Resources to help you grow your trucking business

When you first look into the trucking industry, all the regulations and terminology can quickly leave your head spinning. So many questions spring up, and you may have a hard time figuring out which one to answer first. 

Here’s some good news — you’re already reading the right post. Learning about trucking authority is essential for anyone who wants to start their own trucking company. Obtaining operating authority is required for you to legally pick up, transport, and deliver freights both in your state and across state lines. 

In other words, without trucking authority, you can’t legally do business. 

Let’s take a closer look at what trucking authority is, how to apply for trucking authority, and what you need to know about obtaining operating authority through the Federal Motor Carrier Safety Administration (FMCSA).

What is Trucking Authority?

Trucking authority is also known as operating authority. You may see the terms USDOT authority, MC number, MC authority, and DOT number used interchangeably, and in these cases, they all refer to a business’s authority granted through the FMCSA to haul freight. 

Your authority is a special, unique number that represents your company. It makes it easier for the FMCSA to conduct routine inspections, monitor and record your company’s safety scores, and keep a detailed profile of your company. 

Trucking authority also ensures that the industry remains highly regulated and safe for drivers. To keep their authority, a trucking company must always adhere to the FMCSA regulations.

How to Obtain Trucking Authority

Register Your Business

Obtaining operating authority starts by establishing your business as a legal entity. This means you need to have a business name registered with your state as opposed to doing business under your personal name. 

You can register as a limited liability company (LLC) through your department of state website. You will have to submit a form along with a registration fee of $250-$300. 

You will also need to pay annual LLC fees, which are around $100. Each state sets their own fee prices, however, so be sure to find the rates in your area.

You will also need to acquire an EIN number, which you use to file taxes as a company rather than using your Social Security number. The basics for registering as a legal business varies from state to state, so it’s important to research carefully on official government sites.

Apply for Authority

The Unified Registration System makes it easy to apply for operating authority online. Rather than having to file and submit multiple forms, you can work through the system to complete all the necessary paperwork in one place. 

The process is long, so expect to invest several days or even a week or more into getting all the appropriate information. Keep in mind that this is the baseline trucking authority requirement for interstate transportation. 

It doesn’t license you to transport cargo across state lines. 

Companies that want to perform interstate trucking must also apply for a motor carrier number (MC number) in addition to their USDOT authority. While these may often be used synonymously, they are actually two distinct permits.

Get Insurance

You won’t be granted active authority until you can provide proof of valid insurance. Your trucking insurance must meet the FMCSA insurance filing requirements. 

Using form BMC-91 or BMC-91X, you will have to demonstrate you hold at least $750,000 - $5 million in personal liability coverage for each vehicle under your authority. 

If you are a home goods carrier, then you will also have to provide additional cargo insurance. The total amount of insurance you’ll need varies based on your vehicle weight and commodities. Hauling home goods in a semi-truck, for example, will require less insurance than a tanker transporting hazardous materials.

Register for UCR

Your trucking company must register with the Unified Carrier Registration system before it can operate legally. UCR requires annual renewal, and the fees vary by state depending on the size of your fleet.

Register for IRP

The International Registration Plan (IRP) modulates carrier registration between the United States, Washington D.C., and Canada for carriers who move between two or more of these regions. This allows payments to be made on behalf of the collective number of miles traveled between each jurisdiction. 

You’ll need to apply for IRP plates if: 

• The gross vehicle weight of your vehicle is (GVW) of 26,000 pounds or more.
• There are three or more axles, regardless of its GVM.
• Your truck’s combined trailer weight is 26,000 pounds or more. 

Trucks that are part of a declared fleet in Florida must always apply for an IRP.

Register for IFTA

The International Fuel Trade Agreement (IFTA) is a requirement for all interstate motor carriers. You will need to register with the IFTA so you can pay quarterly taxes on your company’s fuel. These taxes are paid in accordance with your headquartered state, regardless of how many additional states you operate in.

Declare Heavy Vehicle Use Tax if Applicable

You will have to file a heavy vehicle use tax via Form 2290 with the IRS annually if your commercial vehicle’s GVW is 55,000 pounds or more. For companies who regularly haul through Kentucky, New Mexico, New York and/or Oregon, additional heavy vehicle use taxes apply.

What Does It Cost to Get Your Own Authority

• Business registration: $250 to $300 depending on your state.
• Trucking insurance: $1,200 to $7,000 monthly premium per vehicle.
• Truck registration and tags: $21 – $110, depending on state.
• USDOT authority: $300 registration fee.
• IRP registration: $1,300 to $2,000 annually, broken down into monthly payments.
• IFTA registration: $8 to $15 per set of decals, varies by state.

What Are the Three Kinds of Authority?

There are different types of operating authority depending on your role in the trucking industry.

Motor Carrier

A motor carrier is what most people think of when they imagine working in trucking. As a motor carrier, you will arrange shipments to be delivered from two destinations, assign trucks, dispatch drivers, and see that every load makes it to its destination without a problem.

Broker

A freight broker as an intermediary between shippers and carriers. Put another way, they help people who need trucks with the companies that have them. 

