You Got Your Authority – What Now?
As a new business owner in any industry, you’re guaranteed to face many hurdles and roadblocks, some of which may seem impassable. This is especially true of the trucking industry. But take comfort in the fact that you’re already here, doing the research necessary to prepare for the challenges you’ll face in your chosen industry.
So, you’re a smart, motivated owner-operator who decided to eliminate the middleman, step up, and maximize your profits by obtaining your own authority. Congratulations, there’s an exciting road ahead! You’ve done the heavy lifting necessary to get your motor carrier authority, but the work is far from over. Now you have to determine the wisest steps to move your business forward.
We’ll address a few challenges and simple realities you’ll likely encounter, and in addition, discuss ways you can prepare for them.
Many brokers won’t let new authorities haul their freight.
Yeah, you read that right. Forget about your 10 years of driving experience and five years of savings, you’re going to need 6-12 months of history hauling loads you won’t get from your major brokers. The good news is that this doesn’t apply to all brokers, and the better news is that Porter has dispatching consultants to help you tell the two apart.
As inconvenient as 6-12 months of operation under your new authority may be, many brokers require this in order to guard against scammers who churn MC numbers. A word to the wise: be wary of brokers who jump to work with you without asking at least a few questions about your new authority, and prepare your own professional summary in answer to common questions you’re asked. Some experienced owner-operators recommend a three-part approach to this challenge:
- Don’t give up – keep searching for good brokers, and make sure you check the references and credit of brokers who will work with you.
- Do your best when hauling for those brokers, and then ask to use them as references.
- Do you research before your MC number goes active by calling brokers who post in your lanes and asking to be set up as a carrier for future loads.
Equipped with a list of references, a summary of your experience, and a drive to sell and succeed, you should be able to gradually begin obtaining loads through other brokers. Some may still hesitate to use new authorities, but staying the course and maintaining a good work ethic can often get you in the door.
Another option that can certainly be effective is to contact reputable, established carriers who also have a brokerage authority. These asset-based brokerages often have overflow freight they committed to haul and no available company trucks to take the loads. In these cases, you can start developing relationships with carriers who will continue to call your business for overflow loads if you do good work for them.
A new entrant audit is required within your first 18 months.
Owning a new business, understandably, comes with some significant responsibilities for record keeping. You need to be prepared for a mandatory new entrant audit, which will take place within your first 18 months of operating. The records you need to keep may include: maintaining files for driver qualifications, safety records, HOS logs, accident reporting, fuel expenses, and vehicle maintenance records. Pro tip: make sure your logs line up with the times and locations of your repair and fuel receipts. Mismatched receipts are a surefire way to bust a log book. You’re also required by federal regulation, as a motor carrier, to enroll in a drug and alcohol testing program and to maintain all records and reports for your company. Each and every one of your drivers must be properly drug tested!
Insurance down payments are due upon renewal at one year.
You knew insurance would be included in the start-up costs for your business, and you’ve come to terms with the necessity of paying between $10,000 and $20,000 a year, with down payments ranging from $1,500 to $4,000 (20%-25% of your premium). So, you’re all set, right? Not quite. One of the biggest challenges you will probably deal with in your first year is your cash flow. Knowing that additional down payments will be due at your one year renewal is imperative to helping you build a long term plan.
Freight factoring is a great way to keep your annual down payment from sneaking up on you. Having immediate access to your payments with Porter’s recourse and non-recourse factoring helps your company roll into year two without hiccup. We’ve been helping businesses like yours for over 25 years, and we’re here as an experienced partner who actually cares to see you succeed in this industry.
IFTA taxes are due quarterly.
This requires tracking the miles and how much fuel you purchase in each state. Do you have a fuel management system, or will you be digging fuel receipts out of your glove box? With everything else you have to keep track of as an owner-operator, the last thing you want is to build more hurdles for yourself. There are ways to simplify your life, and neglecting to do initial research for organizing records isn’t one of them. Our fuel card offers easy reporting for IFTA and can help make this part of being a business owner pretty painless.
In fact, Porter Billing Services wants to help equip smart, motivated new business owners like you to make each challenge you face as painless as possible. Our experienced team is here to partner with you for the road ahead.
For additional information fill out our contact form, or call 1-877-385-8265.