Having an owner-operator trucking company won’t mean much if you aren’t making any real money from it. However, if you want to truly bring in the big bucks, you need to get hold of your own box truck authority. An authority can be a consistent source for earning higher rates.
Sure, there’s always the option of leasing firms. Offering your services to them is an easy way to get your own rig if you’re struggling with credit.
Moreover, it also sets the foundation for you to set up a multi-truck enterprise with other hired drivers in the future if you want to go down that road.
- 1 What is a Box Truck Authority?
- 2 Why Do You Need Authority for Box Truck?
- 3 Different Trucking Authority Packages
- 4 Motor Carrier of Property (Excluding Household Goods)
- 5 Motor Carrier of Household Goods
- 6 Broker of Property
- 7 Broker of Household Goods
- 8 United States-based Enterprise Carrier of International Cargo
- 9 United States-based Enterprise Carrier of International Household Goods
- 10 Box Truck Authority Requirements
- 11 What are Box Truck Authority Cost?
- 12 Do Box Trucks Need IFTA?
- 13 Can I Get My Own Authority Without a Truck?
- 14 FAQ about box truck authority!
- 15 What are simple trucking authority checklist?
- 16 What is intrastate authority packages?
- 17 How to get box truck authority in 3 steps?
- 18 Is running under someone else’s authority possible?
- 19 Conclusion
What is a Box Truck Authority?
For operating long-term and successfully in the trucking world, you need an Operating Authority, also known as Motor Carrier Authority.
It’s effectively a permission from the government allowing you transportation rights of goods in return for profit.
Granting permission for the trucking authority falls directly under Federal Motor Carriers Safety Administration or FMSCA. The body is responsible to regulate the trucking industry. The law requires everyone related to the field to have a valid trucking authority.
Without box truck authority, you won’t get the permission to carry goods for delivery or cross boundaries. When it comes to trucking authority, there are primarily two types: Common and Contract. In the case of a Contract carrier, it can only haul freight for firms it’s contractually obligated to.
However, that isn’t the case for Common carriers. They can lend their services for hire to any entity who desires it for transporting their goods without the need for any pre-existing formal contract.
Why Do You Need Authority for Box Truck?
Getting a trucking authority ultimately means you’re able to successfully remove any middleman from the whole deal.
Instead, you can approach the receiver, load matching services, and shippers directly for obtaining freights. This increases your workload as well as responsibilities. At the same time, that means bigger payoffs and higher profits.
So the essential step here is to first obtain the box truck authority. Otherwise, you’ll be limited to just a box trucking leasing service.
Different Trucking Authority Packages
Depending on the Operating Authority you request, the level, and type of insurance required by FMSCA will change.
That’s why you will have to be extra careful when selecting your Operating Authority and only select the type(s) relevant. The various types of Operating Authority to select from are:
Motor Carrier of Property (Excluding Household Goods)
The authority is applicable to for-hire carriers, who transport commodities, excluding household goods for the public in return for payment.
Carriers with the authority only have the permission to transport goods that a customer uses in their homes. So, a carrier can transport items that the customer purchased from a factory or store and deliver them to their homes.
It’s not necessary to have cargo insurance for obtaining the authority. However, you do need to file public liability (bodily injuries and property damage).
Motor Carrier of Household Goods
With the authority, a carrier can only transport household goods of their customers in return for payment.
Household goods refer to personal items used in homes. That means a carrier can also transport items from a store or factory if the customer who purchases it intends to use it.
For this authority, a carrier needs to file for public liability as well as cargo insurance with FMSCA.
Broker of Property
This authority is applicable to a corporation or partnership that receives fees for setting up the transportation of property (not including household goods) that belongs to others.
The broker never takes the responsibility nor the possession of the property.
Broker of Household Goods
The authority fits a partnership, corporation, or an individual who receives payment to arrange (that is, the load broker) the transportation of household goods belonging to others.
They require registration if the carrier also provides the additional services-
- Binding and nonbinding estimates
- Protective packing of individual items
- Protective unpacking of individual items
- Loading and unloading.
United States-based Enterprise Carrier of International Cargo
The authority is applicable to companies that transport international cargo. This excludes household goods, and the company must have headquarters in the US but is controlled or owned by a resident alien or a Mexican citizen. The international cargo needs to originate or head out for a foreign country.
United States-based Enterprise Carrier of International Household Goods
This authority applies only to companies that deal with the transportation of international household goods. Household goods refer to personal items used in homes.
