Truckers and Travelers
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Posts Tagged ‘starting trucking business’
DOT Safety Audit – Your First DOT Compliance Review
Monday, November 9, 2009
posted by 18 Wheeler 8:43 PM
Hello, Fellow Drivers! I was doing some research on trucking authority and found an interesting power point about DOT Compliance. This presentation takes you through the process of your first DOT audit. Below is the link for that power point presentation. In my next post, I will explain the paperwork that you must have in place to pass this inspection by the DOT. You can always email me and I will be happy to answer any questions in depth about this process. Enjoy the read and remember to be safe out there!
http://www.fmcsa.dot.gov/about/outreach/education/education.htm
Once you get to this page look in the lower right hand to the column titled “Regualtions and Standards”. Under this heading click on the first title “What is a Compliance Review?”. Your computer will ask you if you should open or save this download. I would save it so you can go back and read it more than once.
This inspection will happen within the first 18 months of opening your trucking business. A DOT officer will contact you to schedule this audit. Preparation is your best tactic to pass this important inspection. You can do it with planning and proper education and guidance. Remember to see yourself as the successful trucking company you are and you will pass your audit with flying colors.
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Hello, Fellow Drivers! If you read yesterday’s blog (11/5/09) on how to get trucking authority, then you will be able to follow this blog and decide if you want carrier authority, broker authority (steps are below) or both. In any case, you will want to bookmark the federal website that gets you started on your way to starting your trucking business. That site is www.fmcsa.dot.gov. You can also visit www.truckersandtravelers.com for further assistance and email the owner of the site. You be the one that decides who will assist you. Empower and educate yourself of the trucking authority process. Enjoy the read and remember…be safe out there!
Broker Authority
Requirements of obtaining your broker authority within the minimum 16 days:
- Register for a Motor Carrier (MC) number issued by the Federal Motor Carrier Safety Administration (FMCSA)
- File Process Agents (BOC 3 filing) for each state
- Obtain a $10,000 Surety Bond or Surety Trust
- UCRA Registration
Refer to www.truckersandtravlers.com for assistance with doing steps 1 and 2 yourself.
Step 3 – Surety Bond or Trust
You are responsible for obtaining your own surety bond or surety trust. You can choose either a bond or trust, however you will need to obtain one or the other within the first two weeks after the MC number is filed to avoid any delays. To find a reputable surety bond company, do a Google search on surety bond for trucking and you will find companies to assist you with this process.
What is a Surety Bond?
It is an amount of money that you post to guarantee that you will do something you’ve promised to do.
Freight Brokers must obtain a Broker Authority. In order for the Broker Authority to be released as “Active”. there are 2 items that must be on file with the FMCSA. You must have a BOC-3 process agents and a $10,000 Broker Surety Bond.
The Broker Bond is evidence of financial responsibility. Basically the Surety Bond guarantees that you will meet all your contractual obligations to your customers and that you can pay any claims immediately.
Either the BMC 84 “Property Broker’s Surety Bond” or a BMC 85 “Property Brokers Trust Fund Agreement” must be on file, both will satisfy the Federally mandated $10,000 insurance/surety requirements for your Property Broker Authority.
You would need to contract with a bonding company or use your own resources. Evidence of a surety bond must be filed using a BMC 84, evidence of a Trust Fund with a financial institution must be filed using form BMC 85.
These items must be on file in order to activate your Broker Authority.
A Bond is not insurance that you purchase; it is the collateral for a promise.
We work with a “Highly Reputable” Bonding Company that has several different financial plan options for you to help you obtain your required Broker Bond. They currently hold over 50% of the Bond market, they are in excellent standing with the Better Business Bureau, they are very experienced and have many references for verification.
Most new Broker’s do not have this kind of money, if you need help getting a Broker Bond, contact us and we will help you immediately.
Do not let the $10,000 Broker Bond prevent you from pursuing a Freight Broker Business of your own, there are different plans to pick from that fit your financial needs.
