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MC Authority Lease Agreement

Is everything spelled out in your MC Authority lease agreement? Maybe not. If it is spelled out in your lease, is it legal? Maybe not. Are you getting everything you’re entitled to? Maybe not. Whether you’re looking for a carrier to lease on with, or you’re already operating under a lease, you owe it to yourself not to let anyone take advantage of you. Your best line of defense is first knowing what your responsibilities are and what you’re entitled to under the leasing regulations, then reading and thoroughly understanding your lease. Going through an MC Authority lease agreement process can be hard to understand at first. So when you have questions call us at Sky Transport Solutions.

MC Authority Lease Agreement

MC Authority Lease Agreement

CHECK LIST for a MC Authority Lease Agreement

  • Owner Operator Lease Agreement
  • Copy of Motor Carrier Authority Permit
  • Copy of W – 9
  • Copy of Certificate of Insurance


Part 376

§ 376.12: Written lease requirements.

Except as provided in the exemptions set forth in subpart C of this part, the written lease required under § 376.11(a) shall contain the following provisions. The required lease provisions shall be adhered to and performed by the authorized carrier.

(a) Parties. The lease shall be made between the authorized carrier and the owner of the equipment. The lease shall be signed by these parties or by their authorized representatives.

(b) Duration to be specific. The lease shall specify the time and date or the circumstances on which the lease begins and ends. These times or circumstances shall coincide with the times for the giving of receipts required by § 376.11(b).

(c) Exclusive possession and responsibilities. (1) The lease shall provide that the authorized carrier lessee shall have exclusive possession, control, and use of the equipment for the duration of the lease. The lease shall further provide that the authorized carrier lessee shall assume complete responsibility for the operation of the equipment for the duration of the lease.

(2) Provision may be made in the lease for considering the authorized carrier lessee as the owner of the equipment for the purpose of subleasing it under these regulations to other authorized carriers during the lease.

(3) When an authorized carrier of household goods leases equipment for the transportation of household goods, as defined by the Secretary, the parties may provide in the lease that the provisions required by paragraph (c)(1) of this section apply only during the time the equipment is operated by or for the authorized carrier lessee.

(4) Nothing in the provisions required by paragraph (c)(1) of this section is intended to affect whether the lessor or driver provided by the lessor is an independent contractor or an employee of the authorized carrier lessee. An independent contractor relationship may exist when a carrier lessee complies with 49 U.S.C. 14102 and attendant administrative requirements.

(d) Compensation to be specified. The amount to be paid by the authorized carrier for equipment and driver’s services shall be clearly stated on the face of the lease or in an addendum which is attached to the lease. Such lease or addendum shall be delivered to the lessor prior to the commencement of any trip in the service of the authorized carrier. An authorized representative of the lessor may accept these documents. The amount to be paid may be expressed as a percentage of gross revenue, a flat rate per mile, a variable rate depending on the direction traveled or the type of commodity transported, or by any other method of compensation mutually agreed upon by the parties to the lease. The compensation stated on the lease or in the attached addendum may apply to equipment and driver’s services either separately or as a combined amount.

(e) Items specified in lease. The lease shall clearly specify which party is responsible for removing identification devices from the equipment upon the termination of the lease and when and how these devices, other than those painted directly on the equipment, will be returned to the carrier. The lease shall clearly specify the manner in which a receipt will be given to the authorized carrier by the equipment owner when the latter retakes possession of the equipment upon termination of the lease agreement, if a receipt is required at all by the lease. The lease shall clearly specify the responsibility of each party with respect to the cost of fuel, fuel taxes, empty mileage, permits of all types, tolls, ferries, detention and accessorial services, base plates and licenses, and any unused portions of such items. The lease shall clearly specify who is responsible for loading and unloading the property onto and from the motor vehicle, and the compensation, if any, to be paid for this service. Except when the violation results from the acts or omissions of the lessor, the authorized carrier lessee shall assume the risks and costs of fines for overweight and oversize trailers when the trailers are pre-loaded, sealed, or the load is containerized, or when the trailer or lading is otherwise outside of the lessor’s control, and for improperly permitted overdimension and overweight loads and shall reimburse the lessor for any fines paid by the lessor. If the authorized carrier is authorized to receive a refund or a credit for base plates purchased by the lessor from, and issued in the name of, the authorized carrier, or if the base plates are authorized to be sold by the authorized carrier to another lessor the authorized carrier shall refund to the initial lessor on whose behalf the base plate was first obtained a prorated share of the amount received.

