Top Reasons FMCSA Rejects Authority Applications (and How to Avoid Them)

Paperwork missteps, failure to disclose a conflict of interest, and listing an incorrect principal place of business are all reasons the Federal Motor Carrier Safety Administration (FMCSA) may reject operating authority applications.

Ensure you are applying for the correct type of authority

For-hire or private? Interstate or intrastate? Do you need to be hazmat[HD1]  certified? Applying for the incorrect types of authority is one of the biggest mistakes carriers can make when setting up their new business. Be sure to verify what you need before you apply, so you have the correct authority once you are ready to begin operations. Operating without the correct authority can result in costly fines, audits, or deactivation of your USDOT number.

Report all potential conflicts of interest

It is essential that you list all relationships you have with other regulated entities when applying for operating authority.

• Disclose all relationships, no exceptions. If any owner, officer, or manager of your company has had a stake in, or managed, or has a family relationship with another FMCSA-regulated entity in the past 3[HD2]  years, you must disclose it on your application — even if that entity is out of service, inactive, or never operated.
• Don’t assume “inactive” means “irrelevant.” The FMCSA cares about the relationship, not the activity level. If the other company had compliance issues, your application could be affected.
• Transparency is your best defense. If you’re unsure whether a relationship counts, disclose it. The FMCSA is more likely to work with you if you’re upfront than if you omit information.

The FMCSA has made it clear: if you have common ownership, management, control, or familial ties with another regulated entity (even if it’s inactive or never operated), you must disclose it. Failure to do so is grounds for rejection.

Make sure you’re listing an actual place of business

A business’s corporate headquarters is typically listed as their principal place of business, but it’s not required to be. When picking your principal place of business, you should consider:

• Who will be based there? Ideally, you should choose to list the location where your most senior employees, or those responsible for ensuring the organization adheres to the regulations, are located.
• What type of work will be done there? Will your driver managers be dispatching from this location? Is this a shop or a training center? All of the above? Your chosen location should be directly related to the transportation side of your business.[HD3]
• Will you store records there? When an FMCSA-authorized representative requests records, the records must be made available within 48 hours. While you are allowed to choose a different location than where you store your records, keeping them at your principal place of business may be more convenient.

The FMCSA must be able to find you at your principal place of business, so it is important that it is a location out of which you are actively operating. If you have only one business location, it must be that location. It cannot be a P.O. Box, the office of a consultant, service agent or attorney, or an empty office. Listing an ineligible principal place of business is grounds for rejection of an application.

Review the paperwork for accuracy and typos before submitting

Never submit your application without reviewing it. In addition to looking for typos, be sure to check to make sure:

• You’re applying for the correct type of authority,
• You’ve disclosed any relationships you’ve had with other regulated entities, and
• You have the correct address listed for your principal place of business.

The bottom line

Applying for the incorrect type of authority, failure to report a conflict of interest, and listing a principal place of business that doesn’t meet the FMCSA requirements can all derail your operating authority and put your business on hold. Pay extra attention to all these items to ensure your business starts off on the right foot.