Starting your own trucking company means learning a new language. From FMCSA filings to IFTA and IRP, you’ll encounter dozens of unfamiliar terms while applying for your trucking authority. This glossary explains the most important terms in the order you’ll typically encounter them.
Start Here: The 10 most important trucking authority terms.
1 Business Setup
Every trucking company begins with a business. Before you can apply for operating authority, you’ll need to decide how your business will be organized and obtain the identifiers needed to operate legally.
Sole Proprietor
A person who owns an unincorporated business by themselves. Income is filed on Form 1040.
Business Plan
A document in which you lay out the current status of your business and your plans for the future. Learn more from TruckingOffice’s series of posts on the process.
LLC
Limited Liability Company, a business structure set up by states for companies. Cost is determined by the state.
EIN
Employer Identification Number, an identification number issued to businesses by the IRS. There is no charge. Apply online.
Now that your business is established, the next step is registering it with the federal government.
2 Licensing and Registration
Once your business is established, it’s time to register it with the appropriate government agencies. These are the terms you’ll see throughout the trucking authority application process.
DOT
Department of Transportation. May refer to the US Department of Transportation (USDOT) or a state’s Department of Transportation. (ODOT – Ohio Department of Transportation)
FMCSA
Federal Motor Carrier Safety Administration. Tasked by the DOT to manage safety concerns in the trucking industry, its primary mission is to prevent commercial motor vehicle-related fatalities and injuries.
USDOT Number
A USDOT Number is a unique identifier for commercial vehicle operators in interstate or intrastate commerce. Most interstate commercial vehicles with a GVWR, GCWR, actual weight, or combined weight of 10,001 pounds or more require it.
GVW, GVWR
Gross Vehicle Weight – The actual weight of the truck alone.
Gross Vehicle Weight Rating (often used interchangeably) is the maximum weight a vehicle is rated by the manufacturer to handle, including passengers and any luggage. This refers to the truck alone, not the trailer or the payload.
GCWR
Gross Combined Weight Rating is the maximum total weight of the truck + trailer + cargo.
MC Number
Identity number of your trucking business license, issued by the US Government. The MC Number (Motor Carrier Number) identifies a for-hire motor carrier operating under FMCSA operating authority. Although FMCSA has begun transitioning to newer registration systems, many truckers still use the term “MC Number.”
Operating Authority
A business license from the FMCSA granting permission to a motor carrier to transport regulated freight for hire in interstate commerce.
Trucking Authority
A common industry term for FMCSA operating authority.
MCS 150
Motor Carrier Identification Report to notify FMCSA of changes to the company record or to complete the biennial update.
Once your registration is complete, you’ll need to file several additional documents before your authority becomes active.
3 Required Filings
After receiving your business identifiers, you’ll need to complete several required filings before your operating authority becomes active.
Insurance
Insurance is purchased to provide financial protection or reimbursement against losses resulting from accidents, injury, or property damage.
| Type | Description |
| BIPD Insurance (also called Primary Liability) | Bodily Injury and Property Damage insurance covering to protect against claims for injuries or property damage caused while driving a vehicle. |
| Cargo Insurance | Insurance to cover cargo during transportation. It covers the shipper’s investment. |
| Physical Damage Insurance | Insurance to cover damage to the trailer due to accidents, theft, or disasters. It covers the carrier’s vehicle and trailer. |
BOC-3
A required FMCSA filing that designates process agents in every state where a motor carrier operates.
Process Agent
Your representative that may receive court documents for your business when you live in a different state.
UCR (Unified Carrier Registration)
An annual registration program that requires many interstate motor carriers to pay fees based on fleet size.
Motus
The new FMCSA platform to serve as a truck company’s contact with USDOT. New truckers use it to apply for USDOT number, operating authority, and other requirements.
With those filings in place, you’re ready to learn about the state registration and fuel tax programs that apply to interstate trucking.
4 State and Fuel Tax Programs
With your authority in place, you’ll also need to meet state registration and fuel tax requirements before operating across state lines.
