Here are some tips for a new authority, and for making sure you’re around to use it.
By Kevin Jones
The Trucker Staff
Louisville, Ky. – Sometimes, especially in a show famous for bigger-is-better corporate presentations and announcements, a simple voice talking about what customers want to hear is a good way for a smaller exhibitor to get the word out.
And even though he contends his customer service reps wearing grass skirts and handing out leis proved a hit, one trucking insurance agent took time off from his booth at the Mid-America Trucking Show to host a seminar with the provocative and daunting title, “Covering Your Assets: Surviving the First Year.”
The aim, said transportation manager Josh Hancock of Hancock & Associates, Inc, is to write more business, of course. But, when it comes to trucking, all too often new business won’t be repeat business because so many new companies just don’t make it beyond the first 12 months.
Faced with a choice of win-win or lose-lose, Hancock said helping truckers to keep the financial wheels turning is the obvious route.
“If 10 of you start your own trucking company,” Hancock told about 70 people who attended his seminar, “a year from now, only five or six will be left – the question is why. The answer is money.”
To be specific, the lack of it. What truckers typically don’t understand or anticipate, Hancock explained, is how long it can take to get the federal authority to operate a commercial vehicle.
“They know how to get in a truck and drive and make a good living doing that – but when it comes to starting a company, they need help,” he later told The Trucker.
The object of the seminar was straight forward: how to cut through the red tape before too much red ink gets spilled. He said it typically will take three to six weeks for approval, though the delay can into months if the appropriate “i”s aren’t dotted and “t”s crossed.
“The sooner the wheels get turning, the better off you’re going to be,” Hancock said. He suggested a nest egg to cover six months of truck payments and insurance premiums, which average between $6,500 and $8,500 a year – though individual policy costs, like gas mileage, may vary.
Among the factors that go into an underwriter’s assessment of an insurance, Hancock said, are where trucks are going to run and what they are hauling.
As to the former, he noted that policies to cover drivers who run in big cities like New York, L.A., or Miami should expect to pay more because of the actuarial risk.
Likewise, he said beginners often make the mistake when filing for a new authority of checking every box on the anticipated freight list – a big no-no.
“If you’re not going to haul coal or garbage or air mail, don’t include it on your registration,” he said.
He went on to explain how in depth – and how public – commercial transport companies’ records are.
“We can just about tell you what size underwear you’re wearing,” he said, referring to the Federal Motor Carrier Safety Administration’s Safety and Fitness Electronic Records (SAFER) System.
In addition to cautioning drivers to make sure to run clean with a new authority, he also had some advice specifically for experienced owner-operators looking to add trucks to their own small companies.
“You, know how to be safe, but who are you putting behind the wheel? Hancock said. “Keep in mind, that driver is representing you.”
A bad wreck by a questionable hire – and the resulting claim – will pretty much guarantee, when it comes time to renew, the insurance will be hard, if not impossible, to come by.
And new equipment is always better than old, from an insurance underwriter’s view – commercial trucking, after all, is a business and not a weekend hobby.
“That rig may be your baby, but your going to get a lot of declination” if you’re running an older model tractor, he added.
But provided a copy for readers of The Trucker in the meantime.
THIS CHECKLIST HAS BEEN REVISED TO STAY CURRENT WITH CONSTANTLY CHANGING LAWS.
This checklist assumes you have already created your business identity (sole proprietor, corp, LLC, partnership, ect.):
1. FIRST OBTAIN YOUR USDOT NUMBER AND MC (MOTOR CARRIER) NUMBER. VISIT WWW.AUTHORITIESDIRECT.COM FOR A SPECIAL INTERNET PRICE FOR YOUR AUTHORITY.
2. OBTAIN YOUR BOC-3 PROCESS AGENT FILING.
AUTHORITIES DIRECT OFFERS THIS FILING AS PART THE ICC PACKAGE. THIS FILING IS REQUIRED.
3. IMMEDIATELY SHOP FOR TRUCK INSURANCE. THIS WILL MAKE EVERYTHING ELSE HAPPEN SOONER! WE HAVE A TEAM OF TRUCK INSURANCE SPECIALISTS AVAILABLE TO QUOTE THE MOST COMPETITIVE PRICES IN THE INDUSTRY. COMMON FEDERAL FILINGS NEEDED ARE THE BMC-91X (PROOF OF PRIMARY LIABILITY) AND BMC-34 (PROOF OF CARGO INSURANCE). COMMON STATE FILINGS INCLUDE THE FORM E AND FORM H(for Household Goods Haulers) THESE TYPES OF FILINGS ARE OFTEN REQUIRED WITH INTRASTATE REGISTRATION.
