The trucking industry is the backbone of the American economy, hauling products over long distances and ensuring the inventory of the stores is up to date. If you plan to join this field, where the law plays a significant role, it is important to understand the legalities. Along with operating legally, there is a need to possess a Motor Carrier (MC) number from the Federal Motor Carrier Safety Administration (FMCSA).
However, how will you act if you decide to start your business without a taxpayer identification number or MC number. It might seem like a shortcut at the beginning, but the results could be dire for your finances, and you might find yourself in a situation where you have to shut down the business.
Understanding the MC Number
An MC number is a unique identifier for trucking companies that cross state lines. It shows that the FMCSA certifies your company as qualified to run under safety norms. Getting an MC number is the process of enrolling your business with the FMCSA, proving your financial responsibility, and acquiring the required insurance.
Avoiding the Risks: An MC Number is Essential
The procedure of getting an MC number may seem to be tricky, but help is available to go through. The FMCSA website is an avenue for a lot of information and direction. Additionally, there are companies which offer assistance with filing for the MC number without a truck.
Penalties For Operating Without an MC Number
An MC Number is a license that allows individuals or companies to engage in interstate or foreign commerce. Failure to obtain it results in penalties. Compliance with the Department of Transportation regulations is not only a requirement but also a necessity for your trucking business to avoid a number of penalties.
These can include:
- Steep Fines: The FMCSA can assign daily hefty fines for the operation without a valid MC number. Such fines could soon grow into substantial financial charges.
- Out-of-Service Orders: If you have the MC number and your trucks are operated without it, you can be prohibited from service, thus stopping your operations and possibly causing you revenue loss.
- Civil Penalties: In addition to fines, the FMCSA may proceed with civil penalties which are even more detrimental to your financial health.
- Reputational Damage: Conducting business illegally can spoil your business reputation and make it hard to get contracts with reliable clients.
In certain situations, the gravity of the offense taken into consideration, the authorities might decide to prosecute the case. This could land a person in even more severe penalties and even in jail.
Heavy Fines Can Sink Your Business
The FMCSA appreciates and takes operating without an MC number very seriously. If you’re caught, you can be fined up to $50,000 per day of operation, which can add up to quite a lot of money. Such a situation of a monetary liability can lead to a crisis of the existence of your new trucking enterprise.
For instance, consider a situation where your business has been without an MC number for one week (seven days). In this scenario, the fines may sum up to approximately $350,000. This illustration shows the necessity of having an MC number before you set out on the road.
Out-of-Service Orders Can Stop You in Your Tracks
There are no additional penalties for operating without an MC number, except for the fines. The FMCSA can also hand out out-of-service orders which mean you are required to come to a complete stop immediately. This will create a great problem for your business and you will be losing your revenue and clients who will be disappointed.
Rising Insurance Premiums and Possible Refusal of Coverage
The absence of an MC number can be detrimental to your insurance situation in addition to the overall operation. Most insurance companies won’t cover the trucks with no MC number. In the case that you are able to find coverage, you can be sure that the premiums will be a lot higher than they usually are since the risk is definitely higher than what is associated with the operating of a legal business.
The Takeaway: Don't Get Caught, Get Your MC Number
Operating without an MC number is not worth the risk and you would be subject to all the consequences. An MC number is obtainable without much difficulty, and the amount is small compared to the possible penalties you may pay. By observing the FMCSA regulations, you can guarantee that your trucking business will have no problems with the law and you will not be fined.
The key point to keep in mind is that safe and legal truck operation is not just the only but also the most important form of success. It’s a good idea to be cautious and obtain your MC number before commencing the hauling of goods.
