In the trucking industry, an owner-operator is someone who owns and operates their own commercial truck, either leasing their services to larger carriers or working independently to haul freight.
Unlike company drivers who are employed by trucking companies, owner-operators are self-employed. They are therefore responsible for managing all aspects of their business, including maintenance, fuel costs, insurance, and compliance with regulations.
While this level of independence does come with increased responsibility and financial risk, it also offers greater flexibility and earning potential. In fact, many experienced drivers choose the path of the owner-operator because it gives them more control over their schedules and income.
If you want to walk this path yourself, one of the most important parts of the journey is obtaining your trucking authority. This is what we are going to cover here today. In this article, One Freight Broker will break down the process of obtaining your trucking authority as an owner-operator.
What is Trucking Authority?
Before we talk about how to get your trucking authority, we need to discuss what it is first. In the freight industry, “trucking authority” refers to the legal right granted by the Federal Motor Carrier Safety Administration (FMCSA) to operate a trucking business across state lines and transport regulated freight.
When you hear someone say they “have their own authority”, it means they’re no longer leased onto another carrier. Instead, they are running their own business, booking their own loads, and keeping a bigger cut of the revenue.
It goes without saying that without this authority, you cannot legally haul freight as a for-hire carrier—especially when crossing state lines or carrying loads that are regulated by federal law.
Why Owner Operators Need Trucking Authority
There are generally two types of owner-operators: leased and independent. If you’re leased to a carrier, you are basically an independent contractor who drives your own truck but hauls under someone else’s authority. That carrier provides you with loads, insurance, compliance support, and often a trailer. Despite the advantages they offer, they also take a cut of your revenue, which is sometimes 20% to 30%.
When you have your own authority, you call the shots. You’re your own boss in the fullest sense. You choose which loads to haul, which brokers to work with, how much to charge, and what routes to take. You also take home all the profits, after expenses.
An owner-operator with their own trucking authority is in charge of everything from bookkeeping to equipment maintenance. Therefore, getting your own authority is a powerful move. For many truckers, the benefits are worth the added responsibilities.
So how exactly do you get one?
How to Get Trucking Authority as an Owner-Operator
The good news is that getting your trucking authority isn’t exactly difficult. However, it is also a highly detailed process. Here’s a step-by-step overview of what you’ll need to do:
Choose a Business Structure
Before applying for authority, you’ll need to create a legal business. Most owner-operators choose an LLC (Limited Liability Company) for its protection and tax advantages. For this, you will have to register your business with your state, get an EIN (Employer Identification Number) from the IRS, and make sure you’re set up to operate legally.
Apply for a USDOT Number
Every motor carrier must have a USDOT number, which is used by the FMCSA to track safety records, inspections, and compliance reviews. You can apply directly through the FMCSA’s Unified Registration System (URS). Take note that there is no fee to get a DOT number.
Apply for MC Authority
Next, you’ll apply for a Motor Carrier Authority or an MC Number. This is what officially gives you the legal right to operate as a for-hire carrier. The application is also done through the FMCSA website. Keep in mind that there is a one-time filing fee that is currently $300.
When applying, you will have to choose the correct type of authority between the following:
- Motor Carrier of Property (Except Household Goods)
- Motor Carrier of Household Goods
- Broker Authority (if you plan to broker loads, too)
Once submitted, your application will trigger a 21-day public vetting period. During this time, your information is made public so anyone can contest your filing.
File a BOC-3 Form
A BOC-3 form designates a process agent in each state where you will operate. This agent can accept legal documents on your behalf. Most owner-operators use a third-party service to handle this stage of the process. While this is a one-time filing, it has to be done before your authority is granted.
Obtain Insurance
This is one of the biggest and most expensive steps. The FMCSA requires proof of liability insurance before your authority is activated. At a minimum, you will need:
- $750,000 liability (most brokers require $1 million)
- $100,000 cargo insurance (typical for freight haulers)
It’s common for new carriers to pay $12,000 to $20,000 annually in insurance premiums, though this varies based on driving history, equipment, and type of freight.
