Avoid Application Errors when Applying for Your USDOT or MC Numbers

All to often application errors lead to extra start up costs, delays and lost income.

Many who contact me through my website LearnToTruck.com or call for an insurance quote have never applied for or had a USDOT (United States Department of Transportation) or MC (Motor Carrier) number before. It is imperative for anyone who wishes to have a USDOT and/or a MC number to be fluent and understand all the different entities and compliance with those entities they will now be required to meet. To help with that, if they have not already hired an “agent” to apply for their USDOT & MC numbers, I always encourage everyone to complete the application themselves. Avoiding fines and penalties from entities such as the FMCSA, IRP, IFTA, UCR, etc. by using the excuse that you didn’t know or the “agent” made a mistake is the same as trying to use the excuse “I didn’t see a speed limit sign” to avoid getting a speeding ticket. Speaking from experience, it’s typically not going to work in your favor. Not to mention the huge amount of money saved by avoiding these “agents.” I have seen these “agents” charge anywhere from $500.00 to $1,500.00 or more in addition to the fees required by each entity just to get started. Then they will point out a supposed need to continue to use their services throughout the year. What they don’t tell you is that it is just as easy for you to complete all the required tasks by giving the exact same information to those entities directly.

Before applying, it’s important to understand that some of the most insignificant or minor errors and/or deceptions can cause some of the longest delays in getting your “Operating Status” to “Authorized for Property” (the most common authorized status for OTR operations). Until your status is updated by the FMCSA you are not compliant and as such can not begin operations. That is to say, you can’t haul loads and generate income. In the Army we had a saying, “fast is slow and slow is fast.” That saying is applicable here as well. When we do things in haste mistakes typically happen. Always review every entry for typos, accuracy and duplications.

Typos – These are most common errors I see. Some are as simple to see and identify, while others are far more difficult to spot.

  1. Misspelling – Auto correct can be our worst enemy. Always verify the spelling of every entry before moving on to the next field.
  2. Punctuation – Whether or not a comma, period, hyphen, etc. is or isn’t present can cause serious headaches.
  3. Spaces – Even a missing or extra space between words or letters can cause some of the biggest headaches to correct. Mainly because they are very difficult to locate.

Accuracy – These are the second most common errors and can be the most time consuming and down right aggravating to correct. They can be an honest mistake or a misunderstanding of what is being asked on the application or they can be deceptions. NEVER be deceptive! It will cause increases in your insurance premium and can potentially be compliance violations. Since accuracy relates to every entry and selection you make, be sure to go slow and double check your work.

  1. Entity Type – “Motor Carrier of Property (except Household Goods)” is the most common entity type. Occasionally an applicant who is hauling new furniture from a manufacture to a warehouse will incorrectly believe this means they are a “Motor Carrier of Household Goods (Moving Companies)” and select the wrong entity type. Be sure to know which entity type is correct for your operation before beginning the application.
  2. DBA (Doing Business as) – This is the most frequent accuracy error and comes in many forms. The best way to avoid DBA errors is not to use a DBA. That said, here are the 3 most common DBA errors.
    1. The DBA should NEVER be the exactly the same as the company name. If my company was “W. Joel Baker, Inc” I may want to use a DBA of “W. Joel Baker Trucking.” If they are the same name some insurance companies will not even provide a quote.
    2. The DBA should NEVER be a second corporation. If my company was “W. Joel Baker Trucking, Inc” and I add a DBA of “Joel’s Express, Inc” that suggests there could be two separate corporations attempting to use this USDOT and/or MC number.
    3. NEVER enter “same,” “same as company name,” “none,” “N/A,” or any other variation. If you are not using a DBA the field must be left blank. ANY entry you put in the DBA field becomes your “Doing Business as” name.
  3. Company Address – This is the most common form of deception. NEVER use a virtual or alternate address as a company address. This is the legal address for the company where all required company records and FMCSA required verifying documents are to be stored, maintained and ready for inspection by any entity such as USDOT, FMCSA, IRP, IFTA, etc.
  4. Mailing Address – Only use a different mailing address if you utilize a USPS PO Box, local UPS store Box, etc. Otherwise you appear to be hiding something or potentially operating as a chameleon carrier. Especially if you are using an out of state mailing address.
  5. HAZMAT – Most generally, this error usually happens by auto transporters. By both those who only haul cars and by those who haul them occasionally. Autos are a class 9 HAZMAT. Class 9 HAZMAT does not require placards but does require more than the standard minimum $750,000.00 in BIPD auto liability insurance filings for those over 26,001 lbs. Auto transporters, even those who only haul cars 2 or 3 times a year, are required to declare class 9 HAZMAT and have $1,000,000.00 in BIPD auto liability insurance.