Hello, Fellow Drivers, Here is a simple breakdown of the steps involved in how to get trucking authority. First I will list the steps in carrier authority. Next blog I will cover broker authority. For further assistance, please email me and I will be happy to answer your trucking authority questions . You can also visit www.truckesandtravelers.com for more in-depth information about trucking authority. Be safe out there.
Trucking Authority
It takes approximately 5 to 7 weeks to complete your authority process from start to finish. There are 2 main steps to completing your authority process: federal and state. Below is a breakdown of the pieces for each step and an explanation of what they are:
Federal – Approximately 16 Business Days to Complete
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MC Number
– Issued by the Federal Motor Carrier Safety Administration (FMCSA), the Motor Carrier (MC) Number is what constitutes authority to cross state lines for hire as a motor carrier. All companies transporting freight for hire are required to obtain an MC Number.
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USDOT Number
– Issued by the United States Department of Transportation (USDOT), the USDOT Number is the main tracking number for your trucking company. The USDOT number registers the number of trucks, drivers, and the safety rating of your company. A USDOT NUMBER DOES NOT CONSTITUTE AUTHORITY.
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BOC 3 Process Agents
– Process agents are people designated in each state that can accept legal documents on your behalf and then return them to you in your home state. BOC 3 Process agents are a requirement to obtaining federal authority.
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Insurance
– A carrier must obtain Liability and Cargo insurance. It is recommended that you obtain a $1,000,000-liability policy and a $100,000 Cargo policy. You will need to obtain insurance within the first two weeks after the MC number is filed to avoid any delays in your authority processing. If you fail to get insurance on file within the first 60 days then your authority application will be dismissed. If you do not obtain insurance within that year’s time, you will have to start the authority process over again and repay all applicable fees.
State
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UCRA
– The Unified Carrier Registration Agreement states that all motor carriers, regulated, exempt, private, interstate brokers, Freight Forwarders and leasing companies are subject to fees under the UCRA. Fees are calculated per company based on the number of commercial motor vehicles it operates. Commercial motor vehicles include the number of trucks, trailers, and power units operated by the company).
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IFTA
– The International Fuel Tax Agreement (IFTA) is for trucks with a Gross Vehicle Weight over 26,000 lbs operating interstate for-hire. All 48 states and the Provinces of Canada participate in the IFTA program. Once registered there will be quarterly tax filings due. You are required to keep track of the mileage traveled in each state and all of your fuel purchases. Some states charge a small one time registration fee to get started but usually it is free.
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IRP
– The International Registration Plan (IRP) is for trucks with a Gross Vehicle Weight over 26,000 lbs operating interstate for-hire. All 48 states and the Provinces of Canada participate in the IRP Program. The IRP covers the apportioned tags for the truck. There is a yearly fee to register and operate your truck in each state or province. The cost is dependent on the miles you run in each state or province for the year. The average cost ranges from $1200 to $1600.
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Simple Permits:
NY, NM, KY, & OR – These states require an extra permit to operate within their borders. Once registered there will be tax filings due based on the miles traveled in each of these states.
- NY charges a $15 per truck registration fee and quarterly reporting of mileage.
- NM charges a $2 per truck registration fee and quarterly reporting of mileage.
- KY does not charge a registration fee, but does require quarterly reporting of mileage.
- OR charges a $2000 cash deposit or security bond to register. The cash or bond will be returned if the carrier stays compliant for the initial 24 months. After registering the carrier is required to file monthly mileage reports.
The first step to starting a successful business involves meticulous planning. Before worrying about minor details, you should sketch out the short-term and long-term goals of your trucking business. How will you handle hiring and logistics? Can you afford to start out with a fleet of trucks, or would it be more financially prudent to start out with just two or three?
By developing a trucking business plan, you can address these and other unique concerns in an organized, rational way. Getting your ideas and plans down on paper helps you to prioritize which tasks need to be addressed in which order. Don’t be afraid to reach out for advice from those who have been in your shoes before. Even the most experienced trucking magnate had to start somewhere.