You won’t believe it, but starting a Moving company can be like conquering a maze of rules and permits.
But here’s the kicker – it’s a thriving Business with huge potential! It’s not just about trucks and boxes. It’s about mastering the logistics and rules to make it big.
The specific licenses and permits needed depend on your business location. For example, in New York City, you’ll need to obtain a permit called an “Authority to Transport Household Goods.” It proves you meet certain safety and compliance standards.
Let’s dive into the details!
Table of Contents
Understanding the Basics to Starting a Moving Company
Did you know the moving industry in the USA brings in an estimated $86 billion in revenue annually? Every year, approximately 31 million Americans relocate, which is 9.8% of the population[1].
To run a moving company legally, you must get different licenses and permits. The type you need depends on where you operate.
Getting the right licenses shows your business is legal, trustworthy, and follows the rules.
If your company is in the United States, it is regulated by the U.S. Department of Transportation.
To properly establish and license a moving business for legal operation, the key steps are:
- Register your new business as a corporation or LLC with your state.
- Obtain a USDOT Number from the DOT.
- Secure appropriate insurance coverage i.e.; liability insurance, cargo insurance for your vehicles and liability risks.
- Submit registration paperwork with the Federal Motor Carrier Safety Administration (FMCSA) and apply for operating authority.
- Pass all inspections and demonstrate compliance.
Going through the full registration process properly is crucial to ensure your company meets all federal safety standards, regulations, and insurance requirements and can legally provide moving services.
Setting Up Your Moving Business: Planning, Structure, and Licensing
First, create a thorough business plan. It should include your goals, target market, operations, and strategies for your moving services.
Your plan should include details such as truck size, weekly move count, local or long-distance focus, pricing, policies, expenses, and growth timeline.
You should choose the best business structure or entity for your situation. Which business structure will you choose: sole proprietorship, partnership, LLC, or another?
Each one has different legal, tax, and operational implications so choose wisely.
Once you have the basics down, you can get the permits needed from local agencies. Also, make sure you have the right licenses for moving household items in your area.
Are Licenses Required for Moving Companies?
Moving companies must have business licenses and permits to legally operate.
These are needed at different levels, such as federal, state, local, and international, depending on where they work and the services they provide. These licenses are enforced by various government agencies and authoritative bodies.
If you want to start a moving service company, it’s important to understand why these credentials are necessary. Make sure you comply to avoid legal troubles later.
Federal Licensing Requirements
To legally run a moving business in the United States, you must have a license from the U.S. Department of Transportation (DOT). The DOT provides new moving companies with a unique US DOT Number that is used to monitor and identify their business activities.
To register, complete a formal process with the FMCSA for the Federal Motor Carrier Safety Administration. This applies even if you intend to only conduct moves within the same state.
For any company that plans to conduct interstate moves across state lines, federal licensing is not just recommended – it is required by law.
Local and State Licensing Requirements
In your state, you might need licenses and permits from both local and state levels for your moving company.
It’s essential to thoroughly research and verify the specific requirements in your state.
Companies planning to do local moves within their home state may not need federal licensing, regardless of distance.
However, all other relevant state and local regulations must be understood and followed prior to launching services.
International Moving Licensing Requirements
Companies that want to move internationally must meet specific requirements.
To start, you must get a Freight Forwarder Permit or a registration number from the Federal Maritime Commission. This allows you to legally transport household goods overseas between countries.
Additionally, certification from the American Moving and Storage Association (AMSA) is mandatory for any moving company handling international relocations.
It’s also important to note that all movers are required to carry liability insurance coverage for the full value of household goods being transported.
Companies can choose between two tiers of coverage for international household moves.
Who Provides Oversight and Regulations?
In the U.S., moving companies that do moves between states follow the rules of the Department of Transportation.
To operate legally, all interstate movers must be registered with the DOT and follow their guidelines.
On the other hand, local moving companies within a state must follow regulations set by that state.
For example, In California, the Bureau of Household Goods and Services oversees moving companies. In Massachusetts, they fall under the Department of Public Utilities.
New York has requirements around using unique business names.
Why Proper Licensing is Essential
Getting the right license for your company is important. It gives your company credibility and protects you legally. It also gives customers peace of mind.
Specific credentials like the Authority to Transport Household Goods demonstrate your qualifications to provide services locally.
Interstate movers who obtain a USDOT Number show they adhere to federal safety regulations.
To avoid risks, follow each state’s licensing requirements carefully and protect your business.
