Step by Step getting one's own authority
 

Ok I turned in my company truck yesterday and am ready to get rolling. It will probably take me a few weeks to get truck, insurance etc but I'm going to start now trying to get own authority now. There are many posts here with the steps but they are a bit spread out and it everytime you hit the back button it has to be refreshed after doing a search so I am going to do this one post which I will continue editing. Also to be honest a lot of these threads go off topic, with good information too, but it makes it hard to stay on topic.

As I'm not working, I have time to do this myself. I really Know nothing about doing this except from what I've read here. I have already went on the FMCSA website, but I think I'm going to set up a LLC and put it in that name. Tonight I am going to come up with a name and file. I live in Florida so everything can be done online pretty instantaneously. (www.sunbiz.org).

So steps to getting my own own authority:

1) Register with the FMCSA to get my USDOT #
The website to do this is: http://www.fmcsa.dot.gov/registratio...escription.htm

USDOT number given immediately (Free).

Mc# applicaton (form OP-1) completed 05/26/2007 - $300. Response given:

You have completed the OP-1 application. Notice of the application will be published in the FMCSA Register.

You may begin operations only after the certificate, permit or license has been issued following your compliance with the requirements shown below:
Insurance (liability: Form BMC-91 or BMC-91X; and cargo: Form BMC-34) (49 CFR 387) Done. Paid my Insurance premium and they sent in the required form to FMCSA 06/26/2007
Insurance (surety bond: Form BMC-84 or trust fund: Form BMC-85) (49 CFR 387) Done. Paid my Insurance premium and they sent in the required form to FMCSA 06/26/2007
Designation of agents upon processes may be served (Form BOC-3) (49 CFR 366) Done. OOIDA files this for free for members


If the applicant fails to comply within 20 days of the date of publication in the FMCSA Register, a decision will be served notifying the applicant that the application will be dismissed for want of prosecution unless the applicant complies with the requirements within 60 days.

Within 24 to 48 hours after filing your application you can visit our website at FMCSA to see the status of your application.

If you have any questions about the OP-1 application process and the issuance of operating authority, please call the FMCSA Licensing Team at 202-366-9805

2) Received letter (6/12/07) from FMCSA stating that I need to call them to complete the registration process. Basically they just went over my info and asked if I would be hauling OTR and the weight of truck. As I said yes to that they said that within I believe 6 months I would be contacted by FMCSA to set up a safety audit. There would be no fines given or anything like that, they said it is a free service they provide to show me how to keep things in order.

3) Went to the local IRS office (06/27/07) and submitted tax form 2290 (Heavy Highway Vehicle Use Tax Return). Cost was $550 which is for July of 2007 to July of 2008. It was very simple to fill out and the IRS workers were very helpful. This needs to be done to get your plate. A link to the form is here: http://www.irs.gov/pub/irs-pdf/f2290.pdf

4)Went to a service to take care of most of the permits. I've done most of this myself, but I had a lot to do this week so I paid a service to do the rest. It was as follows:

a) IFTA sticker (I paid to get this overnight and got it the next day.)
b) KYU permit
c) NY Hut sticker
d) NM tax ID
e) IRP which I guess is the plate.

5) Received call (06/28/07) with automated message informing me that MC authority has been approved for this Monday (07/02/07) and will receive the certificate I think they said a week to 10 days later. This approval was quicker than anticipated as I only submitted my insurance 2 days ago.

6) Received Certificate of Authority (7/09/07)

7) Received paperwork back for the IRP. Need to send in certified funds for the amount of $1450.00. I took it to a service so they could send it out overnight and get it back in a day instead of waiting 10-12 days for it.



Side steps that I will be taking

1) Bought a health insurance policy today as I will be losing the company policy. Good coverage for almost what I was paying with the company.

2) Joined OOIDA

3) Set up LLC online. Here is the link to do it in Florida http://www.sunbiz.org/ This really isn't necessary for everyone but I wanted everything in business name.)

4) Opened a business account

5) Sent in application for PrePass http://prepass.com/index.htm

6) Had lettering on truck placed

Steve, GMAN, and Rev have good information, regarding own authority. Also, there is a thread on obtaining own authority in this forum, which Steve began. :) Good information. 8)

Does Steve have a thread strictly for obtaining the authority? I know his first thread had a lot of good info, the Desk to own authority, but there was a lot of side stuff going on which I didn't like sorting through.