IRP
The International Registration Plan is a method for consolidating truck registrations with one agency, allowing trucking companies to pay state fees in two filings per year. It eliminates the need for truckers to register in every state or province. IRP allocates and distributes the collected fees based on miles driven over the past 6 months. Truckers are given a cab card and an apportioned license plate to travel through member states/jurisdictions.
| IRP Categories | Descriptions |
| IRP Registration | Purchasing the apportioned plates from the state through their board of motor vehicles. Cost is determined by a variety of factors. |
| IRP Apportioned Plates | License plates for cabs that indicate an IRP registration. |
| Temporary Trip Permit | A short-term permit that allows a commercial vehicle without IRP registration to operate legally in a specific jurisdiction for a limited time. It is not the same as a Temporary Fuel Permit. |
Learn more about IRP and the filing at TruckingOffice’s IRP site.
KY Number
KYU is a tax license issued for all carriers traveling on Kentucky roadways with a combined license weight greater than 59,999 pounds.
IFTA
International Fuel Tax Agreement is a method for paying quarterly fuel taxes once, rather than filing with every jurisdiction your truck passes through. Truck owners have to file quarterly, and failure to do so has severe consequences.
| Term | Description |
| IFTA License | Permission to carry goods across state/province borders. |
| IFTA Decal | An adhesive label for trucks registered with IFTA. |
| IFTA Sticker | The more common name for an IFTA decal. |
| IFTA Audit | An assessment of a trucking company’s IFTA records. |
You can learn more about IFTA, IFTA filings, and IFTA reports from TruckingOffice’s IFTA Resource Center.
After meeting registration and tax requirements, your focus shifts to staying compliant while operating your business.
5 Compliance and Safety
CDL
Commercial Driver’s License, issued by states. Most states require drivers to pass a truck-driving school exam to get this license. Depending on the license and endorsements sought, applicants may also be subject to federal Entry-Level Driver Training requirements.
Electronic Logging Device (ELD) (ELog)
Electronic logging device – often abbreviated to ELD or called an ELog – is a device that tracks a truck’s activities to monitor the driver’s hours of service (HOS). Over time, its capabilities have expanded to GPS tracking, IFTA miles per state tracking, and other uses. You can learn more about ELDs from TruckingOffice’s ELD page.
HOS
HOS is the abbreviation for Hours of Service. Federal HOS rules limit when and how long many commercial drivers may drive and work and establish requirements for breaks and off-duty periods. The rules have been adapted for a variety of circumstances. Consult the FMCSA site for clarity on the rules.
New Entrant Safety Audit
The Safety Audit is an examination to approve a permanent DOT number. When a new trucking company gets its DOT number, it starts an 18-month probationary period where safety and compliance are monitored by the DOT.
Authority Reinstatement
When a trucking authority is revoked for any reason, reinstatement is the process by which the DOT reactivates the DOT number. The cause of the revocation and the fines and penalties must be paid for the reinstatement to be effected.
Revocation
When the DOT retracts the DOT number, thereby eliminating the trucking company’s ability to transport loads. Reasons might include failure to handle DOT paperwork correctly or on time, driver incapacity, or vehicle condition.
6 Operating Your Business
Dispatch
Dispatch can mean either the act of sending a truck to pick up a load or the entire process of moving the freight. Dispatchers may communicate with drivers, brokers, shippers, and receivers to help keep loads moving.
Factoring
A financial agreement between a trucking company and a finance organization to sell the invoice at a discounted amount before it is paid.
Trucking Management Software (TMS)
Trucking management software is a program for managing a trucking company’s operations. It usually includes dispatching and invoicing. It may include maintenance compliance, driver management, statistical analysis of the business finances, and offer integrations with other devices (such as ELD) or software programs. TruckingOffice PRO is an example of a complete TMS.
Finally, let’s look at some of the tools and services that help owner-operators run a successful trucking company.
7 Business Structure and Operating Models
Owner-Operator
A truck driver or small-business owner who owns or leases the truck they operate. An owner-operator may operate under their own authority or lease on to another motor carrier.
Leased-On
A contract between an owner-operator and a transportation company in which the driver provides their own rig and equipment to haul freight. The contract lists the roles of both parties.
For-Hire Carrier
A motor carrier that transports passengers or property for compensation. Depending on the operation, a for-hire carrier may need FMCSA operating authority in addition to a USDOT Number.
Private Carrier
A company that transports its own property as part of its primary business rather than transporting property for compensation as a for-hire carrier.
Commonly Confused Terms
| Term | Not the Same As |
|---|---|
| USDOT Number | MC Number |
| Trucking Authority | USDOT Number |
| GVWR | GVW |
| IRP | IFTA |
| Temporary Trip Permit | Temporary Fuel Permit |
| IFTA Decal | IRP Plate |
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