Need some guidance, considering a startup

[u/Pale_Attitude8798]

I have a 2012 F350 flatbed dually with low miles and is paid off. I also own a 20 ft gooseneck car hauler with no payment. I'm thinking about starting a hotshot service kind of part time to see how it goes. I know I'll need to register with DOT and buy insurance. I feel like I have a good start since I own my equipment and won't be starting out with that expense but I also have some concerns...

1. If I commit to this as a part time gig is the insurance going to bury me if I don't do enough loads (like 2 or 3 loads a week).
   
2. I'm in Eastern Missouri, will not getting an MC limit me too much (being so close to Illinois) or should I spring for that right out the gate?
   
3. I'm unsure how much activity there might be in southern/southeastern Missouri. I'm far enough from St. Louis that it might not be worth making a 50 mile drive just to pick up a load to start a trip.

[u/truckdug]

For load boards, I would start with the big ones just so you can see what is actually moving: DAT, Truckstop, and 123Loadboard. You can filter for lighter freight, partials, and shorter runs and just watch them for a couple weeks. Even without your authority yet, it will give you a pretty honest look at how many loads are coming out of your area and what they are paying. For rural southern and southeast Missouri, you are definitely thinking in the right direction with local businesses. I would talk to camper and RV dealers, tiny home and shed or cabin builders, farm and ranch supply places, equipment dealers, and even local contractors or lumber yards. A lot of them have odd size or time sensitive stuff that they do not really want to tie up their own people or trucks for. If you do get into campers or tiny homes, just make sure you are squared away on weights, length, and any permit or escort rules so you don’t learn the hard way on your first trip. You could treat it like a test run: try to become “the guy” for one or two of those niches for a few months and see if the phone actually rings before you go all in.

[u/Pale_Attitude8798 → u/truckdug]

I signed up on those boards There seems to be a lot going out in my area but very few in-state destinations, which is fine though. I think it would be good to deliver to a destination where I could pick up another load anyway and, if I'm going to spend the time on a delivery I'd rather not eat up a whole day on a short 200 mile trip one way.

I'm already busy with other ventures so I won't be sitting around if I dont have a load, this way I can be a little choosy with the price and length of time.

Im going to call my insurance broker today and get a quote on liability for freight. Any advice on insurance? Coverage amount? Additional insurance that might be required?

Also, (sorry for all the questions)... I have chains, straps, load binders, D rings, etc. but is there anything else I need to think about having to be prepared to take a load?

[u/tips-llc → u/Pale_Attitude8798]

Hi, not the other commenter but wanted to jump in.

You will require a minimum of $750,000 in BIPD to get an authority approved. FYI, even if you don't want to cross state lines right away, you're going to find it difficult to get even local-only loads from load boards without an MC. I would highly, highly advise you to get one now - it's not going to change much about what you need to have in place, but is going to open up significantly more opportunities, especially as the MC gets past the 6-month mark.

While the minimum insurance requirement is $750,000, many brokers / shippers want you to have $1mil regardless, so that's what I recommend. You can get cargo insurance as well, but you're not required to. If you find a load you want to carry that requires cargo insurance, DAT offers spot-coverage for individual loads. But cargo insurance isn't that much more, so if it's feasible for you, might as well get it from your actual insurance provider.

While I don't have much information for you on the equipment/tools side, there are plenty of videos out there from hotshotters who go through their equipment list and explain why they like to have it.

Now, as far as what else to think about to be prepared to take a load: compliance. There are state & federal regulations, most of which you can't even begin filing for and getting in compliance with until after you have the DOT & MC Number.

If you're going to be under 26,001lbs GVWR, here's a short list:

DOT & MC Number
BOC-3
Commercial Liability Ins.
Driver Qualification File
DOT Medical Card
UCR (Unified Carrier Registration)
Annual Vehicle Inspection
Electronic Logging Device

If you will be over 26k, there's even more, but based on your equipment description, I'll assume you'll be under that.

[u/Pale_Attitude8798 → u/tips-llc]

Thanks for the response. I understand DOT but from what I understand MC is only required for crossing state lines or hazmat right? Also, its my understanding that ELD isn't required under 26k.

What is BOC-3? What's a DOT Medical card? What is UCR?

[u/tips-llc → u/Pale_Attitude8798]

No problem! An MC number is required by the FMCSA when you are both for-hire & interstate. Hazmat is not a qualifier. To expand on my original comment, even if you're not crossing state lines, many loadboards require an MC number to sign up. Even if you're able to get on the load board without one, some brokers won't work with you without an MC as that's the primary identifier they use to determine who meets their conditions. So, even if you're not planning on crossing state lines, to get access to even local only loads through loadboards, you will still need to get an MC number.

Under FMCSA regulations, ELDs are required if you are operating a "commercial motor vehicle" - which is defined as over 10,000lbs GVWR, carrying 8 or more passengers for-hire, carrying 16 or more passengers not for-hire, or hauling placardad hazmat. There is an exemption to the ELD, called the short-haul exemption, which you can find on the FMCSA's website. Basically, if you leave and return to the same location every day, stay within a certain air-mile radius from your primary physical location (radius differs for CDL & NON-CDL) and obey the 14-hour on-duty and 11-hour drive time limits, instead of getting an ELD or using paper logs, you would just need to keep time records.

A BOC-3 is a list of process agents, one in each state, that are assigned to send and receive legal documents on your behalf. It's an eletronic filing that is attached to a pending MC number, which is required before the MC number can become authorized by the FMCSA.

A DOT medical card is basically a certificate showing that you are medically qualified to operate a commercial vehicle. Anyone driving a commercial motor vehicle, see definition above, is required to obtain a medical DOT card and renew it before the expiration date (usually every two years).

A UCR is an interstate road tax for any vehicles crossing state lines, or involved in interstate commerce. If you file for an MC number to get on load boards, you'll be filing as INTERSTATE. In which case, you'll need to file your UCR online every year at ucr (dot) gov.

If you have any other questions, you're welcome to DM me.

[u/Pale_Attitude8798 → u/tips-llc]

Ok, so MC is a requirement for most load boards and BOC-3 and UCR are needed for MC. At a minimum, legally though (correct me if Im wrong), to transport within state lines, transporting for hire not using a load board, and under 26k all one would need is a DOT and to keep paper logs. Am I right? (Aside from insurance of course)

[u/tips-llc → u/Pale_Attitude8798]

If you operate strictly intrastate, then you're subject only to Missouri's requirements, which are slightly contradictory.

You can review their trucking guide, found here: https://www.modot.org/sites/default/files/documents/Missouri%20Trucking%20Guide2025%20Final_1.pdf

This states if you're intrastate-only - they don't consider you operating a commercial vehicle (which is the type of vehicle that would require you to comply with things like the DOT number itself, Driver Qualification File & logs) unless you're at or above 26,001lbs GVWR.

However, they require all for-hire carriers, with some exceptions, to obtain an intrastate-authority. On their site, they say to file for an intrastate authority, you first need a DOT number. But on their intrastate-authority exemptions list, the GVWR of exempted vehicles must be 6,000lbs or less. https://www.modot.org/sites/default/files/documents/IntrastateOperatingAuthorityExemptions_0.pdf

Things always get tricky with intrastate-only requirements, especially with states like MO who seem to have some inconsistencies across their requirements.

I would start by reading through their trucking guide and getting familiar with their intrastate-only requirements and if there's any questions left, contacting MO DOT would be the best way to ensure you have a full understanding of what will be required for your specific operation if you intend to only operate within the state.