I certainly do not pretend to be the first to do this, I'd just like to have a very clear list of what I'm doing, looking for some good advice and maybe when I'm done it will be a clear resource. When I mean clear, I will be buying a truck, insurance etc but I will not put any of that here in this thread. This will be strictly about setting up own authority and things that one might need to go with it, hence the health insurance. I like things in lists. Anyway as always thanks to all for any and all comments.

Yeah, there is a lot of bull being shot in those threads, but there is also good information threads throughout this forum.

Should I set up for Hazmat as well? If it's not too much more money, I figure it would open me up for more loads. However I only hauled it, it might not be worth it if there is much more paperwork on the company side.

Merrick, getting your authority isn't all that complicated. You can go on line and fill out the application. It will cost you $300 to do it yourself. That is for the one time filing fee. Before authority will be given you will need to have cargo and liability insurance. Most brokers will require $1MM liability and $100,000 cargo. You will also need registered agents in every state in which you do business. OOIDA will do this for you at no charge if you are a member. It usually takes a few weeks from the time you do the paperwork, to get everything back. Before you will be allowed to get your base plates and IFTA you will need a copy of your authority. You will also need a DOT number. There is no charge for the DOT number. Although I would not start paying premiums before being issued my MC number, you should have it in place where all you need to do is pay the premium. Most insurance companies who write motor carrier insurance require you to have a truck in order to write the policy. They usually note the truck on your policy.

Once you purchase a truck you will need to pay your 2290 (heavy highway use tax) before you can get your base plates. It costs $550/yr. Some states require you to prove residency. They may also require you to have a telephone number listed in the company name.

Those are the basics. You can do everything yourself or hire someone to do it for you. I did everything myself.

Sooo....it's truck before ins and and ins before MC#?
Lotsa money up front.

That is about it, rank.

Thanks as always GMAN. But I should be filing for the authority now no? That's what I gathered from the other posts. Like I said I'm going to look at trucks tomorrow, but that doesn't mean I will be getting it tomorrow. One thing I'm worried about is that I believe you said earlier that you pay for the authority and they post it some where then ask you for insurance. Do you know what time frame they give you to give them the insurance? I'm just worried that by the time they are ready I haven't found a truck yet.

When I do pay for the authority I will update the first post so the timeframe that all this takes place will be there for all to see.

For clarification purposes. The MC# is the same as your authority...?

I will more than likely print this thread and keep it in a safe place. Steve has become somewhat an idol of mine. I would love to do exactly what he's doing one day. For now the finances aren't there, but that could possibly change soon.

Thanks, Arky

Yep. USDOT# doesn't make you a Motor Carrier. Only the MC# will do that.

Don't worry about hazmat...you won't be able to afford it.

Well that doesn't make sense. you said yes that it's the same but that MC# is the only one that makes you a motor carrier.

I think I'm doing something wrong, I just go this message during registration:

You have just completed the MCS-150/150A registration process to receive your USDOT number. Based on your answers to the questions asked at the beginning of this process the system determined that you also need operating authority (MC, MX, FF number).

Please remember each type of authority costs $300 which is NON-REFUNDABLE!


This would mean a total of $600 not $300 so what am I doing wrong?

You don't have to pay anything to get your USDOT#. You only pay for the MC#. The DOT# is simply an identifier and doesn't correspond to anything other than your company's info. The MC# corresponds to the permit which gives you your actual authority.

Here is the definition of the two USDOT# and MC# for those of us new:

Operating Authority (MC/FF/MX Number): definition

The operating authority (MC/FF/MX number) is assigned to interstate for-hire motor carriers and brokers that apply for operating authority.
These numbers are also referred to as docket numbers.

The FF number is assigned to freight forwarders; the MX number is assigned to carriers domiciled in Mexico; and the MC number is for all other carriers and brokers



The USDOT number is the number that the FMCSA assigns to each motor carrier that starts interstate operations.
Your USDOT number must be marked on all of your vehicles.

To apply for a USDOT number, please submit a Form MCS-150

It's asking how many driver will be subject to FMCSA regulations, obviously I'll be starting with one, but I do have a partner that I plan on working with in the future possibly. Do you guys just put a few so you don't have to keep changing or updating it? Or is that really a nonissue?

So is it Motor common carrier or Motor contract carrier? By the way I was given a USDOT# already. That was easy.

The new URS, whenever it comes out, does away with the dual authorities. As it stands, you will be doing virtually all of your work as a contract carrier, might as well register as such.

You only put the number of drivers you have at the time you apply. You will be required to update your MCS150 information every two years. My state requires that I update each year.

A motor carrier must have either contract or common authority. You don't necessarily need both. The Feds don't distinguish between the two any more. I have common authority. Most people have common.