(f) Payment period. The lease shall specify that payment to the lessor shall be made within 15 days after submission of the necessary delivery documents and other paperwork concerning a trip in the service of the authorized carrier. The paperwork required before the lessor can receive payment is limited to log books required by the Department of Transportation and those documents necessary for the authorized carrier to secure payment from the shipper. In addition, the lease may provide that, upon termination of the lease agreement, as a condition precedent to payment, the lessor shall remove all identification devices of the authorized carrier and, except in the case of identification painted directly on equipment, return them to the carrier. If the identification device has been lost or stolen, a letter certifying its removal will satisfy this requirement. Until this requirement is complied with, the carrier may withhold final payment. The authorized carrier may require the submission of additional documents by the lessor but not as a prerequisite to payment. Payment to the lessor shall not be made contingent upon submission of a bill of lading to which no exceptions have been taken. The authorized carrier shall not set time limits for the submission by the lessor of required delivery documents and other paperwork.

(g) Copies of freight bill or other form of freight documentation. When a lessor’s revenue is based on a percentage of the gross revenue for a shipment, the lease must specify that the authorized carrier will give the lessor, before or at the time of settlement, a copy of the rated freight bill or a computer-generated document containing the same information, or, in the case of contract carriers, any other form of documentation actually used for a shipment containing the same information that would appear on a rated freight bill. When a computer-generated document is provided, the lease will permit lessor to view, during normal business hours, a copy of any actual document underlying the computer-generated document. Regardless of the method of compensation, the lease must permit lessor to examine copies of the carrier’s tariff or, in the case of contract carriers, other documents from which rates and charges are computed, provided that where rates and charges are computed from a contract of a contract carrier, only those portions of the contract containing the same information that would appear on a rated freight bill need be disclosed. The authorized carrier may delete the names of shippers and consignees shown on the freight bill or other form of documentation.

(h) Charge-back items. The lease shall clearly specify all items that may be initially paid for by the authorized carrier, but ultimately deducted from the lessor’s compensation at the time of payment or settlement, together with a recitation as to how the amount of each item is to be computed. The lessor shall be afforded copies of those documents which are necessary to determine the validity of the charge.

(i) Products, equipment, or services from authorized carrier. The lease shall specify that the lessor is not required to purchase or rent any products, equipment, or services from the authorized carrier as a condition of entering into the lease arrangement. The lease shall specify the terms of any agreement in which the lessor is a party to an equipment purchase or rental contract which gives the authorized carrier the right to make deductions from the lessor’s compensation for purchase or rental payments.

(j) Insurance. (1) The lease shall clearly specify the legal obligation of the authorized carrier to maintain insurance coverage for the protection of the public pursuant to FMCSA regulations under 49 U.S.C. 13906. The lease shall further specify who is responsible for providing any other insurance coverage for the operation of the leased equipment, such as bobtail insurance. If the authorized carrier will make a charge back to the lessor for any of this insurance, the lease shall specify the amount which will be charged-back to the lessor.

(2) If the lessor purchases any insurance coverage for the operation of the leased equipment from or through the authorized carrier, the lease shall specify that the authorized carrier will provide the lessor with a copy of each policy upon the request of the lessor. Also, where the lessor purchases such insurance in this manner, the lease shall specify that the authorized carrier will provide the lessor with a certificate of insurance for each such policy. Each certificate of insurance shall include the name of the insurer, the policy number, the effective dates of the policy, the amounts and types of coverage, the cost to the lessor for each type of coverage, and the deductible amount for each type of coverage for which the lessor may be liable.

(3) The lease shall clearly specify the conditions under which deductions for cargo or property damage may be made from the lessor’s settlements. The lease shall further specify that the authorized carrier must provide the lessor with a written explanation and itemization of any deductions for cargo or property damage made from any compensation of money owed to the lessor. The written explanation and itemization must be delivered to the lessor before any deductions are made.

(k) Escrow funds. If escrow funds are required, the lease shall specify:

(1) The amount of any escrow fund or performance bond required to be paid by the lessor to the authorized carrier or to a third party.

(2) The specific items to which the escrow fund can be applied.