DOT Regulations for Moving Companies
To comply with DOT regulations, moving companies will need to obtain credentials like a USDOT Number and MC Number (Motor Carrier Number).
USDOT & MC Number Requirements
Every moving company must have a special number from the US Department of Transportation. This number is necessary to legally operate commercial vehicles, such as moving trucks.
The USDOT Number helps the DOT check the company’s safety record and road safety compliance.
Some moving companies may need to get an MC Number (Motor Carrier Number). This would be in addition to the USDOT number. The MC number comes from the Federal Motor Carrier Safety Administration. Whether a company needs an MC number depends on:
- The types of household goods being moved
- The routes the company travels
- If the company does moves across state lines or internationally
Registering for the New Entrant Safety Assurance Program
All new moving companies are required to enroll in the New Entrant Safety Assurance Program which is administered by the FMCSA. This is a mandatory participation program for first-time applicants.
When companies join this program, they have an 18-month probationary period. During this time, they must keep records to show they operate safely and follow the rules.
The goal of this program is to closely monitor and verify the safety record and regulatory compliance of brand new movers.
Meeting all requirements of this program is imperative for any startups to get their business on the right foot.
Implementing a Driver Screening Program
To ensure public safety and promote reliability, moving companies are expected to implement a structured Driver Screening Program.
This involves conducting thorough background checks and screening on all drivers that are hired. At minimum, their driving record, criminal history, and drug testing results should be verified and vetted.
By making safety the priority when selecting drivers, moving companies protect their customers, minimize liability risks, and build credibility.
A well-designed screening program can identify only the most trustworthy, qualified drivers to handle transporting customers’ valuable possessions.
Applying for a Moving Company Permit
The key steps involved in obtaining a moving company permit are:
- Researching the specific permit requirements for your city/state, since regulations vary.
- Completing all necessary application forms, tax documents, and insurance proofs thoroughly.
- Obtaining the required liability insurance coverage. This protects your business in case of damages.
- Paying any permit fees that may be required by the local government.
- Scheduling and passing any required inspections of your vehicles, equipment, or facilities.
- Submitting the full completed permit application and supplementary documents to the appropriate regulatory agency.
By diligently following these steps and ensuring your company meets your jurisdiction’s requirements, you can successfully obtain required permits and operate your moving company legally.
Other Important Moving Company Requirements
Beyond licensing, joining trade associations, obtaining proper insurance coverage, and building partnerships are also key for any new moving business.
Joining Moving Associations
Joining industry associations like the American Moving & Storage Association (AMSA) or the International Association of Movers (IAM) offers many valuable benefits for moving companies.
You gain access to a wide range of resources to help grow and support your business. This can include things like business templates, contract samples, operations manuals, and industry research reports. Associations often provide discounts on useful services as well.
There are excellent networking and training opportunities. You can connect with peers at association events and conferences to share insights and build relationships. Many associations offer continuing education courses and programs to help movers expand their skills.
Getting Insurance Coverage
Obtaining proper insurance is crucial for starting and operating a moving company legally and safely.
You will have liability risks associated with transporting customers’ valuable possessions.
Insurance helps protect your business in the case of any damage, accidents, or claims. At minimum, liability and cargo/goods insurance is required by law to financially protect you and give customers peace of mind.
Building partnerships
By teaming up with real estate agencies and interior design firms, you can offer more services and receive more referrals. It’s also beneficial to work with self-storage facilities and truck rental companies.
Working with other small businesses allows you to provide more services to customers, such as packing supplies or storage. Building relationships with industry peers also helps build credibility and trust for a new moving company.
Wrapping Up
Starting a business helping people move and organize their homes can be a lucrative venture. However, it requires obtaining the necessary licenses, permits, and certifications for your location and services.
Depending on whether you operate locally or do interstate and international moves, you may need federal, state, and local credentials.
It’s essential to research the specific requirements for your area to ensure full compliance. Having proper licensing establishes trust and allows you to legally operate your moving business.
Be sure to consult relevant agencies like the DOT for any other mandatory certifications. Doing your homework means smooth sailing as you get your moving company up and running!
References:
- https://nexusautotransport.com/interesting-statistics-about-moving-industry/
- https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/docs/Rights-and-Responsibilities-2013.pdf
- https://www.mass.gov/how-to/apply-to-be-a-household-goods-mover-in-massachusetts
- https://www.moving.com/tips/how-to-check-a-moving-companys-usdot-number/
