7 Mar 15

If you’re an owner-operator who’s leased on with a carrier, you’ve probably toyed with the idea of getting your own authority. While there’s a lot less financial risk when you’re leased on, many drivers want the chance to earn more money and run independently. 

There are a lot of upfront costs associated with getting your operating authority, not to mention the maze of regulations. To help you decide whether or not to take the plunge, here's a quick rundown of what it’ll cost to start your own trucking company.

What is Operating Authority?

Any carrier doing interstate commerce is required to have a US DOT number. You can apply for this on the FMCSA's website using the new Unified Registration System.

Before You File

You need to decide on a few things before you start filling out applications:

  • Business name – There’s a $14 fee to change this.
  • Business type – Get with your accountant to decide how your business should be organized: sole proprietorship, partnership, LLC, or corporation. Each comes with a different level of liability, and the taxes for each vary based on the state you’re in.
  • Freight – What are you going to haul? Who are your future customers?

Proof of Insurance

Before the FMCSA approves your authority, you’ll need to submit proof of liabilty insurance. This is one of the biggest obstacles for owner-operators looking into getting their own authority, since you’re now taking on the liability costs that the carrier you were leased on with was paying for. All carriers are required to have a minimum of $750,000 in liability insurance for general freight or $1 million for hazmat.

Insurance premiums could cost you anywhere from $4,000 to $16,000 per year per truck. The price depends on your driving record, the state you live in, and the states you plan to do business in. New carriers are often charged a higher premium, with the price typically dropping once the business is more firmly established.

Other Requirements

But wait, there’s more:

  • Process agents – FMCSA requires you to have a process agent in every state you do business in. This is the entity that would get served papers if you had legal trouble in a state other than the one your business is based in. You file this with Form BOC-3, which costs $35.
  • Heavy Highway Vehicle Use Tax (HVUT) – Any rig weighing at least 55,000 lbs has to pay HVUT, which is $100 plus an extra $22 for every 1,000 lbs the rig weighs over 55,000. This is filed with IRS Form 2290.
  • Unified Carrier Registration (UCR) – This is filed with the state you’re based in, and the fee is based on the number of trucks in your fleet (power only). If you have 1 or 2 trucks, the fee is $76. Fleets of 3-5 trucks pay $227, and it keeps going up from there.
  • International Registration Plan (IRP) – Also known as your apportioned base plate or cab card, which is filed with your state. Beginning in 2015, the IRP began full reciprocity, which means all carriers will be apportioned for all of the Lower 48 states and the 10 Canadian provinces. These fees will be about $2,100 for the first year of registration.
  • IFTA – There’s a nominal fee for getting set up, based on your state ($0-$10).
  • Other state regulations – Some states require weight distance permits when traveling through them (NY, NM, and KY). Oregon requires a permit and a bond. Some states also require intrastate authority.
  • Drug and alcohol testing – Your new company must enroll in a drug and alcohol testing program, and anyone in the company holding a CDL must pass a screening. 

DOT New Entrant Audit

Once you clear all these hurdles, you’ll be enrolled in the DOT New Entrant Program. Within your first 18 months of business, you’ll receive an audit that will focus on:

  • Driver qualifications
  • Driver logs
  • Maintenance programs
  • Accident register
  • Driver qualification files
  • Drug and alcohol policies

Sound like a lot of hassle? DAT Authority can take care of all the paperwork, including all federal fees, or we can help you during any part of the process.

 

Comments (7) -

Unless you are stupid like me
Don't get your own authority.
Brokers will burn you so is insurance and your life will be so miserable.
You will haul 99% of the time 3pl loads that stands for left over or refused loads from respected carriers.
You will get only huge bills with very small profits and when the market is supra saturated with O/O with low or non experience like it's happening at this time brokers will make fun of you.
I was dedicated before I came to this mess......somebody told me hunters story and I bite.....how sorry I am for my self.
Just go with a small local Co and be home very often because after all their no real money in over the road.

Reply

We hear this all the time from new owner operators who get frustrated that they can not find premium loads on the lanes that they want. We have been really successful assisting the drivers we work as we stay on top of the boards and develop relationships with the shippers and brokers for you. We have excellent reviews and references and only work for the little guys to give them an edge in this dog eat dog game. Give me a call anytime Kim @ A1 Dispatch (513) 409-3910 if you need a hand.

Reply

Kim@A1 Dis patch we will be talking I'm  pretty sure you can help me, My name is Dale and I am also starting  up my own deal already have a few clients of my own big company's so we'll see and
  Hopefully talk in the next few weeks to come.  
                                                                                         Dale

Reply

Dale,

I look forward to speaking with you.  My Office number is (606) 798-6071 and texting number is (513) 409-3911.

Reply

You are either the most misinformed owner operator or just lying I have been operating on my 15 month and have not realized one single month of a loss there are more loads out there than truck and plenty of money to be made you don't make money for two reasons you don't want to or you just don't know how

Reply

Rodger ,
Interesting in speaking to you about o/o and hotshot business. My husband knows trucking, been in all aspects of the business but never owner operator. Looking to get started . If willing  to speak with us for quick pointers on starting could you email me your contact info.
Thanks
Teresa R

Reply

Mitchell J Shaw
Mitchell J Shaw

You just don't know how to do business . I do very well as o/o you just have more responsibility some are made for this and some are not we need everyone who isn't doing good to quit and go back to what you know stop trying to be something that you are not .God bless

Reply

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