So you want to "own " your own company

Kevomrviiio
I can't even understand that you're considering dealing with this guy! My first advice is to talk to a lawyer, (one who is knowledgeable in the trucking industry). Secondly, like others have said here, he should be willing to be fully open and disclose whatever you need. If he is not willing to show you his license then that is a BIG sign that he is trouble. And don't just assume if he does give you his license that it is still valid. Call the issuing state and verify that it is still a valid lic., and has not been revoked. Call his previous employer. But mostly run away from this guy as tactfully as you can, (since you said he is a friend).
If you're not knowledgeable in this industry, and it is obvious from your post that you're not, you setting yourself up for a real bad day. New 2010 regulations require so much that you just quite frankly have no clue on, that you will most likely be heavily fined, and also will most likely end up getting sued for whatever this guy does. And if despite some opinions here, being incorporated does not protect a single owner, from financial Liability if the corporation is sued.
Do you have a drug program, documentation for it, do you have insurance, and do you have a documented training program? Will he be an employee, or a contractor? Are you gona carry workers comp on him, or issue 1059's?

In regards to his language capabilities. The company that I work for currently, has a loading dock and often receives a product from a regular carrier. But we don't have a ramp, so we have to use a fork lift. There is quite often a driver who shows up, and when he does, they come get me because I speak a little bit or Russian. This guy speaks no English. I asked him how he got his license, and he said he memorized the signs, and the English phrases that are associated with them.
My advice, stay away from this guy, and stay out of this business, you don't have the experience to be in it.

 

i have some questions with the operating authority and starting the business? please help any info is greatly appreciated!

my husband and i have been owner operators for seven years for a small family owned company in texas. we have worked running texas only. we have decided to get our own authority, since this company is not able to keep us busy any more.

ok here's our deal. we want to do INTRASTATE COMMERCE ONLY IN TEXAS. But i have spoken to some brokers and their requirements for hauling their loads is to provide them with a us dot # and mc # and insurance of course. i explained to them i was exempt from motor carrier # since i was intrastate, they said they still need it. The fact is the i could not get the mc # as intrastate and had to file for interstate. i already have the us, mc and tx dot number. still waiting on the mc to be active. i filed them myself.
now i am not going to be running interstate, and i dont want to file for the ucr, ifta and have to do the audit. i've been told that once my us and mc is active that i can switch the us to intrastate and that way i will not have to comply with the other requirements mentioned.
Questions
1. if i switch my us to intrastate, what is going to happen to my mc number? , will it show pending, will it be cancelled after the 18 months period? do i still have to go through the audit and have to register for the ucr and ifta?

2. i have the insurance and since i will be for hire what can i tell my insurance i will be hauling since it will be different things. everytime? we only want to haul non hazardous materials, and we'll be pulling a dry van. they want me to list them, but i dont even know exactly what it'll be till i find the load, we want.
What is additional insured? or why do they want to be listed as certificate holder. does that affect me in any way?

3. i only have texas base combination plates. i have it registered for 80k lbs and im paying 2290. i know some day i will be stuck in a place where i cant find a local load will have to got out of state. i have been told that i can buy the trip and fuel permits for the state im going to. but some tell me that if a dot stops me on the other state without the ucr i will get fined. is that true? isnt the trip permit enough?

those are my main concerns. also if you can provide me with information on what is really factoring, any good brokers you might recommend. thank you guys for your time and information.

THANKS

 

Some carriers use factoring as a means to increase cash flow without accumulating debt. When you haul a load you can send the bills to a factor. They will pay you for the invoice, less their discount, and collect the freight bill from the broker or shipper. There are two types of factoring: Recourse and non-recourse. Recourse is where the factor accepts the receivable and attempts to collect the bill from the broker or shipper. If he fails to collect within a certain time then he charges it back to you. The longer the customer takes to pay the higher the percentage the factor takes. Non-recourse is where you sell the receivable to the factor and they accept total responsibility for collecting the money. If they fail to collect, then they cannot charge it back to you. Non-recourse factors charge a higher rate, but you don't have to worry about anything being charged back to you. Many companies factor receivables.

JB Hunt, Schneider, Landstar, PTL and a few others offere power only programs for those with their own authority. You pull their trailers. All will also offer brokered freight for those who do have their own trailers. CH Robinson has a lot of freight. Big Bear, TA Services are a couple of brokers who get freight in your area. Some brokers want you to have been in business for at least 6 months to a year before doing business with you. There are a lot of brokers. I would be sure to check any of them out closely before doing business. If you only want to run Texas then you need to find brokers who mostly have Texas freight. It usually takes time to build relationships. You could subscribe to some of the loadboards and get a better idea of who has the freight you want to haul.

