Acquiring your trucking authority is an essential step in setting up your trucking business if you’re planning to operate nationally. The process of obtaining your MC authority number begins with the Federal Motor Carrier Safety Administration (FMCSA). If you’re new to the trucking industry the steps involved may seem confusing, complex, and intimidating.
To help you understand the complexities of the MC authority process we’ve put together this step-by-step guide.
What is an MC Authority?
MC authority is a number assigned by the FMCSA to identify a carrier operating for hire and transporting regulated commodities in interstate commerce. This MC number is also known as an operating authority or trucking authority.
Are the MC Number and USDOT Number the Same?
No. The USDOT number is different from the MC number and is required for all commercial vehicles transporting passengers or cargo in interstate commerce. The USDOT number is unique to each company and is used for:
- Obtaining safety permits for carriers transporting hazardous materials
- Safety audits
- Compliance reviews
- Crash investigations
- Safety inspections
Furthermore, the USDOT number is one of the requirements for obtaining your MC authority.
Who Needs an Authority?
You only need an MC authority if you are planning to start your own trucking company and driving as an owner-operator. Independent truck drivers are able to operate under the MC authority of another company and do not need their own. It’s important to consult your business plan and understand the risks associated with being fully on your own as a trucking company or owner-operator versus operating as an independent truck driver under another company’s MC authority.
If you decide to pursue your own trucking authority you will also need to determine what type of cargo you intend to transport. To clarify further, here are some examples of the different types of MC authority that depend on your business model:
- Motor Carrier of Property (Except Household Goods) - This is the type of MC authority that most carriers use to operate. It authorizes the for-hire transportation of regulated commodities in the public sector. Although cargo insurance is not required for this type of authority, you will be required to file proof of liability for bodily injury and property damage with the FMCSA to obtain this type of interstate operating authority.
- Motor Carrier of Household Goods (Moving Companies) - This type of MC authority is appropriate if you intend to focus on transporting only household goods. According to the FMCSA, “Household goods are personal items that will be used in a home. They include items shipped from a factory or store if purchased with the intent to use in a home, and transported at the request of the householder who pays for the transportation charges” (Source: FMCSA). Carriers seeking this type of authority are required to file proof of liability and cargo insurance with the FMCSA.
While these are the two most commonly sought forms of MC authority, there are additional types covering brokers, and international shipments of cargo that originates in or is destined for a foreign country. Clearly defining your role in the transportation industry is crucial for maintaining MC authority compliance.
Who Does Not Need an Authority?
Not every carrier or truck driver needs to obtain MC authority and this includes company (fleet) truck drivers, independent truck drivers operating under another company’s authority, and carriers operating under certain exemptions such as:
- Intrastate Carriers - Carriers operating exclusively within the borders of the state where their business is located
- Private Carriers - These are carriers who transport cargo belonging to their company.
- For Hire Carriers Transporting Exempt Commodities - These are carriers who specialize in exclusively transporting non-regulated cargo.
- Carriers operating exclusively within a federally designated commercial zone - Commercial zones are typically located in regions where a large metropolitan area is on the border of multiple states.
- Independent Owner-Operators working for CloudTrucks - Independent Owner operators who choose to work with us drive under our authority. Head to our Getting Started page to learn more.
Independent truck drivers are not required to obtain MC authority if you choose to work for a company.
How do I get a Motor Carrier Number?
Once you've determined that you do need an MC Authority, the process can be lengthy. To get a motor carrier number you’ll need to proceed through nine different steps in a precise order. You’ll also need to set aside funds to cover the costs associated with obtaining an MC number including appropriate insurance and non-refundable registration fees. Double-check your entries on the forms to ensure you’ve entered everything accurately. Failure to do so may mean a loss of any registration fees you’ve already paid and you will have to restart the process and pay these fees again.
What are the steps to get an MC Authority?
Step 1. Create a Business Entity
Before applying for your MC authority your business plan needs to be exact in certain areas. The criteria the FMCSA looks at include the cargo, operation, and company type your business plan is pursuing (consult your FMCSA application for a full list of criteria).