I don't think you will want to get hazmat starting out. They have lowered the cost for the permit or authority for hazmat. I believe it costs $500. The big expense comes in when you get insurance. Hazmat insurance is rather expensive. It can also be difficult to get an insurance company to write hazmat coverage. I haven't seen rate high enough to warrant the extra cost. You don't want to make things too complicated starting out. If you seen you want to haul hazmat you can always add that later.

Removed

Thanks GMAN and no worries. I got nervous there because I put it as common carrier as that was the one that requires cargo insurance, so when I first read no-worries to do contract, I thought, "great first screw up to cost me $300.

Here's the definitions I went off of:


Common carrier' provides for-hire truck transportation to the general public. Common carriers must file both liability (BI & PD) insurance and cargo insurance.

Contract carrier' provides for-hire truck transportation to specific, individual shippers, based on contracts. Contract carriers must file only liability (BI & PD) insurance


I tell you I'm enjoying this. I updated the original post as I will continue to do so throughout the process.

Well I don't have a truck yet, but will have one soon but have now applied for MC#. I did this based off previous posts that this needs to be done ahead of time. I don't want to get truck say in 2 weeks and be ready to roll to make money and have to wait more time for authority.

Yes, I didn't realize you were going to keep the original post updated. It is probably better for me to just get rid of my post to keep from causing confusion.

But...it was my understanding that you would have to show insurance before you could get your mc#? Your saying that you've already got that too?

It would probably be best to file for your authority first. Since it takes several weeks to get the final paperwork back, this is the longest process and it is something you must have before you can do anything else. You could purchase a truck first but won't be able to drive it on the street until you have your authority, base plates and insurance. When you apply for your motor carrier authority, you will be issued a docket number. The docket number is also your motor carrier number, if memory serves. At least that is the way it was when I got my authority. The reason it usually takes a few weeks is that they must advertise that you have applied for authority and give anyone who wants to contest your getting authority to do so. At one time, your competitors could actually prevent you from obtaining authority. Now, pretty much any one who applies can get their authority. If you don't have your insurance before authority is issued, you will receive a letter giving you a certain amount of time to send proof of insurance or your authority will be void. At least that is the way it was when I got my authority.

As GMAN said, it really doesn't matter whether you do common or contract. Even though the Feds don't require contract carriers to carry cargo insurance everyone you haul for will. Common carriage is a remnant of days gone by where freight was hauled without a contract. Carriers posted a schedule of their rates and tariffs and worked off of that. Anymore, virtually all freight is moved under contract and you are essentially a contract carrier regardless of which authority you actually possess. You'll notice when you start signing contracts that most of them stipulate that you are providing service as a contract carrier. Again, it makes not difference which authority you have.

This is definitely an informative thread. Merrick, I hope follow through with your original post once you have all the pieces put together.

Gman, what other things will be involved once he has his authority? Isn't it required that he will have to join a random drug test agency of some kind? Any other things that have to be dealt with?

Thanks guys,

Arky

I'm definitely going to keep updating it. There was a whole list of things, drug plan, hiring plan, safety, I don't know there was a whole list of things that the system stated was required. I know somebody that does this compliance stuff as a side business, so I am going to have him set me up with a system. I will detail it as I go along in the original post.

You don't need a hiring plan or safety program. Just call your local hospital and put your name into the random drug testing consortium. Nothing to it.

new authority
 

Just finished getting new authority. Some tips. When you applied for your authority, you had to pay the $300.00 right away. After they publish it in the register it will be 20 days before it will be granted. You can start now filing your insurance. My insurance co would not file with FMCSA till premium was paid. If you join OOIDA, they will file your BOC-3 for free, they are a great help on information. If you have your insurance and BOC-3 filing done at the 20 days your authority will be active but you cannot operate until you receive your certificate. OOIDA can obtain a copy for $20.00, otherwise it will be about a 2 or 3 week wait for your certificate to be mailed to you. As a carrier you must have your IFTA in place to operate interstate. If you have your own plates, you can carry your certificate of authority to most state motor carrier office and they will issue your IFTA the same day, but they will not issue your IFTA without a copy of your authority. Start to finish getting authority and truck to work was 22 days.
Your authority is actually temporary for 18 months. They say you must pass a DOT audit to get permenate authority but most O/O I know have never been audited. They must be to busy for a 1 man operation.
Now that you are a motor carrier you must comply with FMCSA regulations as a motor carrier. OOIDA can supply you a checklist of information to comply with being a motor carrier.
Setting up your operation as a motor carrier is not that difficult, but does require a lot of paperwork and orginization. The people at OOIDA are a great help. Setting up a drug program, vehicle inspections, personnel files, driver qualification files, etc is just part of being a motor carrier.