The broker needs authority to receive payment for arranging the transportation between a shipper and carrier. They do not actually possess the freight or take control of it; their role is focused on management.

Freight Forwarder

Freight forwarders offer transportation options for shippers whose goods may need multiple vehicles or transfers during their delivery route. They are largely popular in land/sea/air travel, so they may pick up goods that have been brought over by plane or ship to carry to its destination. 

Freight forwarders actually assign trucks and haul the goods being moved, unlike a broker who only arranges for deliveries and matches shippers with carriers.

What to Do First

If you haven’t already, complete your business registration for your trucking company. Then, you can start looking for a good insurance provider and gather all the necessary info to complete your USDOT authority registration. 

You should also explore how to get operating authority in your own state, as some have special requirements and additional permits for trucking companies. Searching trucking requirements in your state will ensure that you don’t accidentally miss a single detail. 

Educate yourself as much as you can prior to applying for your trucking authority. This will help you avoid any hold-ups or delays that could ultimately put your business on hold. Getting up and running takes some time, but the entire process also helps you build a solid company that is easy to maintain after you’re fully licensed to operate.

Whether you’re looking to be an owner-operator or a veteran in the industry, Truckbase can help you handle your office load with our light weight TMS which includes document storage, manage your loads and avoid costly disputes if you have time-stamped photos. So that you can focus on what counts. Schedule a demo today and find out why so many truckers are moving to Truckbase!

With any commercial industry, there will always be paperwork and taxes, and the trucking world is no exception. One of the tax requirements that need to be documented and returned to the IRS each year is Form 2290.

What is a Form 2290?

In short, a Form 2290 is a tax document used to record and calculate the use of Heavy Highway Vehicles that operate on public highways, exceed a gross weight of 55,000 pounds, and travel more than 5,000 miles in the taxable year. (This runs from July 1st to June 30th each year)

What is the Purpose of a Form 2290?

While taxes aren’t enjoyable for anyone the Form 2290 does have a purpose that ties back directly into the industry that pays it. Taxes collected from the Heavy Highway Tax are sent back to state governments to support highway maintenance and construction projects.

When heavy vehicles are on the road a lot they tend to wear the materials down much quicker than a regular car. This tax keeps the roads in better condition so that they can keep their wheels rolling on smoother surfaces. Even though paying taxes is not a favorite for anyone it is nice to know that you are technically supporting your business by paying this one.

Who Needs to File a Form 2290?

There is a wide array of people who need to file a Form 2290. Individuals, Owner Operators, LLCs, Corporations, Partnerships, and even some nonprofits, charitable organizations, and educational businesses may need to file a Form 2290 if they have a vehicle that weighs over 55,000 pounds and travels over 5,000 miles during the taxable year on public highways.

There are a few exemptions including any vehicles that are operated by federal, state, or local governments, nonprofit volunteer fire, ambulance, rescue squads, or any vehicles that meet the weight requirement but that don’t travel over 5,000 miles during the taxable year.

You can also claim a credit if you have already paid taxes on a vehicle and then it ends up being destroyed, stolen, or used less than the 5,000 miles you had predicted when you made the payment.

Before you can file your Form 2290 you will need to have a valid EIN (Employee Identification Number) for your business, any VIN numbers for vehicles that qualify, and the taxable gross weight of each vehicle.

Most people who file Form 2290 have the option to file their forms by paper mail or electronically. One exception to this rule is if you are a larger business that has over 25 taxable heavy-weight vehicles you must submit your forms electronically.

If you fail to get your Form 2290 filed in time you can request an extension through the IRS. It is very important that you either get it completed and filed or request the extension as the IRS can charge a penalty as well as monthly interest for any taxes that haven’t been paid when due.

It is also important to note that you need to keep all of your tax records for any vehicles that are taxable highway vehicles that are registered in your name for at least three years after the date the taxes are due or when they were paid. (whichever is later) This would be in case you get audited they will want to go back and review all records.

If you need someone else to be contacted with any questions regarding your Form 2290 it is important that you complete the Third Party Designee section of the form. This gives someone such as an employee of your business, your tax return preparer, accountant, or another 3rd party the ability to discuss your information with the IRS. You can do this by completing the inputting their name, phone number, and a personalized 5-digit PIN that is used to verify their identity as well as marking “yes” in this section of the form.

Other Important Forms Required for Truckers

We have gone over a pretty in-depth review of Form 2290 and how it is used in the trucking industry but it is most certainly not the only tax form you should have knowledge of. Some other forms that you might need to use in your business include the following.

• W-2 Form - If you are a driver that works under a company you should receive a W-2 form. This shows your gross income as well as any amounts that have been taken out from your employer throughout the year.
• Form 1040 - This form can be used to file your annual taxable income if you don’t work for a company. While some of these can be very simple, there are some industries, such as trucking, that require you to fill out certain schedules, most commonly the Schedule C in our industry, and are self-employed driver.
• Form 1099 - This form is what most owner-operators use when filing their taxes as it is used to report any miscellaneous income.
• Form 2106 - Another form that can be used by truckers is Form 2106. This form gives truckers the ability to deduct certain trucking-related employee and business travel expenses as well as an option to report per diem deductions.