You’ll also need to have your EIN (Employer Identification Number) obtained through the IRS, and finally pre-approval for liability and cargo insurance. If you skip on the preapproval and later in the process are denied insurance coverage you’ll be unable to proceed with your application for MC authority. To avoid wasting your time and money, make sure you can be insured.
Because this process can take up to sixty days to complete, make sure you have enough cash on hand to get yourself through the application period, plus another 45 - 60 days of cash on hand to cover operating costs after you’re up and running because it may take that long to receive payment from your first loads.
The cost for establishing your business entity ranges from $50 to $500 depending on the state. Insurance typically ranges from $9,000 to $12,000 per year depending on a variety of factors.
Step 2. Apply for MC Authority
Now it’s time to begin filling out your application for MC authority. In this step, you’ll refer back to your business plan to determine your FMCSA registration needs and requirements. Additionally, you’ll need your truck information including VIN, year, weight, etc., incorporation details, and license plates (if you already have them). You will also need your USDOT number. There is also a $300, non-refundable filing fee.
Step 3. Get USDOT Number
To obtain your USDOT number, proceed to the Unified Registration System portal and follow the instructions. You will not be able to proceed with your application for MC authority until you’ve obtained your USDOT number. Until URS is fully implemented there is no charge for a USDOT number.
Step 4. File BOC-3 Paperwork
BOC-3 paperwork must be filed through a process agent. The FMCSA maintains a list of process agents who are able to accurately complete this filing. The BOC-3 paperwork assigns the process agent the authority to accept legal documents on behalf of your trucking company in each state you are authorized to do business. Process agents charge anywhere from $10 - $50 to file your BOC-3 paperwork.
Step 5. File UCR
The UCR (Universal Carrier Registration) is a permit verifying that you have active insurance coverage in the states you operate in. Your MC number and USDOT number are required before applying for your UCR. Operating without the UCR permit is severely penalized so be sure not to skip this step. The UCR fee is $69 for 0 to 2 vehicles.
Step 6. Pay HVUT
HVUT is the Heavy Vehicle Use Tax. The tax is assessed on all heavy vehicles that operate on public highways. To file you’ll need to fill out and submit form 2290 to the IRS. You cannot register for IRP (International Registration Plan) until you have submitted your form 2290. The amount you pay is dependent on where and how far you’ve transported cargo.
Step 7. Register for IRP
The IRP (International Registration Plan) is an agreement by the 48 contiguous states and Canada, granting carriers a license to conduct interstate transport (also known as apportioned plates). If you need help completing this step, consult the IRP website. Keep in mind, IRP registration is required for setting up your IFTA account. The IRP fee may range between $1500 to $2000 for a single vehicle.
Step 8. Set Up IFTA Account
IFTA (International Fuel Tax Agreement) is a similar agreement between the 48 states and Canada for the purpose of collecting fuel taxes. To remain compliant with IFTA you’ll need to file quarterly returns in your home state. Some states require additional permits in addition to IFTA. To make sure you have all your bases covered when it comes to permits, familiarize yourself with the regulations of each state you plan to operate in.
Step 9. Enroll in a Drug and Alcohol Testing Program
After you’ve obtained your MC authority, USDOT number, and all the relevant permits, you must complete this final step before you can take your first load. The FMCSA requires every driver with a CDL to enroll in a drug and alcohol testing program. The rules established by the FMCSA and USDOT cover testing, substances tested for, and test frequency. The FMCSA maintains detailed instructions covering the rules and how to remain compliant with their drug and alcohol testing requirements.
Once you’ve completed all the above-mentioned steps, go through and double-check everything, make sure you have the required paperwork such as permits, IFTA sticker and IFTA registration papers, and other documents required for regulatory compliance aboard your truck.
In addition to the costs mentioned above ($15,000 or more depending on several variables), the entire process for obtaining your MC authority can take about two months to complete. That’s two months that you’re unable to operate and unable to generate revenue. Alternatively, you can eliminate the lengthy wait and high costs while removing the paperwork headaches by driving with CloudTrucks. With CloudTrucks you can enjoy the freedom of being an owner-operator with the back office support of a carrier.