Truckload rates for flatbeds, refrigerated and dry vans are at record highs right now and are expected to remain historically high next year as we ease out of pandemic and online shopping stays at record levels and businesses are stocking back up.
This demand, as well as drivers getting out of the independent contractor mess, has led to a record 59,000 authorities being applied for by new motor carriers in 2020 and this year looks no different as around 51,000 motor carriers have already received carrier authorities.
Avery Vise, FTR’s vice president-trucking, who presented findings during a company webinar last week, said “the applicants were not driver newbies, but company drivers who have gone out on their own or owner-operators that had been working under a lease arrangement with larger carriers but became fully independent either voluntarily or after being cut loose during 2020 when the COVID-19 pandemic shut down much of the nation’s economy.”
While many of these new carriers have driving history, going on your own brings a new set of complications to become successful.
How To Start Off On The Right Foot
To receive your authority, you must have insurance on file. To avoid paying for insurance coverage you do not yet need, talk to your insurer to have it become effective approximately two weeks into the start-up process.
Getting your own operating authority is usually a straightforward process but there are many steps needed before and after you get your authority, which will take 21 days or more to get approved. We can assist you with each step individually or as part of a full compliance program which we will discuss more in a moment.
The following are some if the items you will need to complete:
- Register for a company name
- Obtain a Federal Employer Identification Number (EIN)
- Obtain insurance
- Set up IFTA and mileage tax accounts
- Obtain intrastate authority, if applicable
- Obtain Hazmat permits, if applicable
- File the Unified Carrier Registration (UCR)
- File the IRS Heavy Vehicle Use Tax
- Establishing driver qualification Files, equipment maintenance schedules, and equipment files
- Pass your first annual vehicle safety inspection
When you are ready to start moving freight, cash flow is often a problem because it may take 45 to 60 days before getting paid for your first load. It is best practice for new carriers to have operating capital to sustain your business for up to two months.
As a new entrant, it is required to follow Department of Transportation (DOT) regulations and they will want to see some established records and processes during your New Entrant Safety Audit that will happen within the first 12 months of operation to complete the New Entrant Program.
Motor carriers should not delay responding to the DOT auditor because ignoring their requests—especially the “no contact letter” or “demand letter” for scheduling an audit—could lead to fines of up to $10,000 and/or suspension of their operating authority.
Compliance Navigation Specialists is an industry leading compliance company that will help you stay in compliance and help provide records you will need to keep your commercial insurance rates as low as possible.
Our safety management programs are perfect for combining multiple services and focuses 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
Do you still need commercial trucking insurance?
It never hurts to get a quote and try saving money on your insurance premiums. Give our sister company Norther Insurance Specialists a call anytime to discuss getting a quote.
Before we can get you an estimate, we are going to need some information.