If you are a job seeker, working in the trucking industry may be an attractive career choice because it offers stability, competitive pay, and opportunities for career growth. With the constant demand for freight transportation, truck drivers and logistics professionals enjoy job security along with the flexibility to work in various roles, from long-haul driving to local deliveries and fleet management.
Whether you’re already working in the trucking industry or simply curious about how it works, you may have already heard the phrase “own authority”. But what exactly does it mean, and why does it matter?
Here, One Freight Broker will break down what it means to have your own authority in trucking and how to get it.
What is Own Authority in Trucking?
In simple terms, own authority (also known as motor carrier authority) means that you operate as an independent trucking company. It means you are not working under someone else’s authority. This gives you the legal right to haul freight for hire under your own name, set your own rates, and find your own loads.
On the contrary, those who do not have their own authority typically work as leased-on drivers, meaning they follow the rules of another company’s authority. Driving under their company means getting paid a percentage of the load revenue.
If you want your own authority, it is granted by the Federal Motor Carrier Safety Administration (FMCSA). Here are the steps you will have to take in order to legally transport freight as an independent motor carrier:
Register Your Business
The first step to getting your own trucking authority is registering your business as a legal entity. You’ll need to choose a business structure and register it with your state.
Most trucking businesses choose one of the following structures:
- Sole Proprietorship – Simple, but offers no liability protection.
- Limited Liability Company (LLC) – Popular choice for owner-operators; provides liability protection.
- Corporation (S-Corp or C-Corp) – Best for larger operations, but comes with more paperwork and taxes.
You will also have to obtain an Employer Identification Number (EIN) from the IRS. Establishing a business entity helps protect your personal assets and makes it easier to manage finances, taxes, and contracts.
Apply for a USDOT and MC Number
Next, you need to apply for a USDOT number—also through the FMCSA. This number is used to track your safety records and compliance.
Additionally, you’ll need a Motor Carrier (MC) number, which grants you the authority to transport goods across state lines. You can apply for both numbers through the FMCSA’s online registration system, where you will have to pay a non-refundable application fee.
File a BOC-3 Form
A BOC-3 form designates a process agent in each state where you operate, allowing legal documents to be served on your behalf. This is a mandatory step for obtaining your authority. You must use a registered processing company to file the form, as individuals cannot submit it themselves. Once filed, the FMCSA will update your records, bringing you one step closer to activation.
Get Trucking Insurance
Before an authority becomes active, carriers are required to secure the necessary trucking insurance. The purpose of insurance is to provide financial protection in case of accidents, cargo damage, or liability claims.
Without proper coverage, truckers risk heavy fines, legal issues, and potential business closure. Insurance safeguards not only the driver and vehicle but also shippers and clients who rely on carriers to transport goods safely and responsibly. Additionally, many freight brokers and shippers require carriers to have specific levels of coverage before they will do business with them.
There are several types of trucking insurance, each designed to cover different risks.
Primary liability insurance is mandatory and covers damages or injuries caused to others in an accident. General liability insurance protects against claims arising from business operations like injuries at loading docks FMCSA requires a minimum amount of liability insurance, which varies depending on the type of freight you haul.
Physical damage insurance covers repairs or replacement costs for the truck itself in case of collisions, fire, or theft. Meanwhile, cargo insurance is essential for covering the value of freight in case of loss or damage. Other optional coverages include bobtail insurance (for non-dispatched driving), non-trucking liability insurance, and workers’ compensation for employee drivers.
Choosing the right combination of policies is vital to ensure full protection while operating under your own authority. Your insurance provider will submit proof of coverage (Form BMC-91) to FMCSA, and failing to meet insurance requirements can delay or revoke your authority.
Pay the UCR Fee
The Unified Carrier Registration (UCR) program requires carriers operating across state lines to pay an annual fee based on the size of their fleet. This fee helps fund safety programs and enforcement efforts. You can register and pay your UCR fee online through the official UCR website. Skipping this fee can lead to fines and prevent you from operating legally.
Enroll in Drug and Alcohol Testing (for CDL Drivers)
If you or your drivers hold a Commercial Driver’s License (CDL), you need to comply with FMCSA’s drug and alcohol testing regulations. This includes enrolling in a random drug testing program, conducting pre-employment screenings, and maintaining proper records.
As with many of the requirements on this list, failing to meet these can result in hefty fines or suspension of your authority.
Register for the International Registration Plan (IRP) and IFTA
If you plan to operate in multiple states, you also have to register for the International Registration Plan (IRP) and International Fuel Tax Agreement (IFTA).
IRP allows you to pay apportioned registration fees based on miles traveled in each jurisdiction, while IFTA simplifies fuel tax reporting. Registering for these programs helps you stay compliant while crossing state lines.
After completing all the necessary steps listed above, all you need to do is wait for the FMCSA to process your application and activate your authority. This usually takes about 20 to 25 business days, provided all your documents are in order.