The above is all the easy part of getting your own authority and being a motor carrier. The next part is the toughest part. GOOD WORK FOR YOUR TRUCK. I have saved information of everone I have hauled for 10 years. It will be very tough to get good freight unless you have good contacts. Not to be discouraging but if you don't have contacts forget your authority and lease on to someone until you establish some good contacts. Loads boards are ok when everyone is busy but you will die a slow death when freight is slow.

You will need to join a random drug consortium. Most charge from $100-150 per year for each driver. You also need to have a 10 year work history on file, even if you are the only driver. Some truck stops have a driver qualifications packet you can buy. It should list what you need for each driver. You should also be able to obtain those from J.J. Keller. Keep in mind that even if you are the only driver you still need to comply with all rules and regulations as if you were an employee. You should also have an annual vehicle inspection done on your equipment.

You want to make sure and keep your records current. The Feds are trying to audit all new carriers within the first 18 months of operation. My niece and her husband were audited during the first 6 months after they obtained their authority.

Hey Steve, did you end up getting the pass for the scales? I thought I remember you said you did, but somebody mentioned that that will just invite more audits. From having it as a company driver it sure will be nice to have.

I wish others could edit my original post. I'm just writing this all down as I go along, but obviously many, if not most of you could probably detail this better as you have already done it. I don't know if any of you frequent the Fatwallet finance forums (here http://www.fatwallet.com/c/52/ )but I like how they have it set up for the major topics. I believe that many users can edit the Quick summary and the information there is a bit more orderly. There is so much information on this board, really the best resource I've found so far (GMAN is a one man transportation encyclopedia by himself) , but it's a bit scattered.

Merrick, just keep updating as you go along. When you get everything done, if you want it rearranged, I would be happy to help or you could ask whomever you prefer. You could easily copy and paste directly into your original post.

What your saying is exactly true. There is a lot of good info here on CAD, but when it comes to getting your own authority, it is a little scattered. This thread stands a chance of clearing up the smoke a little and in turn could be a lot of help to a lot of people over a period of time.

Arky

Yes, I got the PrePass and blow by 99% of the scales. I pulled into the scales in South Dakota to take a coffee break and went inside and talked go the inspectors. They said just as long as your retain at least a 70% safety rating you will get the green light.

He also mentioned something I didn't think about. Go past the 14 rule and you will get a red light and a reg flag will go up on our computer. They are not allowed to calculate if it was impossible to drive a certain amount and pull you in for an audit. Same as toll booths. They are not allowed to penalize you for going from point A to B in light speed.

hmmm how does that safety rating work?...I mean what are the factors used to calculate it?

Tickets.

Pulled into scale because they don't have PrePass and found to have problems

Accident

Pepe, when you start out, you don't have a safety rating. If you are inspected, you are given a rating based upon whether you passed the inspection or not. If you passes, you will likely be given a good safety rating. If not, you could be given a poor safety rating. The more good inspections you get the better. Accidents and moving violations can also impact your rating. You can check your rating by going on the Federal website. If you have a few failed inspections, you are likely to start getting pulled in to be inspected. That is why you see so many pulled in from certain carriers. It is their safety rating.

I'll try and remember what the PrePass girl told me. Each company is assigned a pass rate which is determined by your safety rating. PrePass has 3 different rates; 5%, either 15% or 20% I can't remember, and 50%. These correspond to the odds that you will be pulled in to a scale. If you're in the top category you have a 5% chance of being pulled into each scale. You don't get a safety rating until you've had 3 inspections. Until that time, PrePass assigns you to the middle tier. I don't remember what the cut-offs were for the different levels. Obviously you don't want to fail inspections anyway so it doesn't matter.

Steve, I think the inspector was blowing smoke. There's no way they can track your 14-hour rule via PrePass. If there was, I'd be pulled in all the time...team.

Hmmm then its best if I go to the scales myself that are close (cajone) after I know everything is in order, and request an inspection?

JOB
 

Sounds like you are doing ok, I am actually on the other end of the owner operator ladder, I am a carrier who had an owner operator decide after 4 weeks that he didn't like his lease, so he left. Now I have my plate, cab card and insurance, but the insurance is threatening to cancel because I don't have a truck. I'm in Miami, FL can someone help me???

Re: JOB
 

I suggest you start your own new thread with you question.