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Working as an interstate carrier or broker requires motor carrier (MC) operating authority. However, since there are many types of MC numbers you can apply for, new entrants to this industry may need clarification to determine the correct trucking authority. Therefore, using a third-party compliance company helps you determine the right type of trucking authority for you.
What is MC Trucking Authority?
Operating authority, also called motor carrier (MC) authority, gives trucking companies the legal authorization to get paid to transport goods across state lines using the trucking company and its vehicles. This authority is granted by the Federal Motor Carrier Safety Administration (FMCSA).
There are multiple forms of trucking authority, including broker authority, which grants permission for a business to facilitate loads between shippers and carriers. Once carriers or brokers obtain the right type of operating authority, the FMCSA will issue a unique motor carrier (MC) number, which is used to prove the legality of the operations.
All trucking companies that cross state lines, including owner – operators, will require their own operating authority. It’s important to distinguish between the MC and USDOT numbers, both of which are issued by the FMCSA and are required to legally operate the trucking business. While the MC number provides the authority to operate legally across state lines, the DOT number monitors a company’s safety information, including safety audits, compliance reviews, inspections, and crash investigations.
What Are the Types of Operating Authority?
The two most common authority’s the FMCSA issues are, carrier authority and broker authority. The FMSCA allows you to apply for both at the same time and under the same DOT number but your insurance company will require you to separate them out. Make sure you are using a knowledgeable compliance company when filing your authority. The FMCSA does not issue refunds for applications that request the wrong type of operating authority. Selecting an incorrect option can be costly.
Motor Carrier of Property (except Household Goods)
This authority is the most common and is for carriers that haul general freight. Motor carriers of property must file proof of public liability insurance, including bodily injury and property damage, with the FMCSA to secure interstate operating authority. However, obtaining insurance is done after you file for your motor carrier number during a required 21-day protest period. During this period, you must provide proof that you have the minimum required level of insurance to the FMCSA to complete the process and secure your motor carrier authority.
Motor Carrier of Household Goods (moving companies)
This operating authority is for an authorized for-hire motor carrier that transports only household items for the general public in exchange for payment. Household goods are defined as personal items that will be used in a home and include items shipped from a factory or store if purchased with the intent of using them in the home and transported at the request of the person’s household. A household goods motor carrier also includes companies that, in the ordinary course of business of providing transportation of household goods, may also provide the following services: binding and nonbinding estimates, inventorying, protective packing and unpacking of the goods at personal residences, and loading or unloading at private residences. The FMCSA requires that the company file proof of public liability and cargo insurance to obtain interstate operating authority (also done during the 21-day protest period).
Broker of Property (except Household Goods)
This operating authority is required for any individual, partnership, or corporation that receives payment for arranging the transportation of property other than household goods belonging to others by using an authorized motor carrier. Brokers do not assume responsibility for the property and never take possession of it.
Broker of Household Goods
This operating authority applies to any individual, partnership, or corporation that receives payment for arranging the transportation of household goods belonging to others using an authorized motor carrier. But, again, the broker does not assume responsibility for or take possession of the goods.
United States-based Enterprise Carrier of International Cargo (except Household Goods)
This authority is needed by companies that transport international cargo, excluding household goods, and is headquartered in America but owned or controlled by a Mexican citizen or resident alien. In addition, international cargo must originate in or terminate in a foreign country.
United States-based Enterprise Carrier of International Household Goods
This authority is needed for companies that transport household goods internationally and are headquartered in the United States but owned or controlled by a Mexican citizen or resident alien.
Freight Forwarder Authority
Freight forwarder authority grants the holder to arrange transportation of goods by authorized carriers for interstate or foreign commerce. Freight forwarders issue bills to shippers and are responsible for the loss of or damage to any goods.
These motor authorities represent the most common motor authorities sought by trucking companies. Less common trucking authorities may also include:
- Motor Passenger Carrier Authority
- Non-North America-Domiciled Motor Carriers
- Mexico-Based Carriers for Motor Carrier Authority to Operate Beyond US Municipalities and Commercial Zones on the US-Mexico Border
- Mexican Certificate of Registration for Foreign Motor Carriers and Foreign Motor Private Carriers under 49 U.S.C. 13902
In addition to the proper authority, there are many other filings and services that you will need to run a profitable trucking company. Contact a team of professions to walk you through this process, and ensure your success!
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