Pros of Having Your Own Authority
Having your own authority in trucking means getting full control over your business, from choosing your loads and negotiating rates to managing your expenses and scheduling. While it comes with added responsibilities, the benefits can outweigh the challenges:
Higher Earnings
When you have your own authority, you have the potential to earn significantly more than working under a carrier. Instead of giving a percentage of your revenue to a trucking company or broker, you get to keep the full amount from your loads. While you’ll have to cover your own expenses, such as insurance, fuel, and maintenance, the ability to set your own rates and negotiate directly with shippers gives you greater earning potential.
Full Control
Operating under your own authority also lets you make your own business decisions. You get to decide which loads to take, which routes to drive, and what contracts to sign. This level of autonomy allows you to tailor your operations to your preferences, meaning you can work with clients and partners that align with your business goals. You can even implement policies and standards that best suit your workflow.
Brand Independence
Having your own authority allows you to build and grow your own brand rather than operating under someone else’s. You can establish a strong reputation in the industry by delivering reliable services under your business name. This independence not only strengthens your credibility but also provides long-term benefits, as a well-known and trusted brand can attract higher-paying customers and better business opportunities.
Flexibility
With your own authority, you have the freedom to set your own schedule and business operations. You can choose when to work, which lanes to run, and even take time off without waiting for approval. This level of flexibility is especially valuable for those who love balancing their work and personal lives.
Business Growth Potential
Finally, having your own authority creates endless opportunities for business expansion. You can add more trucks, hire drivers, and scale your operations as your customer base grows.
With the ability to negotiate directly with shippers, you can build long-term relationships that will benefit your company as you work on growing your network and reputation. The trucking industry is highly competitive, so these connections can give you greater financial security in the long run.
Cons of Having Your Own Authority
Of course, being independent comes with its drawbacks. Being your own boss means conquering several challenges and obstacles from managing compliance to dealing with financial risks:
Higher Costs
Having your own trucking authority means taking on all the expenses that would otherwise be covered by a carrier. These include insurance, permits, vehicle maintenance, and compliance fees.
Commercial truck insurance alone can be significantly higher for independent operators, and upfront costs for licensing and registration can add up quickly. Without the financial backing of a larger company, these expenses fall solely on the owner-operator. If this is something you want to pursue, One Freight Broker recommends having a solid financial plan in place.
More Paperwork
Operating under your own authority requires handling all administrative tasks that a carrier would typically manage. This includes invoicing, taxes, compliance with Department of Transportation (DOT) regulations, and maintaining records for audits. Without proper organization, it’s easy to get overwhelmed and miss paperwork deadlines. This in turn could lead to fines or even suspension of authority.
Finding Loads
Unlike leased drivers who receive dispatch assignments from their carriers, independent owner-operators must find their own freight. If you are only starting out, you may have to rely on load boards and brokers as you work on building those direct customer relationships. Building a network of reliable shippers takes time, and without consistent freight, securing steady income can be a challenge.
Is Getting Your Own Authority Right for You?
Having your own trucking authority isn’t for everyone. Ask yourself these questions before making the leap:
- Do I have enough startup capital?
- Am I comfortable handling paperwork and compliance?
- Can I find my own loads and negotiate rates?
- Am I prepared for the risks of running a business?
- Do I want to grow beyond being an owner-operator?
If you’re financially prepared, business-savvy, and willing to put in the effort, having your own authority can be highly rewarding. But if you prefer stability, fewer headaches, and less responsibility, leasing onto a carrier might be a better option.
Work with One Freight Broker
Having your own trucking authority is a big step toward independence and financial freedom in this fast-paced industry. However, it comes with higher costs, more responsibilities, and additional risks. Now that you are aware of the pros and cons, you can freely pursue whichever path sounds ideal to you.
If you’re still unsure, just do your research, plan your finances, and prepare yourself for the challenges ahead. When in doubt, work with a broker that offers reliable freight transportation services: choose One Freight Broker.
Thanks to our unique and inclusive approach, we are able to connect clients with dependable trucking allies, allowing them to establish direct, beneficial, and enduring relationships. We pass on high-volume discounts to our customers by reducing their dependence on intermediaries. It’s why we are now the go-to choice for shippers everywhere.
In fact, since our founding in 2013, we have significantly reduced shipping costs for clients, amounting to tens of millions in savings, by using this inclusive strategy.
We are also known for our exceptional customer service. Our dedicated team ensures smooth shipping operations, providing personalized support and an assigned account manager to guide you through best shipping practices.
One Freight Broker’s technology-driven solutions allow real-time tracking of shipments, offering transparency and efficiency as we streamline the shipping process. Our wide service range also allows us to provide the perfect fit for your needs, from LTL to FTL, domestic to international, and even expedited shipping.
When you partner with One Freight Broker, you gain access to a vast network of carriers, competitive rates, and a team of experts dedicated to optimizing your shipping process. We are committed to providing tailored logistics solutions that align with your shipping costs and needs.
Contact Us Today
Ready to simplify your shipping experience? Contact One Freight Broker to discover how our expertise can benefit your business, ensuring your cargo is in safe hands every step of the way.
For more information on how we can assist your business, visit our website at 1fr8.broker.