(3) That while the escrow fund is under the control of the authorized carrier, the authorized carrier shall provide an accounting to the lessor of any transactions involving such fund. The carrier shall perform this accounting in one of the following ways:

(i) By clearly indicating in individual settlement sheets the amount and description of any deduction or addition made to the escrow fund; or

(ii) By providing a separate accounting to the lessor of any transactions involving the escrow fund. This separate accounting shall be done on a monthly basis.

(4) The right of the lessor to demand to have an accounting for transactions involving the escrow fund at any time.

(5) That while the escrow fund is under the control of the carrier, the carrier shall pay interest on the escrow fund on at least a quarterly basis. For purposes of calculating the balance of the escrow fund on which interest must be paid, the carrier may deduct a sum equal to the average advance made to the individual lessor during the period of time for which interest is paid. The interest rate shall be established on the date the interest period begins and shall be at least equal to the average yield or equivalent coupon issue yield on 91-day, 13-week Treasury bills as established in the weekly auction by the Department of Treasury.

(6) The conditions the lessor must fulfill in order to have the escrow fund returned. At the time of the return of the escrow fund, the authorized carrier may deduct monies for those obligations incurred by the lessor which have been previously specified in the lease, and shall provide a final accounting to the lessor of all such final deductions made to the escrow fund. The lease shall further specify that in no event shall the escrow fund be returned later than 45 days from the date of termination.

(l) Copies of the lease. An original and two copies of each lease shall be signed by the parties. The authorized carrier shall keep the original and shall place a copy of the lease on the equipment during the period of the lease unless a statement as provided for in § 376.11(c)(2) is carried on the equipment instead. The owner of the equipment shall keep the other copy of the lease.

(m) This paragraph applies to owners who are not agents but whose equipment is used by an agent of an authorized carrier in providing transportation on behalf of that authorized carrier. In this situation, the authorized carrier is obligated to ensure that these owners receive all the rights and benefits due an owner under the leasing regulations, especially those set forth in paragraphs (d)-(k) of this section. This is true regardless of whether the lease for the equipment is directly between the authorized carrier and its agent rather than directly between the authorized carrier and each of these owners. The lease between an authorized carrier and its agent shall specify this obligation.

Citation: [44 FR 4681, Jan. 23, 1979, as amended at 45 FR 13092, Feb. 28, 1980; 47 FR 28398, June 30, 1982; 47 FR 51140, Nov. 12, 1982; 47 FR 54083, Dec. 1, 1982; 49 FR 47851, Dec. 7, 1984; 51 FR 37406, 37407, Oct. 22, 1986; 52 FR 2412, Jan. 22, 1987; 57 FR 32905, July 24, 1992; 62 FR 15424, Apr. 1, 1997]


Disclaimer:Although we make every effort to assure that the information we provide is complete and accurate, it is not intended to take the place of published agency regulations. Regulations issued by the U.S. Department of Transportation and its Operating Administrations are published in the Federal Register and compiled in the U.S. Code of Federal Regulations (CFR). Copies of appropriate volumes of the CFR in book format may be purchased from the Superintendent of Documents, U.S. Government Printing Office, or examined at many libraries.

To make sure your MC Authority lease agreement goes smoothly be sure to call the MC Authority lease agreement specialists here as Sky Transport Solutions. MC Authority lease agreement can be hard to understand if you have never signed one before, so if you have questions call us.

MC Authority Lease Agreement Specialists

November 16th, 2015

Posted In: MC Authority

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Get your MC Authority quickly and hassle free when you work with Sky Transport Solutions (STS). When you decide to go the owner operator (O/O) route, you will have a lot of questions at first. it is not as difficult as it seems to operate under your own MC Authority. So you do your part and get ready to become an owner operator and we will make sure all your permits are in order and your truck is in compliance.

MC Authority

INTERSTATE Operating Authority Process
Sky Transport Solutions (STS)  can help you through the entire process, answering all your questions every step of the way. Our basic Operating Authority package is very competatively priced. The basic package includes:

  • Motor Carrier Number (MC #) Application & $300 FMCSA Filing Fee
  • USDOT Number Application
  • First Year’s Process Service Program Fee (includes BOC-3 Filing)
  • State Registration Requirements Consultation
  • Compliance and Driver Qualification File Templates
  • Quick Permit Service

The staff at STS is faster and more reliable than other agencies. Even though we work quickly, we never skip steps or cut corners with the processing of your paperwork, applications and permits. The staff at STS understands that you need your truck filings as soon as possible, and we prioritize reliability and efficiency in all our processing.


