General freight liability coverage minimum must be $1,000,000 instead of FMCSA’s $750,000 minimum and the truck cargo coverage depends on Gross Vehicle Weight (GVW).
Many U.S. carriers look to increase their load opportunities by getting their Canadian trucking authority but are often confused about what is required to meet Canadian guidelines.
Below we break down what is required to obtain a Canadian trucking authority and what truck drivers need to know before crossing the Canadian border.
Obtain a CBSA Carrier Code
What is a CBSA Carrier Code?
CBSA stands for Canada Border Service Agency and is an organization managing the flow of travelers and trade into Canadian territory.
Before hauling freight into Canada, your company must be setup with the Canada Border Service Agency (CBSA) by applying for a CBSA-issued carrier code, a four-character unique identifier used to identify you as a carrier. The Carrier Code will be used in the PARS (Pre-arrival Review System) and carriers must have printed barcodes available to attach to all bill of ladings (BOLs).
To apply for a carrier code, the first step is to determine if you need a non-bonded or bonded code. Bonded highway carriers are permitted to transport in-bond goods beyond the first point of arrival in Canada and between points in Canada.
Enroll for the Free and Secure Trade (FAST) program (not required)
Although not required, carriers can then apply for the Free and Secure Trade (FAST) program, which is a commercial clearance program designed to ensure safety and security while expediting legitimate trade across the Canada-United States (U.S.) border.
This allows carriers to cross the border with accelerated customs and immigration processing.
Dedicated FAST lanes are located at:
- Sarnia, ON / Port Huron, MI
- Pacific Highway, BC / Blaine, WA
- Fort Erie, ON
- Emerson, MB
- Windsor, ON / Detroit, MI
The FAST membership card for drivers is valid for five years and there is a non-refundable $50 FAST processing fee.
Registration and Insurance Requirements
As a carrier, you will then need to add the regions or states you are crossing to your IRP (CAB Card) with the DMV of your state, as well as adding the specific Canadian province/territory that you will be entering to your IFTA permits.
In most cases, a carrier’s liability, cargo, and reefer insurance should cover what you need to cross into Canada. However, the general freight liability coverage minimum must be $1,000,000 instead of FMCSA’s $750,000 minimum and the truck cargo coverage depends on Gross Vehicle Weight (GVW):
- $15,000 minimum for GVW up to 27,998 lbs (12,700 kg)
- $20,000 minimum for GVW up to 46,296 lbs (21,000 kg)
- $27,000 minimum for GVW up to 81,570 lbs (37,000 kg)
- $32,000 minimum for GVW over 81570 lbs (37,000 kg)
After you have Canadian Authority, carriers will need to apply to the eManifest portal to electronically transmit cargo and conveyance data to the CBSA a minimum of one hour before the shipment arrives at the border.
For drivers to cross into Canada, they will need:
- A valid passport
- Social Security Card
- A clean commercial driver’s license (CDL)
- If applicable, a FAST membership card
Generally, Canadian hours of service, equipment weight and length requirements match closely with the FMCSA. Any equipment/load that complies with FMCSA regulations in the United States will be legal in Canada. Some jurisdictions require permits for long wheelbase tractors pulling 53-ft trailers. Our partners at Compliance Navigation Specialists (CNS) can advise on any DOT compliance requirements you are unsure of.
Roughly one-quarter of all freight hauled in the United States is transported in tanker trucks, and of that, nearly half is petroleum products like gasoline, diesel, and aviation fuel.
Hauling fuel and HAZMAT is a dangerous job.
In a 2016 FleetOwner article, Pinnacle Express vice president, Jim Fox, explains that any breakdowns are a big problem for aviation fuel haulers. If one of the fleet’s trucks has a problem and loses power, Pinnacle drivers are trained to get the truck out of the roadway if they can, even if it damages the vehicle.
