There are several different types of operating authority in the trucking world, but each one involves receiving authority from the Federal Motor Carrier Safety Administration (FMCSA). This means you receive permission to operate commercial vehicles for varying transportation needs throughout the country and sometimes beyond.
When you’re looking to start a trucking company, it’s important to know the differences between each type of operating authority. You can start a transportation business with one truck, but you’ll need to obtain operating authority to do so. Start yourself off right and know what you need before you get started.
How Do Operating Authorities Work?
If you’re looking to get compensated to transport cargo, passengers, or other goods, you will need to start by obtaining the proper operating authority. This can be done by individuals or companies, but it is a necessity when looking into providing carrier transportation. Having the right operating authority will allow you to legally transport certain goods or passengers so be sure to obtain the one that will cover your transportation requirements.
How Do I Get an Operating Authority?
If you are looking to transport passengers or commodities, you will likely need to obtain some form of FMCSA operating authority. In order to obtain an operating authority you must complete the following:
- Application MCS-150 (This is how you will get a USDOT and MC Number)
- Application BOC-3 (Shows you are authorized to do business out of state)
- Insurance (Proof of truck insurance is required)
There is a $300 filing fee when you apply for your operating authority. There are several services available to help you obtain the proper operating authority if doing so on your own seems overwhelming.
How Long Does it Take To Get Operating Authority?
It can take 2-3 weeks to complete the necessary steps to get your operating authority granted. Typically, once the operating authority has been granted, you can expect your documents to be sent out within 3-4 business days.
Can You Get Transportation Authority Without a Truck?
While technically yes, you can get transportation or operating authority without a truck, in order to activate your operating authority, you must provide proof of insurance. Proof of insurance means you must have a truck. So, while you can start your own trucking company without even having to drive, you will need to have a truck to obtain operating authority.
Read more about starting a trucking company without a truck here. The type of operating authority you will need will depend on what and where you are looking to transport.
Do I Need Operating Authority?
While most trucking companies are required to obtain operating authority, there are a few types of businesses that do not.
Private Carriers
Private carriers that transport their own cargo.
For-Hire Carriers
For-Hire carriers that are hired for a fee or other compensation and only haul exempt commodities (exempt commodities are cargo that is not federally regulated).
Commercial Zone Carriers
Carriers that operate within designated commercial zones (designated by the government) only are exempt from interstate authority rules.
What Are the Different Types of Operating Authority?
With varying types of operating authorities, it isn’t always clear which one you will be required to obtain. Read on to learn more about each type of operating authority.
0P-1 – Motor Carrier and Broker Authority
Authorized motor carriers, individuals, or companies that are hired in exchange for payment for either providing or arranging transportation for property and household goods to the public or other shipping partners.
0P-1(P) – Motor Passenger Carrier Authority
Authorized motor carriers, individuals, or companies that are hired in exchange for payment for either providing or arranging transportation for passengers. Similar to the OP-1 Operating Authority, this type is required when passenger transportation is involved.
0P-1-(MX) or 0P-2 – Mexico Based Carriers Authority
Authorized motor carriers, individuals, or companies based in Mexico that are hired in exchange for payment for either providing or arranging transportation for property and household goods to the public or other shipping partners. Similar to the OP-1 Operating Authority, this type is required for those seeking operating authority in Mexico.
0P-1 (NNA) – Non-North America-Domiciled Motor Carriers Authority
Authorized motor carriers, individuals, or companies based in a country other than the United States, Mexico, or Canada that are hired in exchange for payment for either providing or arranging transportation for property or passengers. Similar to the OP-1 Operating Authority, this type is required for those seeking operating authority that is based outside of the United States, Mexico, or Canada.
Factors to Consider Before Getting an Operating Authority
Applying for and obtaining your own operating authority can absolutely be worth it when you first consider the factors and your needs.
Price
There is a one-time fee of $300 for every individual applying for operating authority.
Insurance
Having proof of insurance is one of the main requirements when looking to validate your operating authority. While you can apply for operating authority without insurance, you will be required to have proof of insurance for your truck(s) in order to confirm your operating authority. Proof of insurance is required within the first 60 days of obtaining your operating authority or it will be dismissed.
Making a Business
The FMCSA must be able to identify your company or business, no matter the size. This means you are required to register your company or business and obtain an Employer Identification Number (EIN). Your EIN is also your Federal Tax ID Number which helps make a little more sense as to why you will need it. Whatever type of business structure you are looking for, one is required in order to gain operating authority.
Advantages of Getting an Operating Authority
Whether you’re looking to run a large corporation or a small LLC, there can be advantages for both when you get your operating authority.
- You’re the Boss: When you obtain your own operating authority, you are putting yourself in control. This means you can decide what type of transportation you do, when and where you do it, and more. (As long as you’re adhering to the guidelines under your operating authority.)
- You Choose: With your own operating authority, you can almost always choose what, when, and where you transport. Make your own schedule as long as it works for your customers.
- Keep the Profit: When you have your own operating authority, you’re often answering to yourself. So, not only can you choose your loads and rates, but you aren’t left to disperse those profits like you would when you operate under someone else.
Operate and Control Your Own Way
Obtaining your own operating authority may not be the best answer for every truck driver, but it is certainly an advantageous move for many. As your own operating authority, you are essentially responsible for your success. This can be daunting for some, but it can also be one of the best ways to help yourself succeed.
Stepping out on your own can certainly be intimidating, but with the right guidance, it could be the best move you’ll make in your trucking career. Take the best steps and help yourself control your future when you get your operating authority.