How to get your trucking authority in 2021. How much does it cost? Should you do it? #authority

so it's 2021 and getting your own authority is all the rage everybody's doing it new applications for motor carrier authorities are at an all-time high so why are people wanting to do it well they're seeing dollar signs freight is paying great volumes are high well is that a good enough reason to get your own authority let's talk about that today talk about some of the upsides i have a video where i talk about some of the downsides i encourage you to watch that so today we're going to talk about should i and then some things to consider before you do it if you decide to do it how do you do it and then approximately how much is it going to cost and that can vary greatly from person to person so let's get started here so should you get your own authority well that's a complicated topic i have a video on that i'd like you to watch before you proceed with getting your own authority i'll put a link in the description below most people are wanting to get their own authority because they're only seeing the dollar signs okay there's way more to it than that this is a huge responsibility and there's a lot of things to do other than just drive the truck and book the freight okay so if you're just looking to do it because you think you're going to get rich and make a ton of money that's probably not a great reason to do it but if you're looking to build a company build a future and kind of take your business to a higher level that might be a good reason otherwise there's there's really good money to be made finding a great carrier and leasing on to them and also that really helps limit your exposure in the in the bad times uh in 2020 during the pandemic it wasn't a lot of fun having your own authority and i think a lot of new people looking in to get into it now aren't realizing that so what i tell everybody the first thing before you decide to get your own authority there's a couple things i want you to look at number one [Music] number one is health insurance consider what you're going to do for health insurance before you go ahead and quit that job or where you're where you carry your health insurance through being self-employed health health insurance can be a challenge and it could potentially if you have a high rate it could wipe out the extra profits you're going to make being self-employed so always look into that first and try to come up with a number number two go shop around and get yourself an insurance quote from somebody who insures in the trucking business uh the most popular nowadays for a new entrance with their own authority is progressive there are other companies that will do it and most times progressive is the most expensive but sometimes it will be your only option this is a big deal because some people come to find out if your record is not perfect if you don't have enough experience your insurance rates can be sky high prohibitively high from even allowing you to get your own authority so you need to know this ahead of time you could be talking anywhere from for a good quality new entrant uh about a thousand dollars a month 900 to a thousand dollars a month all the way up to twenty five hundred to three thousand dollars a month for people that really have a sketchy record uh and some people won't be able to get it at all so don't go through with the whole expense of getting your own authority until you you've touched on these two basic things first the first thing i recommend people do if you're going to get your own authority is decide what kind of business entity you're going to run this under sole proprietor llc s corp c corp i really highly encourage you to consult with a professional on this i do have some videos about it with for general information if you go back a little ways in the channel but it's worth sitting down getting some professional advice on this okay because you're gonna hear a lot of reasons why this and reasons why that on youtube and from other people but it's a small price to pay a hundred dollars or whatever to sit down with a professional like a cpa tax attorney something like that for about an hour and decide what kind of entity you want to run and then to go along with that get them and have them get you an ein number okay uh also called a tin number tax id number this is a employer identification number uh it's it's a tax number for you to do your business in to set up a basic llc if you do it yourself be about depending on the state 100 150 dollars right around there and if you have like a h r block or a cpa file for an ein number for you you're talking probably maybe 50 if you do it yourself you can do it yourself for free but if you're not well versed and confident in those things it's not a large amount to pay to have somebody do this for you okay next if you're doing this yourself you're gonna go to the fmcsa website and there you can file now these these things all kind of go together here uh this is what you're gonna do all next kind of altogether you need an mc authority number usdot number and along with that you you fill out this mcs-150 form and these three things give you the numbers you need to be a motor carrier okay and then after that now if you hire an agent you probably go through these trucking rags in the truck stop uh hiring an agent to do this and in 2005 i didn't know any of this information and i think i paid uh 400 to have this all done for me today you might spend between six hundred and fourteen hundred depending on the agent uh it's something you can do yourself but if you wanna hire it out the cost isn't really all that bad just try to pay as little as possible and then to go with these things not on the fmcsa website but if you go to google google and just type in boc3 this is a document that you need to to get these things activated it's not the only thing you need but this is one one thing that you will need it's a blanket of coverage okay what that does is it gives you like