1. Decide what kind of transportation company you are
Before you fill out federal or state forms, get clear on your basic business type:
- Owner-operator (O/O) – you own at least one truck and drive it yourself.
- Asset-based carrier with drivers – you own trucks and will hire or contract other drivers.
- Freight broker (non-asset) – you arrange freight between shippers and carriers but do not operate trucks.
Some businesses are both asset-based and a brokerage. If that’s your plan, you’ll need to meet requirements for both carriers and brokers.
2. Build your business foundation
These steps apply to almost every transportation business, regardless of size or role.
2.1 Choose a business structure
Talk with a CPA or attorney about whether you should form an LLC, corporation, partnership, or operate as a sole proprietorship. The right choice affects liability, taxes, and how you pay yourself.
2.2 Register with your Secretary of State
Register your entity and any “doing business as” (DBA) or assumed business names with your state’s business filing office. Search for your state’s business portal (often under “Business Services” or “Corporations”).
2.3 Get an EIN
Apply for a federal Employer Identification Number (EIN) from the IRS.
You will use this on banking, insurance, FMCSA, tax, and payroll forms.
2.4 Open a business bank account
Use your entity paperwork and EIN to open a business checking account. Keep personal and business funds separate from day one.
2.5 Sketch a simple plan
You don’t need a long business plan, but you should know:
- Where your freight will come from (load boards, brokers, direct shippers).
- Which lanes or regions you want to run.
- How many trucks and drivers you are starting with.
- Whether you’ll be leased to another carrier or operating under your own authority.
3. FMCSA registration and operating authority
Most transportation businesses that operate commercial motor vehicles or arrange interstate freight must register with the Federal Motor Carrier Safety Administration (FMCSA).
3.1 Understand your FMCSA role
FMCSA’s “Getting Started” guide explains which registrations apply to:
- For-hire motor carriers (you haul for others for pay).
- Private carriers (you haul your own goods).
- Brokers (you arrange transportation but do not operate trucks).
- Freight forwarders and other specialized roles.
3.2 Use the Unified Registration System (URS)
New applicants usually use the FMCSA Unified Registration System (URS) to apply for:
- A USDOT Number (identifies your company as a motor carrier or registrant).
- Operating Authority (MC/FF/MX) for for-hire carriers and brokers, as needed.
3.3 Carrier authority vs broker authority
Owner-operators and carriers:
- Need a USDOT Number if operating commercial motor vehicles.
- Need Operating Authority (MC) if for-hire and hauling regulated commodities across state lines.
Brokers:
- Generally obtain Broker Authority through FMCSA.
- May not need a USDOT Number if they do not operate vehicles.
3.4 BOC-3 process agent filing
Most carriers and brokers must designate a process agent in each state using a BOC-3 filing. This is usually done through a BOC-3 or compliance service, which files electronically with FMCSA and gives you documentation for your records.
3.5 Insurance and surety bond
Carriers (O/O and carriers with drivers):
- Must maintain minimum public liability insurance and, when required, cargo coverage.
- Your insurance company files proof of insurance with FMCSA electronically.
Brokers:
- Must maintain a surety bond or trust (commonly referred to as the “$75,000 broker bond”).
- Multiple bonding companies specialize in FMCSA broker bonds (BMC-84/BMC-85).
3.6 New Entrant Safety Assurance Program
New carriers enter FMCSA’s New Entrant program and must pass a safety audit in their first year. The audit reviews your records, policies, and compliance with safety regulations.
4. Safety, drivers, and compliance
These requirements apply to motor carriers that operate commercial motor vehicles. Pure freight brokers do not manage drivers or vehicles but must ensure they use compliant carriers.
4.1 Driver qualification files
You must maintain a Driver Qualification (DQ) file for each driver operating under your authority, including yourself if you are an owner-operator.
- Driver application and employment history.
- Motor Vehicle Records (MVRs) and annual MVR reviews.
- Previous employer safety performance history (where required).
- Medical examiner’s certificate (med card).
- Road test certificate or equivalent documentation.
