insurance Co.

This seems more reasonable to me.
Look at Fed Ex. they have the authority but don't own the Trucks,

If I have missed something, please let me know.
I have been reading this thread and because of the time line in the start
up I have decided to get the authority going and MC#, DOT# and KYU#, Ifta etc.
all started now. also BOC-3.
The on-line form is simple.
About 30 questions, all name address etc.
$300 by credit card and I quess its done
Input guys
Input

I have had a corporation for years. The one I use I incorporated in 1988, I believe. I have owned several corporations, the first was about 1971. I prefer a corporate structure. If you incorporate, you may want to file a Sub Chapter S election with the IRS. You could also use the LLC or LLP. Personally I prefer the basic corporation. I like it for the tax benefits as much as the protection it can offer.

You can do it all on line now. You will need your MC# and letter granting you authority before you can get anything else. You are correct about your insurance. Your insurance company should be able to file the appropriate forms in a day or so after you notify them that your authority has been granted. I would not spend the money getting my insurance until you are notified and have a MC#. If you do, you will be paying insurance for a few weeks before you can actually begin conducting business. You will also need signage for your truck.

I would have my insurance lined up before applying for authority. I don't recall how much experience you have, but that is a major factor in who is willing to cover you.

I don't know the exact sequence of events when I got my authority but I was under the impression you need to have your insurance on file before they would issue your authority.

Steve, if memory serves, once your MC# is issued, you will be given a certain amount of time to get your insurance information filed. If you fail to get your insurance filed within the required time frame, you will not be given your authority. Unless things have changed since I first got my authority, you don't need to have your insurance prior to filing for authority.

Yup, your right, I remember now.

Well I did it.
thirty minutes on-line, and $300 later, I had my DOT# and MC#, instantly.
Within two minutes the phone rang and it was an authority co.
offering my my BOC-3 for $50, two minutes later I got an e-mail with my
completed BOC-3.
This puts the authority in the works, will probably take 20 days to get it.
With authority can get KYU, he will charge $50 for that.
Insurance is ready and waiting for me.
NOW ALL I NEED IS A TRUCK.
I have picked several Freightliners and Volvos I like.
Freights are cheaper.
Years 2000 to 2002.
If I get this right, with your own authority the question of age of the unit
does not come into the equation, like leasing on.
Also, am noticing the used market has lots of trucks.
Are the bad times over or should I just jump.
Thanks
Hope this info helps the next rookie.

Are you aware that you can get your own KYU, DOT, etc., FREE if you do it yourself? The only fee which must be paid is $300 for your authority.

As to your other question, if you wait until conditions are exactly right, you will never get into business. There is no question that business has been unusually slow for the last several months. I see some business getting better and although some rates are coming up, over all they are still soft. You can still make a living, you just may need to work a little harder for the same dollars. If you are a good manager you can nearly always make money. You need to adapt to changing market conditions.

Woo-woo...just got my authority approved.

One last hurdle tho before i CAN MAKE $, IFTA, apperently runs longer for California...so waiting another week at least :sad:

Well remains to be seen how well my insurance company works for me with brokers tho, my biggest test for them so far will be if I get a load n how quick they get back to the broker with a certificate of cargo Insurance.

A lot of times the broker will accept a copy of your insurance faxed to them from yourself. They realize that sometimes your dealing with an agent who only works 9 to 5. They just won't send out a check until they get the real certificate faxed to them from the insurance company.

My insurance broker will send a certificate within minutes from the time I call.

Having the Insurance first is a common misconception, get it last. Reasoning: Authority costs $300 (you can afford that), Process Agent $35 (you spend that on dinner) You now have the MC number the only thing left is Insurance which will probably be 2 months payment up front for a rookie probably $3000 (i'm guessing, but I know more than $1800) Now you are legal to put your name and numbers on the door. How about your state requirements?