How To Get Your Own Trucking Authority & Become An Owner Operator

Semi truck at sunset

If you’ve been working as a company or lease driver for the past few years, you may have decided it’s time to realize your dream of owning your own trucking business as an owner-operator.

There are many steps to check-off your to-do list on the way to making that dream a reality.

One of those steps you’ll be hearing a lot about is something called “getting your authority.” But what does this mean and why is it important?

  • The first reason is cold hard cash. You can earn more money as an owner-operator with authority than as a lease driver or company driver without it.
  • Want to have a whole fleet of trucks running across the country? Getting authority is necessary for building that multi-truck enterprise.
  • All those trucks in your fleet won’t drive themselves (for now, anyway). You’ll need your authority if you plan to hire new drivers to haul cargo as your business expands.

What does getting your own authority mean?

Authority is permission issued by the Federal Motor Carrier Safety Administration that allows you to haul goods for profit. Without FMCSA authority, you’re limited to working as a lease driver or company driver.

  • Authority lets you go directly to receivers, shippers and load matching services to find loads.
  • It gives you more control over your career, including the customers you’d like to work with, the cargo you want to haul and the geographic regions you’d like to work.
  • It lets you eliminate the middleman and form profitable business relationships with the companies you haul for.

There are two types of authority available for owner operators:

  • Contract — This is for owner operators who only haul for customers they have a contractual agreement with.
  • Common — This is what you’ll want if you plan to haul for any entity willing to pay you, with or without a contractual agreement.

There are other types of authority in the trucking industry, which may apply depending on your business model and the type of cargo you’re carrying:

  • Broker
  • Freight forwarder
  • Private
  • Exempt for hire
  • Household goods
  • Hazmat
  • Intrastate

Complete These Steps Before You Apply for Trucking Authority

When you apply for your trucking authority with the FMCSA, you’ll be expected to have several steps already completed.

Here are the things you’ll want to take care of before applying.

  • Basic decisions about your business. What will be the name of your business? Will you register as a sole proprietorship, partnership, LLC or corporation? What types of goods will you haul? Will you get your freight through shippers or brokers?
  • Insurance. All carriers must have a minimum of $750,000 in liability insurance, $1 million if you are hauling hazardous materials. Common carriers must also purchase cargo insurance. As a new carrier, you will pay higher premiums initially, but will have the opportunity to earn lower rates as you gain accident-free experience.
  • Set up your IFTA Account. The International Fuel Tax Agreement (IFTA) is an agreement between the lower 48 states and 10 Canadian provinces. It ensures that each jurisdiction where you drive your commercial truck gets a share of the fuel taxes you pay, regardless of where you fill your tank.
  • Designate process agents. A process agent is an entity, such as an attorney, that may receive legal documents on your behalf, such as court papers if you are sued. You must designate a process agent for every state in which you will be driving.
  • Heavy Highway Vehicle Use Tax (HVUT). You are required to pay $100 for all trucks weighing over 55,000 pounds; an extra $22 is assessed for every 1,000 pounds over 55,000.
  • Unified Carrier Registration. This is filed with the state you’re based in, and is based on number of trucks in your fleet (power fleet).
  • International Registration Plan (IRP). Also known as apportioned base plate or cab card, this is filed with your state.
  • Necessary permitting in individual states. Intrastate authority allows you to haul cargo within a single state. New York, New Mexico and Kentucky require state issued permits to do business in those states, and Oregon requires a permit and a bond.

How to Get Your Own Authority in Trucking

As noted above, once you have all the necessary set-up steps completed, you’re ready to apply for your own authority in trucking.

You do this by visiting the FMCSA website. Carefully review the types of authority to make sure you choose the right category, submit the required filing fees and follow instructions for completing the application.

If you’d like to get assistance with obtaining authority, you can visit Permit Shop, Inc., which offers discounts to truck drivers coming into Prime Inc.’s Power Fleet Advanced Fleet program.

Do you have questions about how to become an owner operator? Are you looking for guidance to help you get your authority?

Contact Power Fleet Advanced Fleet Program. We’ll provide helpful information and help you get on the road to truck driving success.