Can I Sell My MC Number? An In-Depth Guide

As a long-time data analyst and tech specialist in the trucking industry, one of the most common questions I receive is whether a motor carrier can sell their MC number. This unique identifier is crucial for operating commercial trucks across state lines in the US.

Transferring an MC number involves following specific FMCSA guidelines. But it can provide benefits both for sellers exiting the industry and buyers looking to expedite starting their own trucking company.

In this comprehensive guide, we’ll explore:

What is an MC number and why it’s required
How the MC number transfer process works
What impacts the value of an MC number
Steps for legally selling your active MC number
Tips for finding and purchasing an existing MC number
Options for obtaining your own brand new authority
Data and statistics on the motor carrier industry

If you’re considering getting into, or out of, the trucking business, understanding the ins and outs of MC numbers is key. Let’s dive in!

What Exactly is an MC Number?

Maybe you’ve noticed the unique numbers displayed on semi-trucks and wondered what they meant. Known as MC numbers, which stands for motor carrier, these identifiers are like a license plate for commercial motor carriers.

The Federal Motor Carrier Safety Administration (FMCSA) issues a unique MC number to any company transporting cargo or passengers across state lines for profit. It authorizes them to provide interstate transportation services within the United States.

Without active operating authority in the form of an MC number, it is illegal to operate commercial vehicles over state borders. Intrastate trucking companies working within one state do not need an MC number but may choose to get one.

Here are some key facts about MC operating authority:

Issuing Agency: FMCSA, which is part of the U.S. Department of Transportation
Required for: Interstate trucking operations
Assignment: Unique to each carrier
Transferability: Not between companies but can be sold/transferred with FMCSA approval
Visibility: Publicly searchable in FMCSA licensing and insurance database
Status:ACTIVE or INACTIVE depending on compliance

The MC number is different from the DOT number, which is used specifically for safety audits, compliance investigations, insurance monitoring, and accident reporting. The MC number deals with a carrier’s operating authority and status.

Companies need both an active MC and DOT number to legally provide interstate trucking services. Let’s look closer at the process for transferring MC authority when you want to sell your number.

Transferring an MC Number to a New Carrier

While the FMCSA states that MC numbers themselves cannot be transferred between companies, the operating authority associated with the number can be. This involves revoking the current MC number and awarding its authority to another carrier.

The process was established to allow trucking companies going out of business to sell their authority. It also allows prospective carriers to skip the full application process by acquiring an existing authority from a closing business.

According to FMCSA regulations 49 CFR 365, transferring operating authority with an MC number involves:

Current carrier requests voluntary revocation of their MC number using Form MCS-150C. This relinquishes their operating authority.
Buyer files request to transfer authority within 30 days using Form OP-1. This awards authority to the new carrier.
FMCSA reviews and approves the transfer. Both filings are reviewed to ensure a valid transaction.
New motor carrier can begin operations under the acquired MC number once approved.

Following this process allows a smooth transition of authority from one entity to another. The MC number itself stays the same but is essentially “rebranded” under new ownership.

Trying to simply let another company use your active MC number without proper transfer of operating authority goes against FMCSA regulations.

Transferring authority provides an advantage to buyers who gain an established MC number without needing to fully qualify for their own brand new one. Sellers also benefit from recovering some value from their business instead of simply shutting down.

Next, let’s look at the factors that influence the sale value of an MC number.

What Impacts the Worth of an MC Number?

A used MC number with existing operating authority provides a shortcut for new trucking businesses, so these transfers are common sale transactions. But what determines the actual dollar value of an MC number?

Some key factors include:

Age of authority – Older authority with longer history tends to be more valuable. Numbers issued in the last 1-2 years sell for less.
Safety rating history – Numbers with Satisfactory ratings have higher value. Conditional and Unsatisfactory bring lower prices.
Type of authority – Hazmat, household goods, and bus authority commands higher prices than general freight.
Customer contracts and history – Established customer relationships and proven revenue indicate better future earnings potential.
Past revenue and sales – Higher historical revenues suggest stronger future profit potential.
Equipment, assets, terminals – Physical assets that come with the MC number can affect price.
Reputation – Safety, compliance, and service reputation affect perceived value.
Insurance limits – Higher liability insurance limits allow larger cargo contracts.
Market demand – More buyer competition leads to higher sale prices.

There are no fixed price charts, so negotiating an MC number’s value comes down to buyer and seller agreement based on market factors.

As a guideline:

Numbers with no operating history sell for $500-$5,000 based mainly on age.
Active authorities with customer contracts can sell for $5,000 up to $15,000 or more depending on specific valuation factors.
5-year-old active MC numbers tend to sell for around $7,500 on average.
Hazmat certified authority commands premium pricing.

Brokers can also assist with MC sales using expertise to evaluate market demand, set pricing, and handle transfers. Typical broker commissions range from 10-25% of the sale price.

Now let’s walk through the steps sellers should take when transferring authority.

