If you’re a truck driver and are ready to take the plunge to become an independent owner-operator, we've got you covered. We've put together this checklist of items you'll need to start your own trucking business and be your own boss.
Before we begin, we strongly recommend that you do your due diligence to determine if getting an MC Authority is absolutely right for you. As you're probably already aware, not all owner-operators need authority. Also, the process for becoming an owner-operator will vary based on whether you’re opening your own LLC or driving under an established trucking business platform like CloudTrucks.
The following steps detail how to go about starting your own trucking business and how much it costs. We’ll also touch on the perks of leasing with a virtual trucking carrier instead of obtaining your own authority.
1. Build a Trucking Business Plan
Failing to plan is planning to fail. To have a successful trucking business, it’s extremely important to create a trucking business plan. This document should be a detailed description of how your business will operate during every quarter and serve as a guide to managing your entire company strategy.
If you need help, read our guide on how to create a trucking business plan. You can also simplify the process of becoming an independent owner-operator under the CloudTrucks authority - allowing you to be your own boss without the headaches of having to build out an extensive business plan for lenders and investors. Although you will - of course - have to be diligent about understanding your finances and commitments to any lenders and investors you engage with in any arrangement.
2. State Business Registration $35-$500
Even as an independent owner-operator, you have to legally establish your trucking company before you get to work. You can do this by registering your business with the Small Business Administration and obtaining a federal tax ID.
The location of your business and the way you structure it will determine how and where you need to register. LLC filing fees range from $35 to $500, depending on which state you’re filing in.
3. Get Your CDL (Licenses) - $0-$5,000
Class A Commercial Driver's Licenses (CDLs) are required for combination tractor-trailers, the primary type of equipment used in the trucking industry. The cost to obtain your CDL is anywhere from free to $5,000, depending on how you obtain it.
- Some companies offer free CDL training and testing in exchange for an employment contract for one to two years.
- You can obtain your CDL by attending a truck driving school.
- There are several classes of CDL. Ensure you have the appropriate CDL for the equipment you intend to operate and the freight you plan to transport.
- The Federal Motor Carrier Safety Administration (FMCSA) and your local state’s licensing office can provide training manuals and additional information at no cost to you.
Certain types of equipment and cargo require special CDL endorsements:
- Doubles and triples - for transporting two or three trailers in tandem
- Tanker - for transporting bulk liquids and gasses in containers that are 119 gallons or larger
- Hazmat - for transporting materials classified as hazardous materials by the U.S. Department of Transportation
- Passenger - for operating a passenger transport vehicle such as a bus
4. USDOT and Motor Carrier Authority Number - $300
The U.S. Department of Transportation (USDOT) Number is a unique identifier used for collecting and monitoring a company’s safety information. It’s required for all commercial vehicles hauling cargo in interstate commerce. There is no cost associated with obtaining a USDOT number.
An MC authority number is a unique identifier assigned by the Federal Motor Carrier Safety Administration (FMCSA). Trucking companies conducting interstate commerce are required to have one. The application fee for MC authority is $300.
There may be additional fees with items, such as insurance, which are required as a part of the operating authority application process. To begin your MC authority application, visit the FMCSA’s Unified Registration System.
If you lease on to a carrier like CloudTrucks, you don’t need to go through the process of acquiring your own DOT, MC authority number, or insurance. We can take care of this for you. All you need to do is fill out a short application, and we'll reach out to help you get set up.
5. Unified Carrier Registration (UCR) - $59-$56,977
Unified Carrier Registration (UCR) is a federal fee and registration for companies and individuals conducting interstate commerce. The cost ranges from $59 to $56,977 and is based on fleet size. If you run under another carrier’s authority, UCR could be covered through that carrier.
6. International Registration Plan (IRP) Tag - $1,500-$2,000
The International Registration Plan (IRP) is the process for registering for apportioned license plates for commercial vehicles and trailer equipment.
The IRP allows trucks to operate in the U.S. and most Canadian provinces.
The IRP is issued by the state where your company is located. The IRP fee varies from state to state and ranges from $1,500 - $2,000.
IRP may not be required for leased owner-operators if they run under another carrier’s plates.
7. International Fuel Tax Agreement (IFTA) Decal - $0
The International Fuel Tax Agreement (IFTA) is a fuel license allowing companies to file quarterly fuel use tax returns based on the state the company is headquartered in. The IFTA includes a decal that must be applied to each truck and must remain current for each calendar year.
To obtain an IFTA decal, apply through your state’s .gov website. There is no cost for an IFTA decal.
8. BOC-3 Form - $20-$40
Form BOC-3 is a required part of the MC authority application process.
BOC-3 allows your company to designate a process agent in another state. For example, if your company is headquartered in California but sued in Michigan, the process agent will accept any legal documents issued to you in Michigan.
BOC-3 is required for each state you operate in, and the paperwork must be filed with the FMCSA by a process agent of your choice. The cost for BOC-3 filing ranges from $20 to $40.
9. Standard Carrier Alpha Code (SCAC) - $95
The Standard Carrier Alpha Code (SCAC) is a code used for identification of companies primarily engaged in hauling loads that are:
- Intermodal (rail and ship containers)
- Port cargo
- Railyard cargo
- Chemicals/hazardous materials
If you intend to transport any of the above, you’ll need to visit the National Motor Freight Traffic Association’s (NMFTA) website to register and pay a $95 fee.
10. Insurance - $3,000 to $12,000
Insurance is another requirement for several registrations, including the application for MC authority. Your trucking business will need insurance to cover the cost of your equipment and cargo. The FMCSA maintains a complete list of insurance requirements. Required forms of insurance include:
- Auto liability
- Auto physical damage
- General liability
If you’re an owner-operator leased onto another company's authority, the average cost for insurance ranges from $3,000 to $5,000 per truck annually. Owner-operators with their own MC authority pay anywhere from $9,000 to $12,000 per truck annually for insurance.
The Easy Way to Start Your Own Trucking Business
It’s more than possible to start your own trucking business under your own authority. But if you want to skip the hassle and paperwork, it’s easier to lease to an established trucking authority. To lease on to CloudTrucks’ authority, for example, you need a valid CDL A license, two years of truck driving experience, and a clean driving record. You don’t even need your own truck - we can help you with that, too.
Drivers for CloudTrucks who lease onto our authority can make upwards of $17,000 a month without the hassle of obtaining or maintaining an authority as part of our Virtual Carrier package.
To start your own trucking business under your own authority, you’ll need to set aside time to develop a thorough trucking business plan and fill out the necessary paperwork to have your business registered and obtain a USDOT and Motor Carrier Authority Number, among other requirements. The process also requires a pretty significant upfront investment.
Another thing to mention is that if you have a truck that’s 55,000 lbs or greater, you’ll be required to pay the Federal Heavy Highway Vehicle Use Tax (HVUT). To remain HVUT compliant, you must file IRS form 2290 and pay $550 per vehicle per year.
You can simplify the process by leasing to a trucking authority. We’ll take care of the nitty-gritty while you enjoy the benefits of being an independent trucker - like making your own schedule and maximizing your trucking revenue. If you're interested in learning more about how owner-operators can make $17,000 a month driving for CloudTrucks, then head over to our Getting Started page.
FAQs About Starting a Trucking Business