Getting Your Own Authority
Before you spend the necessary funds to apply for motor carrier authority, you need to research the following:
- Who will you haul for? How much and when will they pay you? Is it often 30 days or more after you deliver a load that you are paid? You need to have a minimum of 2 months operating expenses available in addition to your normal living expenses.
- Get quotes from 2 or 3 good trucking insurance agents. This will be your single largest expense to start your own operation. You need 1 million dollars in liability and enough cargo insurance to cover what you haul. Talk to your potential customers about cargo insurance so you can get accurate quotes.
- Know what the DOT requirements are before operating your own company. A recent rule requires that all new authority holders be given a compliance review within 180 days of receiving their rights.
- Ensure you have a simple but accurate system to check that each load you haul is billed and paid within the agreed upon time frame.
- Set up a separate business account and only pay operating expenses and yourself from this account.
- Know what it costs you to operate your truck or tractor/trailer on a mileage basis. If you do not know this you cannot price your services on a profitable basis.
- Determine your annual costs such as tag, heavy vehicle use tax, ad valorem tax, permits, tires, and maintenance. Break this down to a per mile basis and always leave this much in the business account until required.
When you have researched and/or set up these items and have your answers, you can then decide if you need to get your own authority.