How to Obtain For-Hire Authority During an Emergency
During times of emergency, like the COVID-19 pandemic, private carriers that do not have for-hire authority often want to help. The FMCSA has a process to follow when an emergency is declared. The agency will only provide temporary authority when the need is either not met or is not expected to be met by current for-hire carriers. That was certainly the case during the latest COVID emergency.
The process to obtain temporary or permanent for-hire authority can be lengthy. The normal vetting process can take eight weeks or more. A carrier cannot engage in for-hire operations until the authority is active. The authority is designated by a motor carrier (MC) number. The MC number is required by a carrier to transport passengers, regulated property or household goods that are not their own and to do so for compensation.
Whether temporary or permanent credentials are requested, the carrier completes an OP-1 form, designates process agents, and demonstrates that the required amount of bodily injury and property damage (BIPD) insurance is in place.
Because of the urgent need, the process to obtain Emergency Temporary Authority (ETA) can be completed within two-days. To expedite, the OP-1 and related forms can be uploaded directly from an online webform.
In order to obtain temporary interstate for-hire authority, a carrier must already have an interstate USDOT number. If the carrier doesn’t have a current interstate registration, they must apply for one by submitting a signed MCS-150 form along with OP-1 on the webform.
As the name implies, the authority is only temporary. The authority is only valid until the emergency declaration expires or 120 days, whichever comes first.
Rather than waiting for the next emergency to come along, private carriers may want to consider obtaining permanent for-hire authority. Many otherwise private carriers obtain authority to:
- Turn the expense of drivers and equipment into revenue generators,
- Prevent driver layoffs and furloughs during slow periods,
- Improve network balance and reduce deadheads, and
- Maintain a capacity vs. demand balance.
The procedure to obtain permanent for hire authority is much like the temporary procedure. Process agents need to be designated and the carrier needs to demonstrate financial responsibility. One difference, however, is that there is a one-time $300 fee to obtain permanent authority.
Since process agents are generally not required by private carriers, carriers can be confused by the role of a process agent. The agents are in each state of operation and are “designated” to receive notice of any actions against the carrier on behalf of the carrier. A process agent functions as a conduit between the legal system and the motor carrier. Rather than locating an agent in each state of operation, a blanket designation can be made.
Private carriers are nervous that additional safety regulations apply to for-hire carriers, some going so far as to place the additional signage of “private – not for hire” on their vehicles. There is no need to do so, there are no additional safety burdens or expectations placed on for-hire carriers. The requirements for driver qualifications, hours of service, vehicle, driving, inspections, CDL and drug & alcohol testing are the same.
Because for-hire authority takes so long to obtain, an opportunity to generate significant revenue can pass before the authority can be obtained. Many times, it’s a case of “better to have it and not need it, than to need it and not have it.”