“Everybody and their mother are driving down the road doing this now,” says Fox, gesturing with his thumb as if texting or using a smartphone. “I just can’t have my guys there on the side of the road. My drivers are actually trained to have them destroy a tire, a rim, a fender, fuel tank, fuel tank step than sit on the side of the road waiting for repair,” Fox explains. “With what we haul, when we get hit, we tend to leave a smoking crater in the middle of the intersection.”
To keep safety a priority, fuel and HAZMAT haulers can use new safety equipment and best practices that can lower risk and insurance premiums.
The Risk That Surrounds Fuel Haulers
Fleets transporting tanker trucks understand that there are anti-cargo theft and anti-terrorism concerns that drive these loads to be delivered as quickly as possible.
With around 10,000 gallons of fuel in two separate tankers, speed is also balanced with safety requirements. You must be aware of the dangers and constantly be vigilant.
There are a lot of security policies to prevent a terror attack, since it literally is a bomb on wheels. Some policies already in place, include:
- Drivers cannot leave their trucks on lunch breaks
- Drivers can only take lunch in certain areas, and
- Drivers cannot tell anyone where we get the gas from or tell anyone what they are hauling
It is important that the truck is properly grounded to prevent sparks from igniting any vapor as static electricity can build up in the truck when liquid is transferred or simply from the movement of pipes and truck parts.
The biggest risk comes at deliveries because exhaust from other people driving nearby can ignite gas, and people could be walking around smoking. Similarly, no cell phones or other electronics can be near the gasoline either because cell phones can easily ignite gas.
When it comes to obstacles in the road or accidents, drivers have two possibilities: (1) stand on those brakes and stop the truck or (2) hit whatever it is if they cannot stop. Drivers cannot turn the wheel to avoid obstacles because they will roll over, leading to a much bigger problem.
There are 3 main areas of focus for fleets when it comes to safety.
- driver skills
- in-cab technology
Driver Training Reduces Risk
Your road safety approach should focus on driver skills and behavior. Mandatory defensive driving training courses and online training videos teaches safe driving techniques and behavior, with an overall aim of reducing risks.
For example, if driver trainers notice a habit of hard acceleration or hard braking, they should make sure a video training schedule includes driving fundamentals and defensive driving topics.
All custom training schedules should be accompanied by common new driver training, such as reviewing common maintenance and pre-trip inspection training, what to expect during a roadside inspection and how to treat inspectors, highlight drug testing processes and marijuana regulations, seasonal safe driving tips, cargo securement training, etc.
Customized training should also be measurable using quiz assessments to track driver performance. If their assessment score is low, then the training needs to be retaken.
The Right Equipment Reduces Risk
To reduce maintenance costs and roadside breakdowns, many fuel haulers purchase new trucks. These tractors can be on a replacement cycle of 5-7 years and 450,000-500,000 mi.
Trucks can also be fitted with Electronic Stability Control (ESC) systems. ESC anticipates rollovers and loss of directional control, so it can apply brakes on the vehicle in a way that will improve its control.
For example, if a truck is going too fast around a corner and the system perceives that the truck is likely to roll over, ESC can intervene to brake the truck and slow it down.
For trailers, it is recommended that fleets get trailers with disc brakes. Thesetrailers are almost maintenance-free as disc brakes and last three times longer than drum brakes.
The reduced maintenance leads to better Compliance, Safety, Accountability (CSA) scores on maintenance/ shop time.
In-cab Technology Reduces Risk
If your fleet is not using Electronic Logging Devices (ELDs), then using in-vehicle monitoring systems (IVMS) will provide information on driver behavior across a range of areas such as speeding, harsh braking and seat belt compliance and are used to support drivers to drive safely.
Otherwise, most ELDs utilize engine data telematics that can gather and track similar data.
In-cab cameras can also be used with IVMS to coach drivers. Waccamaw Transport, a regional fuel hauler based in Selma NC, deployed a video-based safety program that reduced insurance premiums by 10 percent.