Duplications – Address duplications happen multiple times a day. Carefully read the address instructions and verify your entry(s).

Some find it helpful to have a few things written down or in a document on their computer before beginning the application. Such as:

  1. Company name with correct spelling and punctuation
  2. If one is desired, a company DBA
  3. Company address (and mailing address if different)
  4. Commodities (cargo) intended to haul
    1. Identify any possible HAZMAT. Both those that require placards and those that do not (class 9).
    2. Choose more than general freight from the list provided by the FMCSA.
    3. If necessary, using the “other” option, specify any type of unique or special cargo that does not adequately fit into one of the choices provided.
  5. Company address (and mailing address if different)

One way to avoid some of the most-common errors could be to be fall back on tried-and-true filing methods, setting aside the convenience and speed of the agency’s online forms in favor of the printed (or pdf version of the) authority application. Manually filling out the printed form, or the pdf version, means someone at FMCSA itself will be directly involved in entering that information into its system’s central registration system. If they introduce errors, the paper trail back to your original form might even save you money on a name change, for instance, if the error can be proven to be theirs and not your own. (Yes, it’s true that some errors you might have to actually pay to correct.)

Once the FMCSA application is complete, it’s highly advisable to request your new USDOT PIN immediately. With that PIN many of the simple errors such as duplications, typos, address, company name, etc. can all be corrected online quickly and fairly easily.

I have seen just as many application errors by “agents” as by those who complete the application themselves. As I mentioned earlier, I always recommend completing all regulatory and compliance responsibilities as possible. By doing so it significantly reduces operating costs while simultaneously educating the new company owner as to all that is involved to operate and be compliant. That education is vital because of the countless bad actors out there who charge for services under the guise of “compliance.” All to frequently it’s more about how to charge the new company for additional services because the new company is unaware of what is and is not required to be compliant.

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Drug & Alcohol Clearinghouse

What Every Truck Owner Needs to Know

The latest FMCSA burden on truck owners is the new Drug & Alcohol Clearinghouse. In an already over regulated industry this new requirement adds yet another hurdle to overcome to be compliant when operating your own FMCSA Operating Authority. All who have an FMCSA Operating Authority are required to participate in the FMCSA Drug & Alcohol Clearinghouse. The FMCSA even went out of their way to single out Independent Owner Operators such as myself.

An owner-operator (an employer who employs himself or herself as a CDL driver, typically a single-driver operation) is subject to the requirements pertaining to employers as well as those pertaining to drivers. Under the Clearinghouse final rule, an employer who employs himself or herself as a CDL driver must designate a consortium/third-party administrator (C/TPA) to comply with the employer’s Clearinghouse reporting requirements (§ 382.705(b)(6)).

Unlike the ELD mandate, there is not a way to avoid this compliance obstacle. You must participate in the Clearinghouse or face the certain consequences that are sure to follow if you do not. To avoid those consequences I strongly suggest creating your FMCSA Drug & Alcohol Clearinghouse account as soon as possible. In doing so you can continue to operate compliantly and not have a target on you for an FMCSA audit. Here is how to get it done.

The first step is to create an FMCSA Drug & Alcohol Clearinghouse account.

Authorized users must register to request access to information in the Clearinghouse. You will need to sign in with a login.gov account to begin your Clearinghouse registration.

On the surface that seems simple enough. However, when you examine the details a little closer you’ll discover that you can’t use your FMCSA login PIN or your USDOT login PIN. In order to create a FMCSA Drug & Alcohol Clearinghouse account you must first have a login.gov account. Once you have created your login.gov account you will be able to continue. As a truck owner with an FMCSA Operating Authority you will create an “Employer Admin” account. If you are an Independent Owner Operator there will be an option to select specifically for Independent Owner Operators. As an Independent Owner Operator, once you have successfully created your Employer Admin account you will want to register as a Driver as well.

The next is to select you Drug & Alcohol Consortium.

