How To Get Different Types of Box Truck Authority For Lucrative Carrier Business!

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Having an owner-operator trucking company won’t mean much if you aren’t making any real money from it.

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.

Why is box truck authority important?

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.

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.

But first things first.

What type of authority do you need for a box truck?

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.

What is authority in box truck business?

The body is responsible to regulate the trucking industry. The law requires everyone related to the field to have a valid trucking authority.

Without it, 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.

What are the different types of trucking authority?

RELATED: Guide about box truck lease for startup & pros!

What Does Getting A Box Truck Authority Actually Mean?

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 trucking authority. Otherwise, you’ll be limited to just a leasing service.

Can I run under someone else's authority?

Obtaining Your Authority

Before you obtain your 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.

Different Operating Authority Types

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:

What are the benefits of having your own authority?

  • 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.

Do I need a truck to get my authority?

  • 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
  • Inventorying
  • 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. 

How much does it cost to get your own authority?

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.

Conclusion

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.

Can I put my trucking authority on hold?