Register for the Unified Carrier Registration (UCR)
The UCR program is a federal requirement for any interstate motor carrier. You’ll pay a fee based on the number of trucks you operate. Take note that the UCR has to be renewed annually.
Enroll in Drug and Alcohol Testing
As the owner and driver of your own trucking business, you must be enrolled in a random drug and alcohol testing consortium. You’ll also need to complete a pre-employment drug test before operating.
Set Up an IRP and IFTA Account
If you’re operating across state lines, you’ll need to register under the International Registration Plan (IRP) and get International Fuel Tax Agreement (IFTA) decals for your truck. This allows you to pay the correct fuel taxes and operate legally in all participating jurisdictions.
Keep Up with Ongoing Compliance
Once everything is in order, your authority will be activated and you will finally be able to operate legally. However, this is when the real work begins. And by “real work”, we mean staying compliant with Hours of Service (HOS) regulations, Electronic Logging Device (ELD) requirements, quarterly IFTA fuel tax filings, annual UCR, and drug and alcohol testing requirements.
Total startup costs typically range from $15,000 to $25,000, depending on insurance premiums and the number of states you will operate in. It’s definitely not cheap, but you can think of it as an investment in long-term business ownership.
Challenges of Running Under Your Own Authority
We talked about how owning your trucking authority comes with significant responsibilities and challenges. This is because authority gives you full control over your business. To make the most out of your trucking authority, you will need to deal with these responsibilities and rise above these challenges.
It’s better to be prepared. If you know what you are getting into, then you will be better equipped to deal with it. Here are some challenges to prepare for as you transition from leased driver to independent authority:
Finding Loads
Without a carrier to feed you freight, it’s up to you to consistently find paying loads. This is where load boards, brokers, and direct shipper relationships come in handy.
Building your network of connections may take some time—not to mention the competition is high. If you want to find loads, you need to prove to brokers and shippers that you are a reliable trucking ally. You have to deliver consistently high service quality and consistent communication.
Earning repeat business takes time and effort, and that’s part of what makes the early stages especially difficult for new owner-operators.
Cash Flow
Even with good loads, payment delays can still cripple your operation. Shippers and brokers often take 30 to 60 days to pay, while fuel, tolls, and maintenance costs must be paid upfront. Many owner-operators rely on factoring services to manage cash flow, but those services also come at a cost, cutting into already thin margins.
Insurance Costs
One of the biggest obstacles for owner-operators looking to secure their own trucking authority is insurance. Commercial trucking insurance under your own authority is expensive—often several times more than what’s paid when leased to a carrier.
Additionally, cargo, physical damage, liability, and other required coverages must be maintained to stay compliant and protect your assets. Also remember that premiums are often based on factors like your driving history, vehicle type, and operating area.
Work with One Freight Broker
Even though running your own authority comes with lots of upfront costs, the benefits are just too great to pass up. For drivers with an entrepreneurial spirit, good discipline, and a willingness to learn, it can even be life-changing. If you’re ready to move from company driver or leased operator to true independence, getting your own trucking authority might be the best decision you ever make.
However, if you would rather work with an already-established freight broker that is known for reliable transportation services, choose One Freight Broker.
One Freight Broker utilizes a unique and inclusive approach that allows clients to build, direct, and beneficial connections with reliable trucking partners. By reducing their dependence on intermediaries, One Freight Broker helps clients reduce their shipping costs. In fact, since our founding in 2013, we have significantly reduced shipping costs for our clients, amounting to tens of millions in savings, thanks to this unique strategy. It’s also the reason why we are now the go-to choice for shippers everywhere.
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. Whether you’re shipping domestically or require assistance with more complex logistics, we’re here to ensure your freight reaches its destination efficiently and cost-effectively.
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.
