There’s always going to be a need for moving companies because people will continue to move in and out of their homes and offices. If you dream of running a business that helps people with their move you should make yourself aware because the moving business is a highly regulated industry.
Regulations are in place to protect the general public and their belongings. As well as being a legal requirement, permits, licenses, and compliance with regulations prove that your company is legitimate.
Licensing requirements vary considerably, depending on the state. All moving companies that offer an interstate moving service must have a registered number with the US Department of Transportation (USDOT). In addition, some states also require local movers to obtain one as well.
Why Moving Companies Require a License
Licensing requirements for moving companies and movers depend on the laws of the states in which they operate. In addition, they depend on whether you’re going to be moving goods across state lines.
Federal law requirements are those interstate movers must register their trucks with the US Department of Transport. Many states also mandate that moving companies hold a state license and drivers hold a commercial driver’s license.
In addition, many moving companies also seek voluntary moving certification because this demonstrates their commitment to providing a quality service.
Different Types of License
If you’re wondering, “What permits do I need to start a moving company?” there are three different types that might apply.
If you’re going to be driving goods across state lines you must register with the US Department of Transportation (USDOT) Federal Motor Carrier Safety Administration (FMCSA). You’ll be given a USDOT number. This number identifies commercial vehicles for record-keeping and regulatory purposes.
In addition, an interstate moving business also requires one or more federal operating authority numbers. They give you the authority to operate your moving business and transport certain types of cargo.
Part of the application process for these numbers is to provide proof of insurance and bonding, along with contact information for your process agents.
Local and State Licenses
Local and state requirements vary. For example, movers in New York need a USDOT number, even if they’re only operating within state lines.
You’ll find more information about the different requirements by visiting the state regulator websites listed below.
International Moving Requirements
An international move is not always moving to another country. It also includes any relocation that involves crossing national borders, such as a move through Canada to get to Alaska.
An international mover must have a Freight Forwarder permit or a Federal Maritime Commission number. Certification from the American Moving and Storage Association (AMSA) or membership in a moving federation such as the FIDI Global Alliance will also show would-be customers that you run a professional moving service.
Who Regulates Moving Companies?
The United States Department of Transportation (USDOT), the Federal Motor Carrier Safety Administration (FMCSA), and various local agencies have very strict regulations that moving companies must comply with.
Interstate Moving Companies
The FMCSA is a federal agency and it’s in charge of making and enforcing safety regulations that relate to interstate moving companies, bus companies, trucking companies, and individuals who hold a commercial driver’s license.
In addition, it also keeps track of US DOT numbers that all moving companies must have and ensures that moving companies comply with federal safety regulations.
Federal laws and regulations only apply to interstate moves and movers. Different regulations and laws apply to local and intrastate moves.
If you provide potential customers with your US DOT number they’ll be able to check various details about your company and that you’re appropriately registered with the US Department of Transportation.
The information they’ll be able to check includes:
● Contact information, including your company address and telephone number
● The type of authority you have, for example, Broker, Freight Forwarder, or Household Goods Carrier
● How long you’ve been operating
● Your safety rating
● Whether you meet minimum insurance requirements
Local Moving Companies
When a moving company operates an intrastate or local service, the regulatory authority falls under the responsibilities of different state organizations. You’ll find the details of these state regulators below.
International Moving Companies
International moving companies are regulated by the Federal Maritime Commission. It regulates moves by sea. In addition, it oversees and licenses Freight Forwarders and Ocean Transportation Intermediaries (OTIs).
List of State Regulators and links to websites
Local moving regulations vary depending on the state. Below you’ll find a list of the state regulators and links to their websites where you’ll find more information.
There is a range of different DOT regulations that a moving company must comply with. Many of these regulations are referred to as Consumer Protection Regulations. If you want to know more about these regulations for moving companies, visit the Federal Motor Carrier Safety Administration where you’ll find them all.
What is the Difference Between a DOT and an MC Number
DOT and MC numbers are often confused. If you apply for one and don’t need it you’re wasting money. However, if you don’t obtain the correct number for your type of moving operation, you could find yourself in a lot of trouble with the FMCSA.