How do I check the status of my authority?

Click here to check the status of your authority:

  1. Scroll to the bottom of the page and click Continue
  2. Top-right corner of page, select Carrier Search from drop-down menu
  3. Input your MC#, hit search and then hit the HTML button

New Entrant

Do not procrastinate.

The time to begin preparing for your New Entrant Safety Audit is now. Safety Audits usually occur within the first three to six months after a New Entrant begins operating under its USDOT number, but certain violations could trigger an expedited audit, so it is wise to be prepared.

You can rely on Sky Transport Solutions to help you comply with all Federal regulations and requirements throughout the audit process.

November 9th, 2015

Posted In: MC Authority


open hot shot trucking company

Open hot shot trucking company is not as difficult as you may think.

Start a hot shot (also known as Hotshot) trucking company by first deciding if this is what you want to do for work.  Look around numerous freight matching websites to see how much money you get paid when you get loaded with lots of loads and freight for your hot shot truck. Online freight matching services make it much simpler for brokers and carriers to find loads and trucks. These services work in different ways, but the goal is always the same; to improve efficiency for both carriers and shippers by making the best use of available equipment.

Start freight matching by posting loads and trucks to freight matching boards, your postings are compared to load and truck availabilities in their system. If a match is found, one or both parties are notified so they can contact each other to make shipping arrangements. Sometimes notification takes place immediately on the website, other sites provide notification by e-mail, fax, or pager. Not all load boards perform freight matching, some just allow you to search for matches on your own. A true freight load matching service will provide some level of automated matching and notification based on what you have posted.

Read more here: Open hot shot trucking business company

October 2nd, 2015

Posted In: DOT Compliance


When it comes to your DOT compliance safety audit, it is important to be prepared. The best way to pass a DOT audit is to be certain that you are in compliance in the first place.

dot compliance pass checklist criteria

To assist you in this matter, below is a DOT safety audit guide detailing some of the main points to prepare for.

Drug and alcohol testing

You should have regular drug and alcohol testing as part of employment. To pass your DOT safety audit, you need a drug and alcohol testing program that meets the requirements, including having a set policy and a way to report testing results. Supervisors should also complete reasonable-suspicion training to teach them how to recognize the signs of drivers that are under the influence.

Driver qualifications

As part of your DOT compliance safety audit preparation, you will need to have certain files set up and maintained. A DOT audit will look at both your Driver Qualification File and your Safety Performance File. The Driver Qualification File should contain information such when a driver’s license will expire and driving records. The Safety Performance File includes forms that look a driver’s driving history.

Hours of Service

Another thing that a DOT complaince safety audit will look at is whether or not your drivers are meeting the hours of service requirements and are keeping their log books complete and accurate. Before you have a DOT audit you will want to make sure that drivers are filling out their logs completely and not going over the maximum hours behind the wheel.

Vehicle maintenance

Part of your DOT compliance safety audit will be verifying that your vehicles are in good repair, and that they have regular inspection, repair, and maintenance rules. You will want to make sure that drivers are doing all inspections properly and maintaining records of these inspections. This includes inspections that drivers do themselves, as well as annual inspections, emergency equipment, vehicle maintenance logs, and the qualifications of inspectors.

Financial responsibility

Your DOT audit will also look to see that you have the minimum level of financial responsibility required. All drivers are required to carry insurance, and business owners will also need to verify that they are properly insured before having a DOT safety audit.

Are you compliant?

There are many ways to make sure that you are compliant with DOT safety regulations before you have a DOT compliance safety audit. There are several companies that offer DOT safety audit assistance and will go over your records to make sure that you are in compliance. In addition, you can order the FMCSA Safety Regulation Books to make sure that you are up to date on all of the current FMCSA requirements.

Keep in mind that every employee should be aware of his or her part in staying compliant with DOT compliance safety audit regulations. The best way to survive an audit is to make sure that you are staying compliant the first time, every time. Sky Transport Solutions provides DOT compliance services.

DOT compliance

More information on the new entrant program by the FMCSA

September 24th, 2015

Posted In: DOT Compliance

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