a an address in every state usually it's like a law office or something like that where if somebody wants to sue you out of state say you're in um massachusetts and somebody you hit somebody's car in montana okay they need to have an address where they can serve you papers in montana and uh and find you your business has to be registered so that's what this boc3 is if you go online on google you can find these for free it's a one-time thing i paid thirty dollars once back in 2005 and it's been good forever so don't let somebody tell you that you need to pay them a hundred dollars a year to have your boc3 okay if you look hard enough you might just find this thing for free otherwise twenty thirty dollars is the most i would probably pay for that but this is one thing that will have to be on file before your authority can become active okay the next thing you will need to do is have your insurance company go ahead and file their form to give you primary liability insurance the legal minimum is 750 000 uh in my opinion you should carry a million because some brokers are nitpicky on it some customers are nitpicky on it unless you show a million dollars on your certificate they want to give you a little bit of a hassle about it's really not much more but the legal minimum to get your authority active is seven hundred and fifty thousand dollars so you can file that mcs 150 for usdot and your mc number but it doesn't activate the process until your insurance agent puts this insurance on file on the fmcsa website then the clock starts ticking you have they say 21 days now in this pandemic time who knows could take longer so during that waiting time you got some more work to do so let's talk about that right now while you're waiting for your authority to go active next thing to work on would be filing your ucr ucr stands for unified carrier registration replaced the single state registration several years back and it costs about if you got one to three trucks it's going to be about 70 a year to file you can file this yourself at ucr really simple to file got a video on that for you taking about five minutes and about 70 bucks so go ahead and get that filed also now there's a lot of little things that you can do while you're waiting for your employee uh your your authority to go active and say you're going to talk about all of them in this video but i will follow it up later with some videos some things that are not necessarily necessary to get your authority to go active but they're necessary in order for you to be a motor carrier in good standing such as how to manage your driver qualification file and keep your driver records okay we're going to skip over that today we'll talk about that later but here are some things you can do meanwhile while you're waiting for your your authority join your drug testing consortium you can do this through most local clinics go to the occupational health department and say i need to join your drug testing consortium for my drivers there needs to be you need to be in a random drug testing consortium if you don't want to do it at your local clinic there are services all over the internet uh like nastic oaida foley services i use i like to use my local clinic because then i can control the cost a little bit better also you need and and that will be based on the the clinic like my clinic charges 50 a year to be in their consortium and then every time somebody gets pulled for a drug test it's about 50 then you need to sign up for the fmcsa drug testing clearinghouse on the fmcsa website it does not cost anything but you must be registered and you must query drivers and yourself that you want to hire okay next thing you can do while you're waiting shop for your equipment get your equipment all picked out and if you decide on what you're going to buy put the necessary insurance on it to bring it home have it in your possession okay which would be uh physical damage on the truck and trailer and then you can skip like cargo because you're not hauling freight yet why pay for the cargo insurance until you're ready to haul freight okay that's why we're just doing this insurance one step at a time like if if you're not ready to get your equipment why would you want to be paying for that kind of insurance when all you need to get your authority active is the primary liability so that's why you're kind of why we're breaking it down like this to save you some costs while you wait okay so get your truck in your trailer if you need a trailer maybe you're doing power only i don't know once you get that equipment you're gonna need to pay the 2290 uh heavy highway use tax it's 550 a year for a over the road tractor and that's pro rated so if you don't use it for the whole year if you don't buy your truck until uh february and uh you're only going to pay for a portion of the year i have a video on that three videos on 22.90 how to fill them out uh if you buy it in the middle of the year so if you need to know how to do that it'll save you a bunch of money doing it yourself otherwise to hire somebody to do it you might be 140 in addition to that 550 for the year after you buy your vehicle you have a little bit of time to file this you don't have to do it like immediately but get it filed sooner than later sometimes this thing can be a delay and certain states are going to want to see it to give you your license plates you might be close to your renewal date so it's better to get this back sooner than later next thing to think about is your mc number and your us usdot number what you need to do interstate authority int er let's talk about intra state if you don't know the difference interest state okay your interstate authority allows you to pick up freight in one state and cross state lines take it to another state deliver that freight if you're doing freight within the same state take wisconsin for instance if you pick up a load in wisconsin and you deliver wisconsin and never leave the state unless you have an intra-state authority that