DOT Compliance Programs (PSM)
At CNS, our DOT Compliance Programs focus on Proactive Safety Management (PSM), a mindset that will ensure your fleet’s safety and compliance is always in order and ahead of the FMCSA.
Our PSM Motor Carrier Program includes:
- ELD management
- Driver Qualification File Management
- New driver on-boarding
- Driver safety meetings
- CSA score management
- Policies and handbooks
- Vehicle maintenance
- and more
If you’ve got the vision and desire to start a trucking company, now is the time to make that vision reality. Starting any new business can be expensive and time-consuming. You don’t want to get overwhelmed by the paperwork and documentation before you even pick up a load.
That’s where CNS can help! As a leader in the trucking industry, we’ve helped many trucking startups and know what makes new companies successful. We’ve outlined the basic steps you’ll need to take to start a trucking company.
Our specialists can help you avoid getting bogged down in forms, because we take time to learn about your operation and help you become DOT compliant from the start. We won’t over-sell unneeded items or services that don’t ultimately help you get your business on the road.
Let us help you get started.
Step 1: Make a Detailed Financial Plan
A solid business plan will list expenses and revenue expected in your business. Be sure to include your own salary. Costs involved in a trucking startup include tractors, trailers, licensing, and registration costs. Also include the cost of insurance, and data tracking software and services.
The U.S. Small Business Administration website has downloadable templates to create your own business plan.
Step 2: Decide What Kind of Company You Want To Form
You may want a sole proprietorship, a partnership, or a limited liability company. Each of these has pros and cons, which vary by state.
To own and run a private company in the United States, you’ll need to form a limited liability company (LLC). This is a business structure that combines pass-through taxation (like a partnership or sole proprietorship), with the limited liability of a corporation.
CNS can prepare and file your LLC application with your home state. Or if you want to start a partnership or sole proprietorship, click here.
Step 3: Obtain a Federal Employer Identification Number (EIN)
This unique nine-digit number gets assigned to businesses in the United States by the Internal Revenue Service. Use this number to file your business tax returns.
CNS can obtain your EIN on your behalf. Click here to begin obtaining a Federal EIN.
Step 4: Become Compliant with Trucking Safety Regulations
- Obtain a USDOT Number
First be sure you even need a USDOT number. Obtaining a USDOT Number can be confusing and costly. Here’s where CNS can help by getting your number quickly and accurately. Click here to learn more.
- Obtain a Motor Carrier Operating Authority
Companies are required to have interstate operating authority (MC Number) in addition to the DOT Number if they do any of the following tasks:
- Operate as for-hire carriers (for fee or other compensation)
- Transport passengers in interstate commerce (or arrange for their transport)
- Transport federally regulated commodities in interstate commerce (or arrange for their transport)
CNS can file for your MC Number at the same time we apply for your DOT Number.
- File a BOC-3
A BOC-3 is a required United States filing that activates your Motor Carrier Authority. This filing assigns legal agents in the event court papers ever need to be served to your company by an outside state. It is required before federal operating authorities can be granted in the U.S.
CNS, unlike many of our competitors, does not charge an annual fee for a BOC-3 filing.
- Know the Heavy Use Tax (HUT) States
You may need to apply for further credentials if your company drives in the following states:
- New York
- New Mexico
- Plan to File Heavy Highway Use Tax (2290)
A trucking startup needs to be aware of special tax codes and procedures in accordance with State, District of Columbia, Canadian, and Mexican law. When a vehicle has a taxable gross weight of 55,000 pounds or more, the company has to electronically file a HVUT Form 2290.
Once this is filed, you will need to get a stamped copy of your Schedule 1. Companies are required to file all taxable highway motor vehicles registered in your name during the tax period when the truck first operated.
CNS can file your Schedule 1 with the IRS and provide you a stamped E-File copy. Click here to learn more.
- Secure a Unified Carrier Registration (UCR)
The Unified Carrier Registration (UCR) program requires ALL carriers (private, exempt, or for hire) to register their business with a participating state and pay an annual fee that is based on the size of their fleet.