Designate Your C/TPA (required)
As an owner-operator, you are required to work with at least one consortia/third-party administration (C/TPA) to manage your drug and alcohol testing program. You will need to designate your C/TPA(s) in the Clearinghouse before they can conduct queries and/or report violations on your behalf.

Once you have created your account as an Employer Admin, you will need to select your Drug & Alcohol Consortium provider from the FMCSA Drug & Alcohol Clearinghouse participating consortiums. This is where you can run into issues. If your Drug & Alcohol Consortium is not listed, they are NOT an approved Drug & Alcohol Consortium. You must contact your Drug & Alcohol Consortium and ask them to register with the FMCSA Drug & Alcohol Clearinghouse or you will need to choose another Drug & Alcohol Consortium provider who is approved by the FMCSA Drug & Alcohol Clearinghouse and compliant.

Lastly, you will be required to purchase a “Query Plan.”

All employers of CDL drivers must purchase a query plan in the Clearinghouse. This query plan enables employers, and their consortia/third-party administrators (C/TPAs), to conduct queries of driver Clearinghouse records.

Registered employers must log into their Clearinghouse accounts to purchase their query plan. Query plans may be purchased from the FMCSA Clearinghouse only.

For Independent Owner Operators, I recommend purchasing the “Flat per query rate ($1.25), for limited and full queries.” It is by far the most affordable and does exactly what you need without over paying.

There are a multitude of other compliancy rules and regulations you must comply with when having your own FMCSA Operating Authority. To learn more about them read my post How to get an FMCSA Operating Authority.

How to get an FMCSA Operating Authority

Deciding to get your own FMCSA operating authority and DOT number is a big step. Most use agents to help them get started. Unfortunately they cost a lot of money. I’m going to share with you all the different regulating agencies and how to contact them. By doing so, I’m giving you the ability to get set up with all of them so you can avoid paying an agent more than necessary. What better way to start your business than by saving money and learning compliancy requirements at the same time! Here are the basic Federal requirements (there are more and I’ll discuss them soon).

1. FMCSA Operating Authority “MC” “FF” or “MX” number

2. Department of Transportation (DOT) number

3. Commercial Insurance

4. *Unified Carrier Registration (UCR)

5. *International Fuel Tax Agreement (IFTA)

6. *International Registration Plan (IRP)

7. BOC-3

* These 3 are frequently done at the same time at your state or jurisdiction office. In most cases you can apply, pay and receive all of them in person and on the same day. It is wise to verify in advance what types of payments your state or jurisdiction will accept as they are all different.

FMCSA Operating Authority “MC” number

The FMCSA website states…

“In general, companies that do the following are required to have interstate Operating Authority (MC number) in addition to a DOT number:

Operate as for-hire carriers (for a fee or other compensation)”

Since the one time fee is only $300.00, I recommend every “For-Hire” carrier to not take any chances or run the risk of operating without having their MC (Motor Carrier) number. It is a fairly simple process and can be done through the SaferSys website (an FMCSA website).

Department of Transportation (DOT) number

I have never seen a truck or met a truck owner that wasn’t required to have a USDOT number. The FMCSA’s website states…

“You are required to obtain a USDOT number if you have a vehicle that:

Is used in transporting material found by the Secretary of Transportation to be hazardous and transported in a quantity requiring placarding (whether interstate or intrastate).

OR

Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater”

and goes on to state…

“AND is involved in Interstate commerce:

Trade, traffic, or transportation in the United States—

Between a place in a State and a place outside of such State (including a place outside of the United States);

Between two places in a State through another State or a place outside of the United States; or

Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.

You are required by FMCSA to obtain USDOT Number and comply with the Federal Regulations.”

The FMCSA concludes with…

“Apart from federal regulations, some states require commercial motor vehicle registrants to obtain a USDOT Number. These states include:

Alabama, Alaska, Arizona, Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, Wyoming”

Obtaining a USDOT number is free. The FMCSA made it convenient to apply for a USDOT number at the same time you apply for a MC number by using the SaferSys website. You will be required to complete and submit the MCS -150 form which defines your business to the USDOT before they will issue you a USDOT number.

Commercial Insurance

Once you have applied for your FMCSA operating authority you will need commercial insurance before your MC number is ready to be used legally. Your insurance company is required to notify the FMCSA once you have purchased your insurance. This process of the insurance company notifying the FMCSA of your policy and the FMCSA updating your MC number with the insurance does take time. Your insurance agent and/or company will be able to provide you with the coverage requirements from the FMCSA.

