What is Own Authority in Trucking?

Gaining “own authority” is a crucial stage in the trucking industry that can enable drivers and owner-operators to manage their businesses independently. However, what does “own authority” mean, and how does one obtain it? To help you determine whether owning authority in trucking is the proper course for you, we’ll explain the concept, the procedure, the advantages, and the difficulties in this post.

Understanding Own Authority in Trucking

Having your own authority refers to having the legal right to work on your own. This gives you complete control over the freight you decide to transport, the routes you choose, and the customers you serve while operating under your own business name. In essence, gaining authority turns drivers into entrepreneurs rather than sole freight carriers.

You must comply with the regulations set forth by the Federal Motor Carrier Safety Administration (FMCSA) in order to operate independently. This involves getting a Motor Carrier (MC) and USDOT number in addition to making sure you have sufficient insurance. Because they portray you as an independent, legally compliant carrier, each of these standards is essential.

Steps to Getting Your Own Authority

Registration Process:

1. USDOT number. First, you’ll need to register for a USDOT number, which is essential for tracking safety records and inspections.
2. Motor Carrier (MC) number. Next, apply for an MC number, which is required to operate as a motor carrier in interstate commerce.
3. Unified Carrier Registration (UCR). Complete your registration by filing with the UCR, which is mandatory for all motor carriers.

Insurance Requirements

Insurance is one of the most critical components of owning authority. The minimum amount of liability insurance required by the FMCSA is usually $750,000 for general freight. The specifications, however, differ according to the kind of freight; hazardous items, for instance, require more coverage.

Compliance and Documentation

1. BOC-3 Filing: File a BOC-3 form designating agents in each state for service of process.
2. International Registration Plan (IRP): If you plan on interstate operations, you’ll need to register with the IRP, allowing you to pay pro-rated fees based on miles traveled in each state.
3. International Fuel Tax Agreement (IFTA): The IFTA streamlines fuel tax reporting across multiple states, essential for operating in interstate commerce.

Timeline and Cost

On average, the registration process can take about 20-30 days, but with processing and compliance steps, it could extend longer. The cost of getting authority varies but typically includes FMCSA fees, insurance, and additional registrations, totaling a few thousand dollars.

Benefits of Having Your Own Authority

The control that comes with authority is one of its main benefits. You can decide your rates, routes, and schedules, as well as which clients you deal with. Unlike leased drivers, you are not bound by the rules or schedules of another business.

Although operating independently comes with its own expenses, you typically have higher earning potential. You keep more of your earnings rather than splitting them with a bigger carrier. Owner-operators who want to increase revenue and achieve financial independence would find this appealing.

You can create and expand a brand using your own authority. This enables you to market directly to customers, establish a solid name in the field, and grow your company beyond what is feasible while working for a carrier.

Challenges and Responsibilities

Independence comes with extra expenses. In addition to continuing maintenance, fuel, and operating costs, insurance, registration, and legal fees can mount up. These expenses can be difficult, particularly for people leaving leased driver jobs.

It is crucial to continue adhering to state and FMCSA requirements. You are in charge of fulfilling these standards independently when you have authority. It’s critical to keep up with all regulations because noncompliance can lead to fines, audits, or even the loss of power.

Strong business knowledge is necessary while operating your own business. You’ll need to take on a variety of tasks, including getting clients, securing loads, managing funds, and supervising daily operations. Cash flow problems and missed compliance deadlines can easily put your company in danger if you don’t handle it well.

Is Getting Own Authority Right for You?

Owning authority isn’t for everyone. Begin by evaluating your financial situation, level of experience, and preparedness to manage business operations. Do you have sufficient funds to pay for both the upfront and ongoing costs? Are you ready to take on the additional duties?

There are other options if you feel overwhelmed by owning authority. Working with a load board or leasing to a carrier can provide comparable advantages without requiring the same degree of dedication. Consider these choices to see if they could be more appropriate for your current circumstances.

Tips for Success with Your Own Authority

To succeed with your own authority, keep these tips in mind:

1. Build strong client relationships. Networking with reliable clients is essential for consistent work. Be professional and transparent to establish a strong reputation.
2. Manage finances carefully. Budget for expenses, monitor cash flow and maintain financial reserves. Keeping your finances healthy will allow you to navigate the unpredictable nature of trucking.
3. Stay compliant. Make a checklist of compliance requirements, from insurance renewals to licensing updates. Staying compliant will keep your business running smoothly.
4. Use tools and resources. Consider using software for load management, billing, and compliance tracking to streamline your operations and improve efficiency.

Conclusion

Owning authority opens up new doors for independence, flexibility, and profit. However, it also brings significant responsibilities and challenges. By understanding what owning authority entails and carefully considering the pros and cons, you’ll be better prepared to make an informed decision. 

For those ready to take on the challenge, Owner Operator Land has great opportunities and lucrative contracts to fulfill. We work with trustworthy carriers that can provide owner-operators with stable loads. Let us know if you are interested.