If you are starting a trucking company in the United States, you probably know that there is plenty of paperwork involved. Before any trucking company can begin operations, they need to go through certain steps. If a truck moves cargo across state lines, it will need interstate trucking authority. This means they will have to get a letter of authority from the Federal Motor Carriers Safety Administration. The FMCSA is the entity within the Department of Transportation that regulates the trucking industry.
If a trucking company only operates within one state, it will be considered an intrastate motor carrier, and the federal government will not regulate the company as closely.
Simplex Group can help you with every aspect of FMCSA compliance. We have 20 years of experience in the trucking industry.
When you set up a trucking company, you will have to hire drivers, buy trucks, obtain insurance, and advertise yourself to potential clients. Before you can do any of those things, you will have to obtain the authority to run a trucking company.
How Does My Authority Process Application Work?
There are different rules for companies that carry interstate commerce and those that carry intrastate commerce. A company that carries cargo from state to state is considered an interstate carrier. They will have to obtain a DOT number and sign up with the Unified Registration System. They will also have to attain a motor carrier number before receiving an authority letter allowing them to operate.
Simplex Group partners with both interstate carriers and intrastate carriers to ensure that they have motor carrier authority and are compliant with all motor carrier laws.
What Your Intrastate Authority Package Will Include
There are a few basic things we include in every authority package. When you call us, we will put the perfect package together for you.
Incorporation Services for Intrastate Trucking Companies
Whenever people decide to start a business, they must decide what kind of business entity they will start. There are 4 types of business entities:
- Sole Proprietorship
- Partnership
- Limited Liability Company (LLC)
- Corporation
A sole proprietorship is an individual acting as a business, and a partnership is more than one person acting as a business. They take full financial responsibility for their business debts. The trucking industry is very complex. Trackers carry hundreds of thousands of dollars across the country. No trucking company can ever be a sole proprietorship or a partnership.
A professional trucking company must be a Limited Liability Corporation or a corporation, even if you are just an intrastate operator. An LLC is a separate financial entity. Hence, an individual who owns an LLC cannot be sued for that LLC’s debts. It offers a level of protection to owners. It does not require as much paperwork as setting up a corporation. There are not as many formalities in setting up this type of business. It can be hard to get investors if you set up an LLC instead of a corporation, and the taxes can be complicated.
A corporation absolves an owner of any responsibility for debts. You will pay fewer taxes on your own salary, and you will be eligible for tax breaks. You will have a corporate structure with officers, which adds credibility to your company.
Simplex can answer questions that will help you decide between an LLC and a corporation. We will then take care of all of the paperwork for you with your state.
Federal Tax ID Application
Once you have decided on the right kind of entity for your business, you will need a tax identification number for the IRS. An EIN is like a Social Security Number for a business. You will not be able to operate without it. We will make sure your application is filled out properly, and you get your tax number before you open your doors.
DOT Number Application
If a company carries cargo or passengers across state lines, it will have to obtain a USDOT number and pay a USDOT application fee for your vehicles. If it is strictly an intrastate operator, you may think it does not need a DOT number. Although you are not officially under the DOT’s Jurisdiction, there are over 30 states that require intrastate truckers to have a DOT number.
Authority Letters
Companies that cross state lines need federal carrier compliance registration. They will register proof of insurance for all of the different types of cargo they hall. They need an authority letter to begin operations.
The trucking authority process is a bit different for intrastate companies. You will still need owner-operator trucking insurance. You will not need an authority letter from the DOT to begin operations. However, different states have different laws. You will have to have an authority letter issued by the state in which you operate. In some cases, you may have to pay separate filing fees for the different trucks in your fleet based on the cargo that you haul.
When we partner with intrastate trucking companies, we will research the laws in your state and find out if authority letters are required. We will find out what paperwork and registration is necessary for opening a trucking business in your state. We will put together a trucking authority package that will include everything you need to operate.
Process Agents
Every business in the United States must list a processing agent, which is also known as an agent for service. A processing agent is someone who receives important paperwork on behalf of a company. The government must have the name, address, and title of the person or business listed as the processing agent. The address you list must be where the agent is available during business hours.
You must list a process agent in every state in which you operate. If you hire a company, such as Simplex Group, that has physical locations in multiple states, you can simply list the corporate name and address as your agent for service. A national process agent can save you time and money.
Simplex Group offers trucking authority packages for companies of every size and circumstance. In addition to taking care of all of your paperwork, we can help you with commercial trucking insurance, workers’ files, and recording hours of service.
Advantages of Operating as an Intrastate Carrier
A professional motor carrier can make good money hauling things from state to state. You may wonder why a trucking company would choose to operate exclusively within their own state. However, there are many advantages to operating an intrastate trucking company or simply adding a few intrastate trucks to your fleet.
Your Drivers Will Stay With You Longer
Driving a big rig for 10 or 11 hours at a stretch and sleeping in a berth is not as much fun as it sounds. Drivers have families that they want to see at night. If your hauls are intrastate, your drivers may be able to work shorter hours and see their families every day or at least several days a week. You will have far less turnover if you run this type of company.
Fees Will Be Lower and Less Confusing
Interstate truck drivers not only have to go through a complicated interstate authority application process, but they are also subject to more government regulations. They will have to pay local costs for meals and occasional lodging wherever drivers go.
You will need more liability insurance if you are an interstate operator. Interstate operators have to pay taxes that intrastate operators do not. A truck that travels from state to state will have to pay state fuel tax, and they will need tax permits for different states. They will be subject to state weight and mileage taxes. Oregon and New Mexico have notoriously high weight distance taxes.
An interstate trucking company will not have to go through the Unified Carrier Registration. Designing lanes is much easier for a local motor contract carrier.
Why You Should Hire Us
Simplex Group is staffed with independent trucking authority experts. Our specialty is helping new trucking companies obtain the best authority package possible. We make sure the companies we partner with are compliant with safety regulations and ready for their audit.
Whether you want a basic or premium package, we will consider your specific needs. Your package will include upfront operating authority costs. We know that you do not need to be surprised by hidden expenses.
We want your company to be successful, and we want you to have time to run your business. Give us a call for the perfect intrastate authority package.