Brokers, freight forwarders, and leasing companies also are required to register and pay a fee, unless they are also operating as a motor carrier.
CNS can complete your UCR filing after you obtain your DOT number. Click here to learn more.
- Get an International Fuel Tax Agreement (IFTA) Sticker
This agreement is between the lower 48 states and Canadian provinces and it simplifies reporting of fuel use by motor carriers operating in multiple jurisdictions. Alaska, Hawaii, and Canadian territories do not participate.
An operating carrier with IFTA receives an IFTA license and two decals for each qualifying vehicle. The carrier files a quarterly fuel tax report. This report determines the net tax or refund due and redistributes taxes from collecting states to states where it is due.
- Obtain an International Registration Plan (IRP) Sticker
This registration gives reciprocity between the United States and Canada without the need for additional registrations. Under this Plan, only one license plate and one cab card is issued for each fleet vehicle.
Step 5: Become Compliant with the FMCSA
Great job! Taking these steps gives you DOT and Operating authority. Now you need to become compliant with the FMCSA. These items need to be maintained through the year.
CNS has reliable, cost-effective packages that keep you compliant and up-to-date.
Step 6: Obtain the Correct Insurance
Different types of insurance are available and often required to cover certain aspects of your trucking company.
- Primary Liability – After applying for an MC Number, you will need to post liability insurance with FMSCA. You must carry at least $750,00 in primary liability coverage to cover damages or injuries from at-fault accidents.
- Cargo Insurance – This insurance covers damage to the freight and/or theft.
- Physical Damage – Provides coverage for truck damage when you are not liable.
- Non-Trucking Use (Bobtail) – Covers liability in accidents that happen when you’re not hauling a load for someone else.
CNS partners with premiere truck/passenger insurance agencies to obtain the best coverage at affordable rates. Click here to learn more.
Step 7: Use a Driver Qualification File (DQF) Service
Trucking companies need to keep impeccable records in the event of an audit. Physical or electronic driver files allow you to pull an MVR report, look at previous employer inquiries, PSP reports and more.
CNS has solutions to keep your Driver Qualification Files up to date with regulations and ready to help you pass an audit. All of our driver files are monitored by actual DQF specialists to ensure documents don’t expire. We communicate personally about soon-to-expire materials to avoid computer overlooks. Click here to learn more.
Step 8: Join the Mandatory Drug and Alcohol Consortium
Anyone holding a Commercial Driver’s License needs to have a pre-employment drug test and be enrolled in a DOT drug and alcohol consortium.
CNS offers a low-cost, DOT-compliant service that covers DOT random testing through the year. Our service gives you a secure portal to track test results. We also have personal representatives to call when you have questions. Click here to learn more.
Step 9: Install a Compliant Electronic Logging Device
Per a 2017 Electronic Logging Device mandate, non-exempt carriers are required to install an FMCSA-registered and compliant electronic logging device.
Today’s ELDs can actually help you grow your business. ELDs offer many fleet management features like diagnostic tools and advanced reporting. With their reports, you can maximize your fleet efficiency and simplify your operations.
Step 10: Make Your Trucking Startup a Reality
We at CNS are excited for your new venture to become reality. We’re here to help you navigate the path towards starting a trucking company.
Our services and compliance specialists are on hand to get you up and running as quickly as possible.
What can fleet managers do to encourage positive driver behavior?
Since most interstate trucking companies were required to add electronic logging devices (ELDs) to their trucks, back-office management has been given an opportunity to better manage their vehicles and drivers when it comes to violations, driving habits, audits, maintenance, and more.
ELD or telematic data management for trucking, construction, distribution industries, or corporate fleets should be formatted to highlight both efficiencies and deficiencies in simple customizable reports.
The best-practice telematics data management plan will measure the data over time to show trends and measure results. This is as simple as a Driver Scorecard for your fleet.