is illegal and most states are that way a lot of people don't know about this okay so if you're going to be picking up and delivering in the same state and you already know you know i'm going to do some local work in i don't know pennsylvania whatever you need a pennsylvania intra-state authority off the top of my head i don't remember if pennsylvania requires it i believe there's 14 states in the country that do not require an interest authority but most of them do so look into that i'll do a video on that in the future as a matter of fact which states require it which ones don't now's a good time to start thinking about do i need intra-state authority for any of these different states okay so pick up deliver in the same state must have intra-state authority if your state requires it and that's just not the state you live in if you live in idaho but you're going to go to california and pick up in sacramento and run a load down to los angeles california does require an intra-state authority and to do that you will be breaking the law unless you have a california intra state authority so consider that put out the applications for that if you need them okay so now you've waited the 21 days or however long it takes you know kovid rules and your authority is active now what do you do well you got your authority you got your equipment now it's time to get irp plates and if the permits okay irp stands for international registration plan you need an apportioned irp plate to haul interstate commerce okay not like uh in intra state sometimes a dmv will accidentally try to give you the wrong plate in intrastate like a dump truck plate or something like that or whatever you need an irp plate okay a portion and in your home state you should also get to go along with your plate and if the account so you can get your ifta stickers irp plates vary per state some are 1600 my state is 2100 so that's a variable there of about 500 or so you'll have to plan on find out how much your state charges for an irp plate [Music] if the i only pay about five dollars a year to renew my ifta account every year and get those stickers but you must have these you can run on a temporary registration while you're waiting for your plate but you need to have those if the stickers in the if the account now we're almost we're getting there we're almost ready to go trucking but not quite yet some states require additional permitting so let's see what what states those are kentucky kentucky has something called a kyu number if you're going to travel through kentucky you need to be registered with the state of kentucky and you need to apply for a kyu number when i did it it cost nothing i did it myself if you have one of these permitting agents do it it's going to cost you i think it'd probably be about 30 per state now here's something that people often forget about kentucky and it will get your truck impounded until you get it taken care of is you need to register your truck on kentucky's taxable inventory list okay you need to list each one of your trucks on the invent taxable inventory list under your kyu number you can do this on their website it's very easy i talked a little bit about that in my kentucky video i show how to file a return i don't show you how to get the number but it's the same website and then i show you how every every quarter you have to file a return with the state of kentucky and pay the weight distance tax and it's also a good time every quarter to just check your taxable inventory list and make sure it's up to date the next state is new mexico you need if you are going to travel through new mexico you need a new mexico weight distance tax permit it's uh is ten dollars that's all it takes you can get one off the state of new mexico's website once again you could have an agent file it but it's not hard you can get this yourself and about ten dollars and then you also have to file a quarterly new mexico weight distance return tell them how many miles you traveled in the state of new mexico and pay tax accordingly the next state you need to get a permit for oregon if you're going to file if you're going to run an oregon you need an oregon permit now oregon has just recently reworked their whole permitting system so if you haven't done it in a while you used to be you had to get a new mexi an oregon trip permit every time you went in the state and then once you got to be a certain size or if you posted a bond you could buy a yearly permit and then file quarterly and they recently did it you sign your you get you open an or got account you sign your truck up once and you're done okay but every time you add a truck don't forget to put one on there and then you need to file a quarterly return with the state of oregon saying how many miles you traveled pay tax accordingly and then the last state we need to talk about is uh new york you've probably seen if you're driving for a company you got a little sticker on your bumper it's a new york hut sticker if you're going to travel in the state of new york you need a new york hud account and you need to buy that permit it's about uh three dollars a year or three dollars in the permit they usually last about three years until they decide to renew them and come out with a new series and then you also need to file a quarterly report with the state of new york to once again tell them how many miles you drove and they're going to tax you accordingly all of these you do quarterly with your ifta it's one thing i forgot to mention with that ifta you got to file a quarter return quarterly return i have a video on each one of these returns all four of these and the if the return uh if you go back through my videos you want to know how to do this yourself because you can pay somebody to do it number one they may not do it right if they don't do it right you are still responsible for the penalties additional money and possibly some additional penalties and it's very easy and also you should try to learn more about your business and