Unified Carrier Registration (UCR)

The Unified Carrier Registration (UCR) is a registration based on the number of vehicles (trucks) you operate. You can complete your UCR either through the UCR website or many times through your state you operate from. UCR is paid annually.

International Fuel Tax Agreement (IFTA)

IFTA accounts are free and depending on your state or jurisdiction you may or may not pay for the IFTA stickers that are required for each truck in your fleet. I normally start my IFTA account and receive my stickers on the same day I pay for and receive my IRP plates (which I will discuss next). Renewal each year is typically done either on a state or jurisdiction website or by mail. Filing your IFTA taxes is a quarterly requirement.

International Registration Plan (IRP)

The International Registration Plan (IRP) is the registration and license plates for all your vehicles. It is an apportioned registration. Meaning you will pay a portion of each states registration fee based on the percentage of miles you operate in each state or jurisdiction. When you apply for your first IRP you will be required to use “estimated miles.” This does not mean you get to estimate your miles. The estimated miles are provided to you by your state or jurisdiction. In most cases it will be your responsibility to put the correct estimated miles for each state or jurisdiction in the correct field. If it is not correct the IRP official (in most cases) will not fix the mistakes but rather give it back to you and have you fix them. That means going back to the end of the line. I failed to get the correct estimated mileage one time and it took me 3 hours to get back to the IRP official so I could pay my bill and complete my registration.

BOC-3

The BOC-3 is one of the most overlooked requirements by the FMCSA. The reason is simple. There is not a “check and balance” or verification process before being allowed to operate using your new authority. The purpose of the BOC-3 is to provide the FMCSA with a list of agents from the states or jurisdictions you operate in that will receive legal documents. The FMCSA describes it’s purpose this way…

“A process agent is a representative upon whom court papers may be served in any proceeding brought against a motor carrier, broker, or freight forwarder. Every motor carrier (of property or passengers) shall make a designation for each State in which it is authorized to operate and for each State traversed during such operations.”

Now I don’t normally recommend using an agent for much of anything. However, in this case it is best. Otherwise you will need to locate representatives for every state or jurisdiction and continually verify that the representative is still in business. Personally, I have enough to do without calling 50+ representatives every week or 2 to verify they are still in business. Through an agent, a BOC-3 will cost you a 1 time fee of normally no more than $50.00. A list of agents is provided by the FMCSA on their website.

Deciding to get your own FMCSA operating authority and DOT number is a big step. Most use agents to help them get started. Unfortunately they cost a lot of money. I’m going to share with you all the different regulating agencies and how to contact them. By doing so, I’m giving you the ability to get set up with all of them so you can avoid paying an agent more than necessary. What better way to start your business than by saving money and learning compliancy requirements at the same time! Here are the basic Federal requirements (there are more and I’ll discuss them soon).

1. FMCSA Operating Authority “MC” “FF” or “MX” number

2. Department of Transportation (DOT) number

3. Commercial Insurance

4. *Unified Carrier Registration (UCR)

5. *International Fuel Tax Agreement (IFTA)

6. *International Registration Plan (IRP)

7. BOC-3

* These 3 are frequently done at the same time at your state or jurisdiction office. In most cases you can apply, pay and receive all of them in person and on the same day. It is wise to verify in advance what types of payments your state or jurisdiction will accept as they are all different.

FMCSA Operating Authority “MC” number

The FMCSA website states…

“In general, companies that do the following are required to have interstate Operating Authority (MC number) in addition to a DOT number:

Operate as for-hire carriers (for a fee or other compensation)”

Since the one time fee is only $300.00, I recommend every “For-Hire” carrier to not take any chances or run the risk of operating without having their MC (Motor Carrier) number. It is a fairly simple process and can be done through the SaferSys website (an FMCSA website).

Department of Transportation (DOT) number

I have never seen a truck or met a truck owner that wasn’t required to have a USDOT number. The FMCSA’s website states…

“You are required to obtain a USDOT number if you have a vehicle that:

Is used in transporting material found by the Secretary of Transportation to be hazardous and transported in a quantity requiring placarding (whether interstate or intrastate).