Create a Driver Scorecard from ELD data
ELDs gather millions of data points that include dates, time, longitude, latitude, engine power status, odometer, engine faults, critical events data, harsh braking, hard turning, hard acceleration, HOS violations, idling, speeding, and more.
Many ELD providers, including our partner Pedigree Technologies, have created driver and safety scorecards that are easy to set-up, manage, and pull reports.
For example, Pedigree driver and safety scorecards include stats, such as:
- # of HOS violations
- Idling > 20min
- Idling %
- Hard Braking event
- Speeding > 5mph
- Fuel Efficiency
- Heavy Acceleration event
These scorecards are point-based starting at 100 points and any selected stat can remove a certain amount of points based on the severity of the stat you are including in the scorecard. They can be customized further by adding a timeframe duration of the stat or distance traveled.
For example, a driver can lose 15 points for every time a hard-braking event happens every 100 miles, or a driver can lose 5 points for any Hours of Service Util. % is under 75% per day.
Scorecard reporting can be customized by timeframe (the previous 7 days or month), selected vehicle or vehicle types (semi/long-haul trucks, medium-sized trucks, construction vehicles, etc), and more.
The Pedigree ELD reporting tool also shows if the driver has performed better or worse over the previous week or month.
Does your ELD provider offer similar reporting tools? If not, learn more about Pedigree Technologies.
Further ELD Questions? Get a Free DemoContact us with any questions. Our ELD specialists can perform a demo with our ELD devices.
Use telematics data for customized video training
Using the telematics reports or driver scorecards can highlight which drivers are struggling in a given area.
For example, the driver scorecard can highlight a habit of hard acceleration and hard braking for one driver, while another driver has a habit of various HOS violations.
These red flags can immediately give the driver a defensive driving, fuel efficiency, HOS regulations, or driver ELD training in their video training schedule.
Customized training should also be measurable using quiz assessments to track driver performance and the ELD driver scorecard can be monitored for improvement after the training was completed. If their training assessment score is low or the habit continues, then the training needs to be retaken or a driver performance review could be scheduled.
Using telematics for driver incentive programs
Implementing ELD data management offers a range of cost-savings to your fleet, including decreased HOS violations and fines, decreased time spent by management monitoring driver behavior, decreased driver turnover or improved driver retention, and decreased risk of crashes and possible lower insurance premiums.
These savings can be given back to drivers through a driver incentive program.
Creating an incentive program around positive behavior has been shown to work for many fleets. Have your team discuss the various behaviors you want to reward and be creative on different ways to reward the good behavior.
For example, if a driver consistently has a great driver scorecard, or has shown improvement over time, the driver can receive a $50 gift card or add an hour of vacation time. The ideas here are endless.
Even a small investment to the driver’s benefit can go a long way.
If your fleet has a disciplinary policy, you can use the driver scorecard to measure clear expectations while drivers are on the road and what steps will be taken should a driver diverge from the policy.
Need help managing your ELD data?
Managing ELD data yourself can be confusing and stressful, and requires a much different back-office skill set than managing paper processes.
However, it does not have to be.
Whatever ELD system you have, we can manage it for you so you can start taking advantage of your ELD data.
What are CSA scores?
CSA stands for compliance, safety and accountability. CSA scores are a system used by the Federal Motor Carrier Safety Administration (FMCSA) to identify high-risk motor carriers.
How are my CSA scores calculated?
Your CSA scores are based on multiple factors called Behavioral Analysis and Safety Improvement Categories or “BASIC” categories. Roadside inspection violations, as well as investigation results, fall under 1 of 7 categories, including:
- Unsafe driving – moving and parking violations, such as speeding, improper lane changes, no seatbelt, cell phone/handheld device use, improper parking, etc.