Checklist for Selling Your Active MC Number

If you are a motor carrier seeking to sell your MC operating authority, you’ll want to ensure the process goes smoothly. Here is a checklist of important steps to follow on your end:

Notify your insurance company that the authority will be transferred and cancelled under your policy.
Resolve any outstanding claims, settlements, or investigations that exist under the current authority.
Ensure all quarterly and annual FMCSA reports have been filed and taxes paid to avoid compliance issues during transfer.
File the request for Voluntary Revocation of Authority using Form MCS-150C and pay the $16 processing fee. This revokes your registration.
Provide the buyer documentation such as your authority’s audit history, safety ratings, compliance records, insurance limits, customer list, equipment inventory, and personnel contacts. This helps them value your authority.
Carefully review the terms of the purchase contract proposed by the buyer and sign it if you agree. This covers the sale details.
Supply the buyer with a list of all current customer contracts, physical assets, terminal facilities, trailing paperwork, or other elements involved in the transaction.
Verify that the new carrier filed for authority transfer within 30 days after you revoked your registration. This keeps the process moving.
Respond promptly to any requests from the FMCSA during their transfer review process. This helps approval go smoothly.
Receive payment from the buyer according to the terms in your purchase contract once the FMCSA has fully approved the authority transfer.
Cancel related permits, registrations, fuel tax licenses, etc. that were under your previous authority.

Closely following FMCSA transfer procedures and communicating clearly with the buyer ensures you properly sell your active MC number. You’ll want to see documentation proving they officially acquired your authority before considering it sold.

Now let’s look at finding an MC number if you’re on the buying end.

Tips for Purchasing an Existing MC Number

For prospective motor carriers hoping to expedite the process of obtaining authority by buying an existing MC number, here are some tips:

Search industry listing services – Several sites compile MC numbers listed for sale, similar to classified ads. This lets you browse availability.
Find an MC number broker – Brokers specialize in connecting buyers and sellers, evaluating cost factors, and handling transfers. Their expertise simplifies the buying process.
Vet the authority’s history – Review records to confirm the MC number’s age, safety ratings, liabilities, major customers, assets, debts, and anything else that affects its value.
Compare pricing – Look at the asking prices for multiple comparable authorities for sale to determine fair market value. Factor in your startup costs.
Negotiate contract terms – Clarify upfront who pays any transfer fees, what assets are included, liability assumptions, and payment timeline. Get it in writing!
Act FAST once it’s revoked – The seller relinquishing the number triggers your 30-day window to file for authority transfer with the FMCSA. Don’t delay!
Stay compliant once approved – Maintain appropriate insurance levels, safety scores, fees, compliance practices and data security to keep your new authority active.

While buying an MC number involves some due diligence, you gain the advantage of skipping the long process of applying for a brand new one. Let’s compare that option.

Obtaining Your Own New MC Number

If you prefer starting fresh with all-new operating authority, here is an overview of the key steps:

Determine your type of operations – Will you haul certain commodity types, hazardous materials, or passengers? The type affects requirements.
Calculate your minimum insurance needs – This is based on cargo, vehicle size, hazmat material, and number of passengers.
File OP-1 application form – Applies for a new unique MC number with $300 fee.
Provide documentation – Send insurance forms, process agent forms, safety procedures, CDL info, etc.
Pass vetting – FMCSA reviews application for sufficient insurance, safety procedures, compliance history, and other qualifications.
Receive authority – If approved, your new MC number will be issued in 4-6 weeks.
Maintain standards – Keep insurance, safety ratings, fees, compliance, and data security up to par to maintain an active status.

The application process for a new MC number involves more time and paperwork than acquiring an existing one. However, it lets you build authority completely tailored to your new venture.

Motor Carrier Industry Statistics and Data

If you’re exploring the commercial motor carrier industry, it helps to understand some key statistics:

There are over 558,000 active interstate motor carrier companies in the US as of 2022 [1].
Together they hold over 700,000 active MC operating authorities [2].
Over 80% of carriers own 1-5 trucks comprising just 3% of the fleet. Small biz is big [3].
The industry transports over 11 billion tons of freight annually worth $796 billion [4].
Trucks move 72.5% of all US freight, dwarfing other modes like rail and air [5].
Average annual revenue per truck is $183,000 for all fleets [6].
Top carriers like UPS and FedEx earn over $1 million per truck [7].
Motor carriers consumed 54 billion gallons of fuel in 2020 [8].
Driver shortage may reach 160,000 by 2030 as demand outpaces supply [9].

Trucking Industry Statistics

With trucks moving the vast majority of commercial freight in America, there continues to be opportunity for new trucking companies as demand grows. Entering the market or selling your business ultimately comes down to your personal situation and goals.

Key Takeaways on MC Numbers

After exploring the ins and outs of MC authority, here are some key points to remember:

Active MC numbers authorize interstate trucking operations. DOT numbers enable safety compliance. You need both.
Transferring authority lets you legally sell MC operating rights while keeping the number.
Follow FMCSA steps for properly moving MC authority between carriers.
Value depends on age, safety ratings, assets, contracts, revenues, and demand.
Buying an MC number provides advantages over applying for a brand new one.
Both sellers and buyers can benefit from the transfer process with the right approach.

I hope this provides clarity on MC numbers whether you’re looking to sell yours or acquire one as a new carrier! Let me know if you have any other trucking business questions.

Sources:

[1] https://www.trucking.org/News_and_Information_Reports_Industry_Data.aspx

[2] https://askavantor.com/mc-authority/

[3] https://www.thetruckersreport.com/infographics/cost-of-trucking/

[4] https://www.bts.gov/newsroom/trucking-industry-revenues-top-796-billion-2018-25-million-trucks-moved-11-billion

[5] https://www.trucking.org/News_and_Information_Reports_Industry_Data.aspx

[6] https://www.gobankingrates.com/money/business/how-much-does-semi-truck-cost/

[7] https://www.fleetowner.com/operations/article/21702077/whats-your-trucks-earning-power

[8] https://afdc.energy.gov/data/10309

[9] https://www.trucking.org/sites/default/files/2021-10/ATA%20Driver%20Shortage%20Report%202021%20Executive%20Summary.FINAL_.pdf