 

Thank you g/man. Your information is very helpful.

with regards with the ifta? How does it really work. How much does it cost. I kinda have an idea but im not sure if im right.

If im burning all the fuel in texas i wouldn have to pay right?
What happens if i buy fuel here and go to louisiana and arkansas they dont have fuel taxes? If i buy here in texas and go to oklahoma will they reimburse me, since its cheaper than texas? Im not really sure how it works?

 

You have to apply for your IFTA account. IFTA is short for International Fuel Tax Agreement. Most states participate, including Texas, but a few don't. There should not be a charge for setting up an IFTA account. When you set the account up you will be given 2 stickers for each truck running under your authority. You should be able to get your IFTA account set up at the same time you get your truck registration changed to run under your authority.

Everyone who has an IFTA account is required to keep a record of all miles driven in each state and all gallons purchased in each state and report them to IFTA each quarter. If all your miles and fuel purchases are in Texas, then you should not need to pay anything at the end of the quarter as long as you file in a timely manner. And filing will be a breeze. You should keep routing information for each load in case you are audited. You will have 30 days from the end of the quarter to file your fuel taxes. The first quarter just ended in March. Fuel taxes are due by the end of April.

If you buy all fuel in Texas, but have miles in Louisiana, Arkansas or any other state, then you will likely have some taxes to pay when you file. You won't know for sure until you file your taxes. The way IFTA works is that if you buy too much fuel in one state for the miles you run, then you will have a credit which can be used in other states. The fuel taxes for the three states are similar, so you could have enough credit to offset the extra miles, but could have a small amount to pay for not purchasing any fuel in those states. I rarely pay more than about $25/quarter per truck. You will learn how to plan fuel purchases to minimize your tax bite. Sometimes it is less expensive to buy in the cheaper fuel states and pay the additional tax. You don't want to buy most of your fuel in Oklahoma due to their lower fuel tax and how they do their taxes in OK. Sometimes the cheapest fuel can cost more than the higher priced fuel in another state.

Each state has a different fuel tax rate. When you calculate your fuel taxes, the first thing you will need to determine is your mpg. These are calculated by figuring the total number of miles run and gallons of fuel purchased during the quarter. In most cases, your calculated mpg will be less than actual, due to how they have us do the calculations. As long as you keep your records straight, it should not be too time consuming to do the fuel taxes. If you keep your records up to date, you should be able to complete your fuel taxes in 1-2 hours at the end of the quarter. You might consider buying software that is trucking specific to help keep your records up to date. There are some decent programs around. Or, you could use a spreadsheet. In fact, you could do everything manually and put them in a ringed composition book. Regardless of the method you use, it is critical to keep records straight. You may even want to find a bookkeeper or accountant to help who is familiar with this industry.

 

Angleface, do not be that concerned about the audit if you get interstate. All the big things that will get you in trouble - pre-employment drug test, participate in random drug program, insurance, etc. - you should have already done before you drove mile one under your own intrastate authority.

Yes you can get trip permits if you run outside TX for IFTA but that will be more expesive than just getting IFTA tag to start with.

In most states the biggest expense is the plates. Not sure what you pay in TX but to add some surrounding states may actually be cheaper than just TX plate.

And yes, while it does not make a lot of sense, most brokers will not work with you if you do not have an active MC#. Not being on that side if the business I am sure that it has something to do with systems they use to check on your authority. I was going to try and run a couple weeks in IL before my MC became active and out of a couple dozen calls I found one broker that would work with me. Just the game we are in.

Good luck

 

You seem to have a lot of concerns about the new entrant audit. It can actually be helpful to new entrants. The main reason they started doing audits on new carriers is to make sure that you are doing everything properly. This audit is a freebie. You are not supposed to have any fines for your initial audit. If they find anything that is wrong and it is not correct should they do a later audit, then there could be fines. I have spoken to several people who have gone through the new entrant audit and most have found them to be helpful. As long as you have the basics in order you should not have a problem.

I don't think that they want to go after the ones who make honest mistakes. It is the chronic rule breaker and those who operate by the seat of their pants they want to target.

 

I had my audit just about a year ago and was prepared. Don't sweat it. Like GMAN said, it can be helpful. They're not out to get you, they just want to be sure you're doing it right.

 

do you actually log all the miles driven in each time you are entering a state or do you calculate them based on the loads hauled?

 

I track all miles, empty and loaded.