4. ORDER YOUR NEW MEXICO WEIGHT DISTANCE PERMIT. THIS CAN TAKE 3-4 WEEKS TO OBTAIN.
5. ONCE TRUCK INSURANCE HAS BEEN PUT IN PLACE, AND APPROPRIATE FILINGS REQUESTED FROM THE INSURANCE COMPANIES, ENSURE THAT YOU ARE COMPLIANT WITH THE IFTA (INTERNATIONAL FUEL TAX AGREEMENT) REQUIREMENTS. YOU WILL NEED AN ASSIGNED NUMBER, AS WELL AS TO MAKE ARRANGEMENTS FOR SOMEONE TO PREPARE/FILE THE QUARTERLY MILEAGE REPORTS (OR TACKLE THEM YOURSELF). THE IFTA IS OFTEN SOMETHING CAN BE ACCOMPLISHED AT THE DEPARTMENT OF MOTOR CARRIERS FOR YOUR STATE. MANY MOTOR CARRIERS WILL DO THIS WHEN THEY GO TO GET THEIR APPORTIONED PLATES AND REGISTRATION.(IRP, International Registration Plan)
HAPPENS NOW? IT WILL TAKE 3-5 DAYS FOR YOUR INSURANCE FILINGS TO POST TO
YOUR MC NUMBER ON THE FMCSA’S LICENSING & INSURANCE WEBSITE.
ONCE THESE FILINGS POST, IT NORMALLY TAKES FMCSA 5 TO 7 BUSINESS DAYS TO APPROVE YOUR AUTHORITY. THEY WILL SEND YOU A LETTER STATING THAT YOU ARE AUTHORIZED TO ENGAGE IN INTERSTATE COMMERCE.
7. HOWEVER! THIS DOES NOT MEAN YOU ARE FREE TO RUN YET. YOU MUST COMPLETE ANY ADDITIONAL REQUIREMENTS THAT YOUR BASE STATE HAS SET FORTH. IN ADDITION TO THE INTERSTATE AUTHORITY, YOUR STATE MAY REQUIRE THAT YOU HAVE AN INTRASTATE AUTHORITY IF YOU ARE HAULING GOODS (ORIGINATION AND DESTINATION) WITHIN THE STATE LINES.
THIS SERVICE IS ALSO PROVIDED BY AUTHORITIES DIRECT IN ADDITION TO THE INTERSTATE AUTHORITY FOR A VERY FAIR PRICE. EACH STATE IS DIFFERENT AND CAN BE CONFUSING, SO BE MINDFUL, USE A CHECKLIST OR HAVE A SERVICE PROVIDER DO IT FOR YOU.
9. SSRS/UCR REGISTRATION: AS THE LAWS ARE IN THE PROCESS OF REPLACING THE OLD SSRS(SINGLE STATE REGISTRATION SYSTEM) WITH THE NEW UNIFIED CARRIER REGISTRATION SYSTEM(UCR). YOU WILL NEED TO CHECK TO SEE WHAT YOU NEED TO DO TO BE COMPLIANT. THE STATES WILL NORMALLY SEND OUT NOTICES TO ALL ENTITIES EFFECTED TO ADVISE THEM OF THE PROCEDURES THAT NEED TO BE FOLLOWED TO BE COMPLIANT. DO NOT IGNORE THIS REQUIREMENT.(IT COULD BE A LIGHT SWITCH FOR YOUR COMPANY.(ON, OR OFF).NOT ALL STATES PARTICIPATE IN THE NEW UCR SYSTEM.((AS PREVIOUSLY, WITH SSRS) SO IF YOUR STATE DOES NOT PARTICIPATE, YOUR ARE STILL REQUIRED TO COMPLY WITH EACH NON-PARTICIPATING STATE.
10. IT TAKES A LITTLE MORE THAN 10 EASY STEPS TO START A TRUCKING COMPANY. I LEFT OUT DETERMINATION (BULL-HEADEDNESS), STRONG WILL TO SURVIVE (PERSISTENCE), AND PATIENCE. THE FIRST YEAR SEEMS TO BE THE TOUGHEST. KEEP YOUR HEAD UP, TRY TO KEEP YOUR CLAIMS/ACCIDENTS TO A MINIMUM, AND WATCH THOSE SPEEDING TICKETS. ALL OF THIS WILL CALCULATE AN INSURANCE PREMIUM WHEN YOUR RENEWAL COMES UP. YOU MAY ALSO WANT TO CONSIDER FACTORING YOUR INVOICES. VISIT OUR WEBSITE FOR ADDITIONAL RESOURCES.
THIS CHECKLIST WILL HELP GIVE YOU A MINIATURE “BUSINESS PLAN”, SO TO SPEAK, WHEN TRYING TO ACQUIRE THE AUTHORITY TO ENGAGE IN INTERSTATE COMMERCE WITH THE FEDERAL MOTOR CARRIER SAFETY ADMINISTRATION (FMCSA).
Josh Hancock is actively involved as President and consultant for Hancock & Associates, Inc
Josh is founder of www.authoritiesdirect.com (Rapid Response ICC Authorities Direct) He also serves as founder of www.contingentcargo.com (a resource for the freight broker community), www.nyhut.com (Rapid Response New York Highway Use Tax permits), www.kyu-number.com (Kentucky weight distance tax numbers) www.freightforwarderinsurance.com ( a resource for the Freight Forwarder Community.
For more info email Josh at email@example.com