- Crash indicator – DOT reportable crashes (injury, towaway or fatality)
- Hours of Service (HOS) compliance – falsifying your record-of-duty status, inadequate paperwork for ELD, driving, on-duty and rest break violations
- Vehicle maintenance – mechanical issues and not making required repairs
- Controlled substance/alcohol – driving under the influence
- Hazardous materials compliance – unsafe or incorrect handling and/or documentation of hazardous materials, including improper or inadequate placards
- Driver fitness – Unfit to drive due to physical health or lack of training (sickness, no medical card, driving a vehicle you are not qualified to drive (i.e.- tanker with no ‘N’ endorsement, etc.)
Each time you get a violation, depending on the category and severity of the violation, points are added to your CSA scores, and range from 1 to 10 (less to more severe).
The “safety scale percentages” (CSA scores) in each category are compared to other motor carriers with similar registration information and range from 0 to 100 percent. You want your percentage or CSA score to be as low as possible. For example, a 5% score in “vehicle maintenance” means that your company is safer than 95% of motor carriers on the road.
The chart below lists some of the top unsafe driving violations that will affect your CSA scores.
|Driving a CMV while texting||10|
|Speeding: 15+ mph over limit or in construction zone||10|
|Speeding: 11-14 mph over limit||7|
|Driving a CMV without a wearing a seatbelt||7|
|Failing to obey a traffic control device||5|
|Following too close||5|
|Improper lane changes, turns, or passing||5|
|Failing to yield right of way||5|
|Having or using a radar detector||5|
|Speeding: 6-10 mph over limit||4|
|Having unauthorized passengers||1|
Insurance premiums are a major contributor to trucking companies having to close their doors. As premiums increase, they will eventually get to the point of being unaffordable, causing many trucking companies to go out of business.
For this reason, it is important to note that receiving a warning for one of the above violations can still affect your insurance premiums. Just because you did not receive a ticket does not necessarily mean you are in the clear. In other words, a driver vehicle examination report, which is what an officer uses to report CSA violations, can be issued without a citation.
What do my CSA scores mean?
Your CSA scores are used to identify you as a safe driver or a high-risk driver, which can help or hurt you and your carrier in several ways.
- Insurance rates – The higher your CSA scores, the higher your insurance premiums, and the lower your CSA scores, the lower your insurance premiums.
- DOT audits and roadside inspections – The lower your CSA scores, the fewer compliance checks you will have, including DOT audits and roadside inspections.
- Clients – CSA scores are public and can be seen by current or potential clients. If you want to maintain or grow your client base, keep low CSA scores.
- Drivers – Having good CSA scores can help you retain current drivers and recruit new drivers. Good drivers want to work for a company that is safe.
How to check my CSA scores?
The FMCSA’s Safety Management System (SMS) website makes all data available and is updated on a monthly basis. To check the full details of your CSA scores, you will need your DOT number and your DOT pin number. This allows you to see “ALERTS,” which are a determining factor of FMCSA audit selections and are issued when a percentage score is over the limit for what the FMCSA considers safe.
Without your DOT PIN number, you cannot see percentage scores or ALERTS, as this information is not public, only the “raw data” is public. Your PIN is on the top left of your “New Entrant Audit” letter from the FMCSA. If you have this letter, it is important that you write down the DOT PIN.
If you do not know your DOT PIN number, contact us and we can retrieve it for you from the FMCSA for a very small fee.
If you drive under your carrier’s DOT number, your CSA score and any violations would be under their DOT.
How can I lower my CSA scores?
You can improve on your CSA scores by putting a system in place to check the BASICs regularly. Determine what categories you need improvement in and put training in place to improve in those particular areas.
Roadside inspections with no violations also cause your scores to lower faster. Violations will reduce in “severity” after 6 months, 13 months, and then are removed from your CSA record completely after 2 years.
If your CSA score is low, you can maintain it by hiring drivers with good PSP scores (the FMCSA pre-employment screening program, includes MVR information and all CSA violations a driver has had for 3 years), providing adequate on-board and recurring training, internal inspections, regular preventative vehicle maintenance, using an ELD solution to avoid maintenance violation, and consequences to drivers who receive violations.