December 16, 2013 4:00 AM, EST

Opinion: ‘New Entrants’ Beware

This Opinion piece appears in the Dec. 16 print edition of Transport Topics. Click here to subscribe today.

By Jud McVey

General Manager

1&Done Agency

Everyone whose dream of heaven is driving an 18-wheeler across the country with a trailer packed full of goods both there and back first must pass through red-tape hell.

The life of a “new entrant,” as the Federal Motor Carrier Safety Administration calls anyone getting a motor carrier operating authority, begins with wanting to work for yourself instead of someone else. But the learning process can be a hard road to travel, and some companies offering to help new entrants with compliance aren’t what they claim to be.

As a new entrant, you’ll begin by filling out applications at FMCSA’s website for a Department of Transportation number (MCS-150) and motor carrier authority (OP-1).

Not long after you push “enter,” your phone will ring. The caller will represent a compliance service that appears to have government affiliation and wants nothing more than to help you — for a fee.

I spent many years in the “compliance” sector of the transportation industry, the realm of “third-party administrators” and “outside service providers.” Despite the impression they may give, these individuals are not affiliated with FMCSA or DOT. And while I believe there are many honest companies providing much-needed, competitive services, others hide their true nature behind a mask that should be flashing “Buyer beware!”

Remember how quickly your phone rang? FMCSA and DOT do not call new entrants.

They have a hard enough time keeping up with the 350 new DOT numbers and 150 motor carrier numbers issued every workday.

Compliance companies continuously scour FMCSA’s website for information about new entrants. When it’s posted, they pick up the phone. And because it’s public information, the calls are legal.

Some compliance companies have strayed so far into the dark side that they have names with DOT or FMCSA in them and callers who openly portray themselves as government officials or agents, telling new entrants they must purchase the company’s programs to be compliant with regulations.

Make sure you know to whom you are speaking and completely understand what they are saying and selling. Don’t be afraid to ask questions, or you could wind up spending all your money buying things you don’t need, led there by callers who generally are young people reading from a script — telemarketing as usual, but cloaked with false authority.

The only two items you’ll need to get your authority are:

BOC-3, the blanket of coverage — A motor carrier must have a legal address in each state in which it travels, and the companies filing it must be registered with FMCSA. Ask your caller if his company is so registered. A list of companies holding authority from FMCSA to file BOC-3s on behalf of new truckers is available at www.fmcsa.dot.gov.
Insurance filing — The lack of this, more than anything else, keeps authorities from being granted. Any company applying for an authority must have the issuing insurance company post that insurance with FMCSA. Many agents will sell you insurance, but if the issuing company does not do the “federal filing,” your policy is useless.
There also are companies that will sell substandard insurance and file it with FMCSA, but no reputable broker will accept it. New entrants must expect to pay a little more; insuring new companies is risky.
Buying things you won’t need until after the authority is granted is wasted money if you are turned down. After the operating authority is granted — and not until then — expect to deal with:
Unified Carrier Registration — This annual tax/registration can be purchased directly from the government at www.ucr.in.gov for $79.
International Fuel Tax Agreement — Each state wants its share of the fuel tax, and figuring it out can be tedious. Be wary of companies offering to reconstruct your route from your logbooks. Keep a trip log showing mileage within the states and all your fuel receipts.
State permits — Four states require permits for traveling through them: New York, Kentucky, New Mexico and Oregon. All can be done online through the issuing state, and the permits are mostly free. You also may get “trip permits” for those states if you pass through them only occasionally. Be careful of overpriced offerings for these permits.
Consortium/drug and alcohol testing: This is the most prolific of all the phone calls, and it probably is a safer bet to let someone handle this aspect of your business. Just ask questions and go with the company that best suits your needs.
The pre-employment drug test is the only item needed prior to your running.
Driver qualification files: You need these set up to pass your safety audit. They do not contain personal background checks. The only check is of previous employment (if you drove a truck for them). They are simple, and the forms can be found at www.fmcsa.dot.gov.

There are plenty of other services companies will be glad to manage for you such as logbook auditing and safety audit consulting. Some are, in my opinion, more of a sales “scare tactic” than an actual service. One of the biggest scams now involves threatening e-mails, faxes and phone calls that seem official and request immediate payment for supervisor training and the MCS-150 updates due every 24 months. These scams are primarily conducted by foreign companies very difficult to locate, let alone prosecute.

And even if they are apprehended, by tomorrow another company will have come up with yet another way to get at your hard-earned cash and detour that dream of the open road.

1&Done Agency LLC is a private insurance company based in Glastonbury, Conn., that deals in property and casualty insurance and is licensed to operate nationwide.