Overall if you are new to the trucking business one of the best investments you can make is finding a tax professional who is familiar with the different forms and how they can be used to benefit your business the most. With so many different options out there it’s important to go to someone you can trust is looking out for you.

While we have gone over a lot of the details regarding Form 2290 and some of the other important tax forms truckers may need, it is important for you to always check the IRS Website for the latest and most up-to-date information as it can change with each tax year.

Keeping documents like W2’s and 2290’s stored in a secure place is important. The Trucking Management Software (TMS) by Truckbase can help you stay organized and spend less time in the office and more time where it matters most. Learn more about how our TMS can help support your business by scheduling a demo today!

Within the trucking industry, there are several different freight niches that you can explore as an owner operator. One of the most popular options is hauling dry van freight commodities. Let’s go over some of the reasons this niche brings in new owner operators every day and if it might be a good fit for you.

What Does It Mean to be a Dry Van Owner Operator?

Being a dry van owner operator in the trucking industry simply means that you haul dry van commodities. A lot of the freight that dry van owner operators haul are products you might find at your local retail businesses. Things such as non-perishable foods, clothes, smaller building materials, furniture, household goods, and many other commodities.

Different Types of Dry Vans and Their Purpose

While all dry van owner operators will be classified by the type of freight they haul there are different types of equipment you can use to haul it. With 18 different freight classes that are numbered from 50 to 500 finding dry freight to haul gives you a broad range of opportunities.

If you’re curious about some of the different classes and how they vary the FedEx website has a great breakdown of how they classify the different types of dry freight. The main thing to remember is that the lower the number the less specific it is and the lower the rate it will be to haul.

Let’s talk about the equipment you need to be a day freight owner operator.

• What most people picture when they think of dry freight haulers is a large semi pulling a full-size, 53-foot enclosed trailer. These are a staple on every highway. With the ability to get a lot of freight from one spot to the next it makes it a great option for large businesses to ship their products from warehouses to stores. These trailers can carry up to 45,000 pounds of freight.
• A step down from the full-size option would be to pull a 48-foot trailer. These would help a bit with your fuel efficiency and can still carry around 43,000 pounds of freight.
• Another step down is the 28-foot trailers that can carry up to 22,500 pounds of freight. These are often known as “wiggle-wagons” as many carriers will pull two of these at a time behind a large tractor.
• In some large cities, dry freight owner operators prefer to buy a box truck to make their deliveries. These work better to maneuver in tight spaces that might not have designated unloading/loading areas. This equipment option would also come with lower fuel costs and you would work with more small businesses that you could build strong relationships with.
• Drop and Hook trailers are another option an owner operator could take advantage of when hauling dry freight goods. This would save you time and money as instead of sitting and waiting to be loaded or unloaded you would simply come in and pick up a trailer that is already loaded with goods and ready to be taken to the next spot.

The one common denominator between all of the different types of dry freight equipment is that they must be enclosed. As the name states, no matter what products you might be hauling they need to arrive at their destination safe and “dry”. Having an enclosed trailer keeps products out of any kind of weather perils they might incur from point A to point B.

What are the Advantages of Operating a Dry Van?

Dry Van Owner Operators have a lot of advantages over some of the other niches in the trucking industry.

• An Endless Supply of Products - No matter where you go you can look around and see dry freight commodities. This means you won’t have to just take a load because it’s the only one available. There are always dry freight products that need to be transported.
• Lower Insurance Rates - Since dry van freight is not as specialized as say flatbed or refrigerated goods if you have taken care of your business and have a solid CSA score when you haul dry freight you can get great insurance rates. Many companies prefer to write businesses that haul dry freight since there are fewer things that can go wrong with loads and the driver isn’t typically in charge of any loading or unloading. This reduces claims and provides a great win for dry van owner operators.
• Can Work Anywhere - Even though there are some regions that might have better pay or dry freight that maybe you prefer to haul more than others, you can haul dry freight anywhere in the country. It isn’t limited to one area which gives you more freedom of where you might want to live and work.

How Much Does a Dry Van Owner Operator Make?

Dry Van Owner Operators have the ability to make really good money in the trucking industry. With a constant supply of freight, lower insurance rates, and less overall risk it really puts you in the driver’s seat of what you can make.

With a very large average annual salary going from $134,550-$353,600 the end numbers will completely rely on you. The more days you spend in the truck and how efficiently you use your time while you’re out there will determine where you can fall in this range.

The West and the Midwest are some of the best-paying regions. These are also areas where the cost of living and fuel prices are typically lower so you are able to stretch your dollars further. Some of the top states for hauling dry freight are South Carolina, Ohio, Kentucky, Kansas, and Missouri.

As in any branch of the trucking industry in order to make the best rates, you need to make sure you keep your business in good standing with the FMCSA, pass any DOT inspections, and keep your equipment in good shape with regular maintenance and proper care.

No matter where you are in your Owner-Operator journey, using tools to make your life easier isn’t just practical, it reduces stress and enables you to spend time where it matters most. Truckbase has built a lightweight system that can help you by reducing your office time up to 5 hours each week. Schedule a demo today and find out why so many truckers are moving to Truckbase.