Let’s clarify which one your moving company might need.
Needed for interstate commerce
Needed for intrastate commerce
Needed to haul your property
Needed to haul your one construction equipment
Working for hire to haul someone else’s property
How much does it cost?
Getting a Moving Company License – The Process
To obtain a moving company license you have to meet various Department of Transportation (DOT) and Federal Carrier Safety Administration (FMCSA) standards and regulations. That being said, the actual process is a relatively simple one.
Let’s take you through the steps you need to follow.
Before the Process Begins
Before you can apply for the relevant licenses you’ve first got to get the correct state business registrations and meet general business requirements. What this means is that you have to:
Register with the Secretary of State
Obtain a federal tax identification number
Arrange commercial auto insurance and general liability insurance.
The level of insurance cover you need is between $750,000 and $5,000,000 in liability and cargo insurance. You also have to make sure the liability covers items that are in transit, which is called an inland marine policy.
In addition, you need to obtain a surety bond for $75,000. You won’t be able to apply for a moving company license until you have all these.
Obtain a USDOT Number
A US Department of Transportation (DOT) number is required by all moving companies. You can get your number via the Unified Registration System found on the FMCSA or US DOT website.
If you’re going to be transporting anything other than non-federally regulated cargo, you might also need Operating Authority (MC number). While most moving companies don’t fall in this category, it’s something you’ll need to confirm.
FMCSA applications can be completed online. As soon as you’ve got your US DOT number and meet the insurance requirements, you can complete the online application.
You need to provide the following information:
US DOT number
You also need to check there are no additional state or local government requirements you need to comply with.
Sign up for the New Entrant Safety Assurance Program
The New Entrant Safety Assurance Program is a probationary program that lasts for 18 months. During that time, new entrants must:
Keep safe transport records.
Submit to safety audits.
Ensure all paperwork and inspections are completed promptly.
You will automatically fail the inspection if you don’t have a driver screening program in place, so it makes sense to introduce one. The program has to include random drug screening and driver checks that include making sure they have the correct driving authority and do not have expired, revoked, or suspended licenses.
Permanent DOT Licensing
Once you’ve successfully completed the New Entrant Safety Assurance Program, your US DOT registration becomes permanent.
Other Essential Moving Company Credentials
There are several other credentials you’ll need to consider if you want to make a success of your new moving business.
Moving Company Associations
Across the US there are several different moving company associations, the largest of which is the American Moving and Storage Association (AMSA). Becoming a member of these associations will bolster the credibility of your moving company.
Joining these associations is voluntary, but if your moving company is a member of one or more of them, it’s only going to be a good thing.
There are several other benefits involved including marketing assistance, industry education, and moving business forums.
The ProMover Program Certified is something else worth considering. It’s a program that helps consumers identify quality professional movers who have passed background checks and are in agreement with upholding ASMA’s Code of Ethics.
Moving Company Insurance
All moving companies must have the correct insurance, which covers you in case of damage during a move. Federal and state law makes moving companies liable for losses that might occur while transporting household goods, so it makes sense that you’re covered.
Partnerships With Other Companies
Networking and building partnerships with other companies within the moving community and other associated industries are often the first and most important steps in building a solid customer base.
The benefits of building strategic partnerships with companies in the auto relocation industry, for example, include:
Access to new customers
Opportunities for reaching new markets
Added value for previous customers
As you can see, the requirements for moving company permits and licenses vary depending on where you decide to open a moving business and the remit of your company.
Because of the variations, it’s always best to contact all the state and county agencies where you’re planning to operate your moving business. The information above is meant as just a guideline. Government employees are in the best position to advise you on the current regulations and requirements and explain what it takes to start a local moving business.
Author: Maria Pelaez
I am Content Creator at RCG and I cover the transportation and relocation industries. My background is in journalism and writing for Mass Media and podcasts; the experience of creating content for a transport logistics company in the United States has been rewarding. As a Colombian, I have had the chance to learn a lot about the American culture and all the people behind the transportation industry.