OR

Has a gross vehicle weight rating or gross combination weight rating, or gross vehicle weight or gross combination weight, of 4,536 kg (10,001 pounds) or more, whichever is greater”

and goes on to state…

“AND is involved in Interstate commerce:

Trade, traffic, or transportation in the United States—

Between a place in a State and a place outside of such State (including a place outside of the United States);

Between two places in a State through another State or a place outside of the United States; or

Between two places in a State as part of trade, traffic, or transportation originating or terminating outside the State or the United States.

You are required by FMCSA to obtain USDOT Number and comply with the Federal Regulations.”

The FMCSA concludes with…

“Apart from federal regulations, some states require commercial motor vehicle registrants to obtain a USDOT Number. These states include:

Alabama, Alaska, Arizona, Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, Wyoming”

Obtaining a USDOT number is free. The FMCSA made it convenient to apply for a USDOT number at the same time you apply for a MC number by using the SaferSys website. You will be required to complete and submit the MCS -150 form which defines your business to the USDOT before they will issue you a USDOT number.

Commercial Insurance

Once you have applied for your FMCSA operating authority you will need commercial insurance before your MC number is ready to be used legally. Your insurance company is required to notify the FMCSA once you have purchased your insurance. This process of the insurance company notifying the FMCSA of your policy and the FMCSA updating your MC number with the insurance does take time. Your insurance agent and/or company will be able to provide you with the coverage requirements from the FMCSA.

Unified Carrier Registration (UCR)

The Unified Carrier Registration (UCR) is a registration based on the number of vehicles (trucks) you operate. You can complete your UCR either through the UCR website or many times through your state you operate from. UCR is paid annually.

International Fuel Tax Agreement (IFTA)

IFTA accounts are free and depending on your state or jurisdiction you may or may not pay for the IFTA stickers that are required for each truck in your fleet. I normally start my IFTA account and receive my stickers on the same day I pay for and receive my IRP plates (which I will discuss next). Renewal each year is typically done either on a state or jurisdiction website or by mail. Filing your IFTA taxes is a quarterly requirement.

International Registration Plan (IRP)

The International Registration Plan (IRP) is the registration and license plates for all your vehicles. It is an apportioned registration. Meaning you will pay a portion of each states registration fee based on the percentage of miles you operate in each state or jurisdiction. When you apply for your first IRP you will be required to use “estimated miles.” This does not mean you get to estimate your miles. The estimated miles are provided to you by your state or jurisdiction. In most cases it will be your responsibility to put the correct estimated miles for each state or jurisdiction in the correct field. If it is not correct the IRP official (in most cases) will not fix the mistakes but rather give it back to you and have you fix them. That means going back to the end of the line. I failed to get the correct estimated mileage one time and it took me 3 hours to get back to the IRP official so I could pay my bill and complete my registration.

BOC-3

The BOC-3 is one of the most overlooked requirements by the FMCSA. The reason is simple. There is not a “check and balance” or verification process before being allowed to operate using your new authority. The purpose of the BOC-3 is to provide the FMCSA with a list of agents from the states or jurisdictions you operate in that will receive legal documents. The FMCSA describes it’s purpose this way…

“A process agent is a representative upon whom court papers may be served in any proceeding brought against a motor carrier, broker, or freight forwarder. Every motor carrier (of property or passengers) shall make a designation for each State in which it is authorized to operate and for each State traversed during such operations.”

Now I don’t normally recommend using an agent for much of anything. However, in this case it is best. Otherwise you will need to locate representatives for every state or jurisdiction and continually verify that the representative is still in business. Personally, I have enough to do without calling 50+ representatives every week or 2 to verify they are still in business. Through an agent, a BOC-3 will cost you a 1 time fee of normally no more than $50.00. A list of agents is provided by the FMCSA on their website.

Aside from the cost of your insurance and IRP, the entire cost to you should not exceed around $400.00. Many agents charge thousands of dollars. Since I’m always looking to save money and improve my profits, it only makes sense for me to spend a little time educating myself, complete the applications or filings, and saving money at the same time. If you want to learn more check out the category Business of Trucking.

Aside from the cost of your insurance and IRP, the entire cost to you should not exceed around $400.00. Many agents charge thousands of dollars. Since I’m always looking to save money and improve my profits, it only makes sense for me to spend a little time educating myself, complete the applications or filings, and saving money at the same time. If you want to learn more check out the category Business of Trucking.