The company needs to have headquarters in the United States but is controlled or owned by a resident alien or Mexican citizen.
The authority includes shipping of items from a store or factory purchased with the intention of using in private homes. The international household goods need to originate or head out to a foreign country.
Anybody applying for the authority to operate as carries or freight forwarders of household items also needs to offer arbitration. This is a means for settling any losses or damages during delivering shipments.
Box Truck Authority Requirements
Before you obtain your box truck authority, there’s one important thing to know about- setting up your IFTA account. The IFTA or International Fuel Tax Agreement is an agreement that’s in place between 48 states and the Canadian provinces, aimed at simplifying the fuel tax collection process.
It’s a necessary step, especially for companies operating in several states. The IFTA sticker allows your fleet of trucks to travel seamlessly by having to pay fuel tax only to the base jurisdiction.
There’s no longer the need to pay tax to each member jurisdiction your truck travels to. With IFTA taken care of, the next steps for obtaining a trucking authority are fairly simple:
- Firstly, you have to set up as a Sole Proprietor or a Limited Liability Corporation.
- Then you can obtain an Employer Identification Number or EIN from IRS. You can find all the relevant information on www.irs.gov.
- Visit the official site of FMSCA to download your application form for your trucking authority.
- Next, you’ll need to submit OP1 or OP1(b) or OP1(ff), depending on which form applies to you. Don’t worry, the website will guide you in identifying the form you need to submit.
- You’ll also need liability insurance, and in the case of a Common Carrier, you’ll also need to obtain cargo insurance. Also, make sure that the Federal Motor Carrier Safety Administration gets the notification of your coverage from your insurer. Having cargo insurance is necessary, and the bigger the insurance, the bigger will be the haul you can carry.
- You’ll receive your authority permit after ten days from the mail.
With the federal institutions taken care of, the next step will be to take care of the following with your registered state.
- Registration fees for uniform carriers,
- IRP or International Registration Plan forms,
- Single state registration,
- DOT physical test and drug/alcohol test,
- Heavy vehicle use tax.
What are Box Truck Authority Cost?
The box truck authority cost is $300. The fee is paid one time and is non-refundable. But you will also have to bear additional costs like:
- Filling BOC-3: $20-40
- Box truck insurance: Minimum $700 a month
- Passenger Authority and Goods Authority: $300 each
- Changing name fee: $14
- Reinstatement of revoked authority: $80
Any filing fee within the box truck authority process is paid one-time and cannot be refunded.
Do Box Trucks Need IFTA?
Yes, the box trucks do need IFTA. All vehicles, like box trucks that carry either loads or passengers, are obligated to apply for the IFTA license if they meet the requirements. The biggest benefit of IFTA is that rather than filing fuel taxes for your box truck with each state, you can file a single tax with the state where your business is based.
Moreover, all states of the USA except Alaska, Hawaii, and Columbia are part of the IFTA agreement, so you can file your taxes anywhere once at the beginning of your trucking business.
Can I Get My Own Authority Without a Truck?
No, you cannot. You can apply for the DOT number and box truck authority, but you will get it once you have a truck. This is because you need an insurance policy to be eligible for authority, and you can get insurance only when you have a truck.
Here is the trucking authority checklist that will make the process easy and smooth for you:
- Get your trucking company registered
- Apply and get an EIN
- Get the USDOT number
- Apply for MC number
- Fill in the BOC-3
- Apply and get insurance for the truck
- Pay HVUT
- Get an IFTA license
- Complete the Unified Carrier Registration
Interstate authority packages help motor carriers that cross state lines for hire register themselves with the Federal Motor Carrier Safety Administration at the best prices. The basic package starts at $398, going up to $448, $593 and $998 with the most expensive one priced at $1198.
Here is how you can get the box truck authority:
- Apply for authority by filing all the forms like BOC-3 and OP1 and paying the fee.
- Use your USDOT and MC number to secure a UCR permit and pay HVUT.
- Register for IRP and register for IFTA account.
If your truck’s lease is in someone else’s name, then yes, you can run the business under their authority. The other person will have the insurance while you own the IFTA account.
Managing your own trucking business can be tricky. There are scores of permits, forms, invoices, and every other paperwork you need to deal with. However, one of the most important among all of these that you can’t afford to forget when running your own trucking company is the Box Truck Authority. It’s vital and profitable as well.