try to do these things so if you want to know how to file each one of these returns i have a video on each one of them just go back in the channel a little ways and you'll see how to do it now we just got our authority just went active we're ready to go trailer trucking so what uh kind of the last thing we need to do is uh we want to go ahead and activate all the insurance we want a whole spread of insurance activated because we're ready to go trucking and what do we need okay so let's kind of talk about insurance what the minimum requirements are and then just that may not be everything you want to have it's smart to have some other things so let's talk about it quick uh we already talked about primary liability you may also hear this referred to as auto there's some different names for it like we said the minimum is 750k get yourself a million save yourself a headache later okay there's price difference is negligible and to some brokers it makes a difference even to some customers if you end up getting your own direct shipper freight they're going to want to see that million on there so just just get that for yourself next thing physical damage truck and trailer physical damage includes like your comprehensive collision would be damage to the equipment so if your truck is worth 40 thousand dollars make sure your truck is insured for 40 thousand dollars uh same with the trailer if your trailer is worth fifty insure it for fifty know the intricacies of this policy that your physical damage for the truck will not cover add-ons such as an apu so if you think you have an apu that's uh twelve thousand dollars uh put that on there as a rider or a separate like personal property potentially maybe even your homeowner's insurance would cover that not necessarily so ask your agent about that okay so what else do we want to have cargo industry standard is a hundred thousand dollars in cargo insurance if you think you're going to be hauling more expensive things like i don't know seafood things like that higher value bump that up all right so all of these things are subjective to your company your rates cargo insurance really isn't that bad for a hundred thousand dollars i pay about fourteen hundred dollars a year uh and on top of that cargo if you're hauling reefer get yourself reefer breakdown insurance just about everybody's gonna require that every broker if you're hauling reefer freight they're going to want to see that reefer breakdown insurance on your endorsements on your policy if you're in a state that requires workers comp you're going to have to get workers comp you're you're kind of a self-employed so most states are not going to require that that's a state thing you're going to have to work out with your insurance company they're going to they'll be able to advise you on that so i'm just going to leave it out of this because most places will not require that for self-employed people something that is not a requirement but it is a good idea [Music] is general liability a two million dollar aggregate okay general liability will cover anything that primary liability doesn't so primary liability if you hit somebody's car if you hit a shipper's building take down a light pole anything to do with the truck trailer trucking in general general general liability is for anything else it will not cover negligence but i'm trying to think of a for instance here something that is not related to trucking um say that uh you are at a shipper and you smoke and you take your cigarette and throw the butt in the dumpster and the dumpster is full of paper and you light the dumpster on fire and burn down half their building that would kind of be a thing for general liability although they're probably not going to cover something like that because it was negligence and stupidity but i'm just trying to illustrate something away from the truck that general liability would cover off the top of my head not really coming up with an example but that's kind of how it would work now all your bigger brokers are going to demand general liability there are some that will not deal with you unless you have this it's cheap my 2 million general liability cost me about 350 dollars a year so it's good cheap insurance and and then these other ones are going to be subject to you know your your experience your driving record things like that so all in all like i said a new applicant should expect to pay between 9 500 a year and geez i've seen them all the way up to ridiculous prices of 30 000 a year for somebody with a bad record maybe uh a criminal record or you have a couple accidents and some csa points okay so it's important to get that quote first because insurance is the big wild card in all this and uh hey if you're just wanting to do this because you're seeing dollar signs that might change your mind right there so all of these basic things will get you to the point where you're ready to roll down the road is that all you need no there's a lot more that goes with having your own authority i have a lot of videos on the topic and there's more to come we'll talk about a lot of compliance issues and how to manage some back office things all the way along the ways so take care check out the videos on the screen below make sure you hit that like button and subscribe and let me know if you want to see more videos like this

Channel: DIY SEMI, Trucking And More

Views: 106,937

Rating: 4.9559913 out of 5

Keywords: Diy, Freightliner, truck repair, maintenance, truck maintenance, semi truck, semi, 18 wheeler, cdl, peterbilt, kenworth, westetn star, volvo, mack, international, drive shaft, hvac, blower motor, air bag, Air brakes, tires, air conditioning, turbo, diy semi, shocks, water pump, detroit diesel, Cummins, cat, series 60, isx, glider kit, air dryer, solenoid, Sleeper, Charge air cooler, radiator, alternator, differential, ifta, mudflap, fuel discounts, diesel prices, fuel card, apu, filter, amsoil

Id: ZAlLykXtD2Q

Length: 24min 35sec (1475 seconds)

Published: Wed Mar 17 2021