Yes, you will have to get trucking authority for a box truck business from the Federal Motor Carriers Safety Administration (FMCSA) especially if you intend to cross boundaries or to carry goods for delivery purposes.
Also referred to as Operating Authority or Motor Carrier Authority, it is more or less the permission provided by the government to transport goods in exchange for profit and the main body tasked with regulating the trucking industry is the Federal Motor Carriers Safety Administration (FMCSA).
Note that without trucking authority, you are not permitted to cross boundaries or even carry goods for delivery purposes. Also, note that this authority is a mandatory requirement for any transportation over 10,000 GVW that will be looking to cross state lines.
To do this, you will be expected to obtain official clearance from the USDOT. Although required by law, not everyone in the industry has a trucking authority. A good number of companies are leased owner-operators, and it entails that revenues made are shared between the owner and operator.
Obtaining a trucking authority gives you the operational freedom to pick your own loads, arrange and even choose your own routes. Note that this will guarantee a more efficient and income-generating business.
If you are looking to start your trucking company and carry out interstate commerce, you must have an active operating authority. In the long run, it is extremely beneficial both to your pocket and your business aims. The Federal Motor Carrier Safety Administration (FMCSA) will require you to have an active authority in all states to operate in the trucking industry.
Simple Steps to Get Trucking Authority for a Box Truck Business
Have it in mind that getting your own authority is a massive step in your career as it offers you the ability to receive payment for hauling freight as an owner-operator. When seeking to get trucking authority for a box truck, ensure you follow all the right steps, otherwise, the process will take longer. To ensure you do it right, here are steps to consider:
Table of Content
- Register Your Box Truck Business
- Get an EIN
- Get your USDOT Number
- Apply for your MC Number
- File a BOC-3 & get an Insurance Policy
- Pay your HVUT
- Set up your International Registration Plan (IRP) and Get Your Apportioned Plates
- Create an International Fuel Tax Agreement (IFTA) Account
- Complete a Unified Carrier Registration (UCR)
- Enroll in a Drug And Alcohol Consortium
Register Your Box Truck Business
When looking to get a trucking authority for your box truck business, you will be expected to register your business in the state you plan to operate from. In addition, you will need to choose the most suitable business entity that’s if you haven’t already. In the United States, the most common types of entities are sole proprietorships and limited liability companies.
If you are going to operate as a sole-proprietorship with a DBA, you will need to determine if your state requires you to file your DBA at the county or state level. If you are operating as an LLC or Corporation you will need to fill out and submit the correct forms at the Secretary of State’s office.
Get an EIN
If you are an LLC or Corporation, you absolutely must have an EIN issued by the IRS. While it might not be mandatory to have an EIN with a sole proprietorship, it is highly recommended you consider getting one. If you do not get an EIN, you may have to run the business with your social security number, and this could open you up to potential fraud problems.
Get your USDOT Number
Every trucking company in the United States is expected to register with the US Department of Transportation. Simply put, a DOT number is the company’s ID number that makes available all company information, including vehicle type, cargo, safety, and compliance. This information is available for freight brokers and shippers to access if you are hauling loads for them.
You will be issued a PIN along with your USDOT number. Your PIN will be required for any changes you make with the USDOT or FMCSA in the future. Your USDOT number will need to be renewed every two years or anytime any changes are made to your fleet size, name, phone number, address, or cargo type.
Apply for your MC Number
You will need to have an MC number to carry out interstate commerce. You will be expected to file for your authority with the FMCSA. Once you have filed, you obtain your MC number immediately, but don’t expect it to be active yet. You will have 20 days to finish your BOC-3 and get an insurance policy after you file.
Note that once those are filed with the FMCSA, your MC authority will become active within the next 2-3 weeks, and about 2 weeks after that, you will receive your authority certificate in the mail. It is important to note that you cannot legally drive your truck until you’ve filed your BOC-3 and insurance policy and your MC number becomes active.
File a BOC-3 & get an Insurance Policy
Just as it was noted above, you have 20 days to complete this step. Note that the FMCSA expects you to have a designated process agent in every state that can serve legal paperwork on your behalf. You are also expected to have an active insurance policy in place for you to use your truck and ensure that your trucking authority becomes active.
Also note that if make any changes to your name, address, or phone number, you will have to update your BOC-3 and insurance policy to avoid going on an inactive list.
Pay your HVUT
You must pay your HVUT before setting up your IRP. The Heavy Vehicle Use Tax is an annual tax assessed on all heavy vehicles operating on public highways.
Set up your International Registration Plan (IRP) and Get Your Apportioned Plates
IRP is a process of registering fleets of vehicles traveling in two or more member jurisdictions. If your box truck business will expand to multiple jurisdictions, you will have to annually report mileage driven in each state and pay taxes on the mileage driven.
For this registration, you have to provide all the vital details about your trucks including VIN, title information, purchase cost and date, as well as make, model, etc. In addition, you need to know the states you intend to haul in. If your truck has already been on the road, note that you can easily report the mileage from the previous year.
But if your truck has never been on the road, you can use the averages made available by the state. Also, note that the registration fee will be determined by the states you are hauling in and how many miles are driven in each state. Once you pay the fee, you will be given your apportioned tags.
Create an International Fuel Tax Agreement (IFTA) Account
The International Fuel Tax Agreement (IFTA) is an agreement between the lower 48 states of the United States and the Canadian provinces to simplify the reporting of fuel use taxes by truck drivers that operate in multiple jurisdictions.
Note that your box truck business will be expected to complete a fuel tax report at the end of each fiscal quarter, including all miles traveled in participating jurisdictions and all fuel purchases made. After setting up your IFTA account, you’ll get an IFTA license and two decals for each qualifying vehicle.
Complete a Unified Carrier Registration (UCR)
UCR permits ascertain you have active insurance in the states you intend to operate in. This mandates trucking Companies to register their vehicles within their operating state and pay an annual fee based on their fleet size.
This includes any commercial motor vehicle carrier carrying their own goods and products across state lines. It also includes carriers moving interstate goods even if the vehicles do not leave the state. Have it in mind that this registration will have to be renewed each year.
Enroll in a Drug And Alcohol Consortium
In the United States, truck drivers are most often expected to register with a drug and alcohol testing center before they can get on the road. The FMCSA and USDOT mandate that all truck drivers have negative drug screens before hiring others or driving themselves.
If you want to start your own box trucking business and carry out interstate commerce, you will be expected to have an active operating authority. Obtaining trucking authority for your box truck business is a long process that takes around 5-7 weeks, depending on the administrative processing times.
Note that there are numerous upfront costs associated with getting a trucking authority. There are also other forms of regulations and requirements necessary to get trucking authority for your box truck business.