4.2 Drug and alcohol testing
If you employ CDL drivers in safety-sensitive positions:
- Establish a DOT-compliant drug and alcohol testing policy.
- Enroll in a testing consortium/third-party administrator (C/TPA) for random tests, if needed.
- Perform pre-employment, random, post-accident, reasonable suspicion, and return-to-duty testing where required.
4.3 FMCSA Drug & Alcohol Clearinghouse
Carriers that use CDL drivers must register with the FMCSA Drug and Alcohol Clearinghouse and:
- Run full queries on new CDL drivers before hiring.
- Run at least annual limited queries on existing CDL drivers.
4.4 Hours of Service (HOS) and ELD
Understand the federal Hours of Service rules and when an Electronic Logging Device (ELD) is required. Know which exemptions (if any) apply to your operation.
5. Vehicles, inspections, and maintenance
As a motor carrier, you are responsible for keeping your vehicles in safe operating condition and maintaining required records.
- Ensure drivers perform pre-trip and post-trip inspections and report defects.
- Correct safety-critical defects before the vehicle is operated.
- Maintain maintenance and inspection records for each unit.
- Comply with any required annual inspections and documentation.
6. Fuel tax, IRP, and permits for multi-state operations
If your qualified vehicles operate across state lines, additional registration and tax programs apply.
6.1 International Registration Plan (IRP)
IRP allows you to register in one base jurisdiction and apportion registration fees across all states and provinces where you operate. Your state’s commercial vehicle or IRP office administers this.
6.2 International Fuel Tax Agreement (IFTA)
If you operate qualified vehicles (generally 26,000+ lbs or with three or more axles) in multiple jurisdictions, you will usually need:
- An IFTA license and decals from your base state.
- Quarterly IFTA returns that report miles driven and fuel purchased by jurisdiction.
6.3 Unified Carrier Registration (UCR)
Most interstate carriers and some brokers must register annually and pay fees under the Unified Carrier Registration (UCR) program.
6.4 Temporary trip and fuel permits
If you are not yet set up under IRP or IFTA but need to run across state lines, you may be able to use temporary trip and fuel permits. Many permit services can arrange these for specific trips.
6.5 Oversize and overweight permits
If your vehicle or load exceeds normal size or weight limits, you must obtain oversize/overweight permits from each state where you will travel. State DOT websites provide requirements, routes, and escort rules.
7. Money, bookkeeping, and taxes
Regardless of your company type, you need a solid handle on money and recordkeeping.
- Keep a dedicated business bank account for revenue and expenses.
- Use bookkeeping software or hire a bookkeeper/CPA.
- Track revenue by load/customer and track expenses (fuel, repairs, insurance, permits, rent, software, etc.).
- Track miles by state if you are subject to IFTA.
You may need to file:
- Federal and state income tax returns for your business.
- Payroll tax returns if you have employees.
- Sales/use tax returns if applicable in your state.
- IRS Form 2290 (Heavy Vehicle Use Tax) for qualifying vehicles.
8. Tools and templates you can download
- A U.S. transportation startup checklist (PDF) with sections labeled for O/O, carriers, and brokers.
- A driver file checklist (PDF) for carriers and owner-operators.
- A maintenance and inspection checklist for equipment.
- A fuel and mileage log (spreadsheet) for IFTA recordkeeping.
- A broker startup checklist focusing on broker authority, bond, contracts, and carrier vetting.
9. Where a TMS like TruckMaster fits in
You can run a small operation with spreadsheets and notebooks for a while. Over time, a transportation management system (TMS) can make things easier and more accurate by centralizing:
- Load and dispatch management.
- Billing and receivables.
- Driver and carrier settlements.
- Accounting & General Ledger.
- Driver / Employee Payroll.
- Safety and HR.
- Brokerage Management.
- Maintenance reminders and equipment records.
- Reporting data that feeds IFTA and accounting.
TruckMaster has been serving transportation companies since 1990. Our entry-level web-based product can help new carriers get organized without a large upfront investment, and our cloud and enterprise offerings provide deeper accounting, maintenance, HR, and brokerage workflows as your company grows.