Operating authority in the trucking industry refers to the official federal permission required to legally transport regulated commodities or passengers across state lines for compensation. This authorization establishes the legal standing of a carrier to operate as a commercial enterprise within the United States. The Federal Motor Carrier Safety Administration (FMCSA) is the regulatory body responsible for issuing and enforcing this requirement. Obtaining this designation ensures compliance with federal safety and economic regulations governing interstate commerce.
Understanding Operating Authority and the MC Number
The regulatory framework involves two primary identifiers. The United States Department of Transportation (USDOT) Number is a unique registration required for all commercial vehicles used in interstate commerce, regardless of whether they are for-hire or private. This number functions as a tracking mechanism, allowing the FMCSA to monitor a carrier’s compliance review scores, safety data, and inspection results.
The Motor Carrier (MC) Number represents the actual operating authority that grants the legal right to engage in compensated, interstate transportation of property or passengers. Unlike the USDOT Number, the MC Number is specifically required for carriers that haul goods belonging to others across state lines for payment, defining them as a “for-hire” entity. Without an active MC Number, a carrier cannot legally solicit or accept loads requiring interstate movement.
Different Types of Motor Carrier Authority
Operating authority is issued in several categories tailored to the applicant’s business model. The Common Carrier authority grants permission to haul general commodities for the public for compensation under a continuous offer of service. This carrier must file tariffs and is responsible for the full legal liability of the cargo it transports.
The Contract Carrier authority permits a company to haul property for compensation under specific, ongoing contractual agreements with select shippers. Carriers operating under this authority do not offer services to the general public but tailor them to meet the needs of their contracted clients.
Entities that arrange transportation without physically hauling the freight must obtain Broker Authority. This designation allows the holder to connect shippers with authorized motor carriers. The Freight Forwarder authority is required for companies that assemble and consolidate small shipments from various shippers into larger, single shipments transported by a motor carrier. Each authority type dictates the liability insurance, bond requirements, and compliance obligations the business must satisfy.
Determining if Your Operation Requires Authority
The necessity of obtaining MC Operating Authority depends on whether the operation is classified as “for-hire” or “private.” A Private Carrier is a business hauling its own goods, materials, or equipment within its own operations, such as a construction company moving its machinery. These carriers generally only require a USDOT Number to track safety performance, as they are not compensated for the act of transportation itself.
Any operation engaged in For-Hire carriage—transporting property belonging to others for compensation across state lines—must secure the appropriate MC Authority. Exceptions exist for operations that exclusively remain within a single state (intrastate commerce), which are governed by state-level regulations. Certain agricultural or defined “exempt commodities” may also not require MC authority, though the USDOT number is usually mandatory.
Essential Prerequisites for Obtaining Authority
Before submitting the formal application, a prospective carrier must satisfy legal and financial security requirements. The most significant prerequisite is the Proof of Financial Responsibility, which ensures the carrier can cover potential damages or losses incurred during operations. Property carriers must file evidence of liability insurance coverage, typically using the BMC-91 form, with minimum coverage varying based on the commodity and vehicle weight.
Carriers seeking Common Carrier authority must also secure Cargo Insurance, filed using the BMC-34 or BMC-84 forms, assuring compensation for loss or damage to the freight. Broker and Freight Forwarder applicants must file a surety bond or trust fund agreement, evidenced by the BMC-84 or BMC-85 form, which guarantees payment to carriers and shippers.
The Designation of Process Agents is another mandatory step, accomplished by filing the BOC-3 form electronically with the FMCSA. This requires the carrier to name a representative in every state where they operate. The process agent serves as the official legal contact who can be served with court papers or legal notices in the event of a lawsuit or claim against the carrier, ensuring accountability.
The FMCSA Application and Approval Process
Once the prerequisite insurance and process agent filings are ready, applying for operating authority involves submitting the OP-1 application form to the FMCSA. This application collects detailed information about the business structure, ownership, and the specific type of authority requested. A non-refundable filing fee, currently $300 for each authority type requested, must be paid during submission.
Upon submission and payment, the application enters a mandatory 21-day protest period. During this time, other motor carriers or interested parties can formally object to the granting of the new authority, typically based on fitness or safety concerns.
Authority is not immediately granted after the 21-day period expires. The FMCSA reviews the status of the required insurance and BOC-3 filings, which must be officially submitted and accepted into their system. Only after the protest period concludes and all necessary documents are processed and linked is the new operating authority officially issued and made active.
Ongoing Compliance and Authority Maintenance
Securing operating authority is an initial step, but maintaining it requires continuous adherence to federal safety and administrative standards. All carriers must biennially update their registration information by filing the MCS-150 form. This form verifies details like the number of vehicles operated and the types of cargo hauled. Failure to complete this update on schedule can result in the deactivation of the USDOT Number and subsequent loss of operating authority.
Carriers must maintain a satisfactory safety rating, monitored through roadside inspections and compliance reviews, often beginning with a new entrant safety audit within the first eighteen months. The required liability and cargo insurance filings must be kept current and active with the FMCSA at all times; any lapse results in the immediate suspension of the MC Number. The Unified Carrier Registration (UCR) is an annual requirement obligating carriers to pay a fee based on the size of their fleet.