When starting a trucking company, you need to understand the role of permits for interstate and intrastate trucking operations. The requirements for each differ, and failing to adhere to the federal and state laws will land you in hot water.
Naturally, you’ll want to avoid these costly and time-consuming issues. However, certain things may not be as obvious when following these regulations. For example, the freight itself may require specific permits even if you picked it up and dropped it off in the same state. When a load is transported over state lines at any point, it’s deemed an interstate load.
Take a look at the differences and requirements for each to gain a better understanding of the required permits.
Interstate Trucking vs Intrastate Trucking
The biggest difference between these types of trucking is that interstate permits allow you to legally cross state lines or national borders when transporting freight. Intrastate only allows you to deliver your freight within one state.
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Essentially, interstate loads are long-haul while intrastate loads are not. Even if the origin and destination are in the same state, you’ll need an interstate permit if the route has you crossing state lines.
With intrastate and interstate trucking, there are big differences when obtaining your operating authority. When hauling freight across state lines, you will need a standard US DOT number. The Federal Motor Carrier Safety Administration (FMCSA) requires drivers who transport hazardous materials across state lines or haul a load that will at one point cross into another state to obtain a US DOT number.
Other truck drivers who need a US DOT number are those who operate across state lines with a vehicle weighing over 10,001 pounds. Those who transport people over state lines will additionally require this permit, depending on the number of passengers.
Additionally, all interstate carriers must register their fleets, a condition of the Unified Carrier Registration Act — even if the state they are in doesn’t participate. This grants you legal permission to carry freight into the states you are entering. Compliance with the International Fuel Tax Agreement (IFTA) and International Registration Plan (IRP) is another interstate requirement, allowing states to collect fuel taxes. This saves carriers and owner-operators time as they won’t have to file in each state.
Intrastate trucking is a little less complicated, though it’s important to understand all the requirements in your state. Even as an intrastate trucking business, your state may still require you to get a DOT number. You will also need to comply with the IFTA and IRP, though some states require separate fuel permits.
Along with your permits, you must have the right insurance in place to operate an interstate or intrastate trucking business. For interstate trucking, carriers and owner-operators who transport freight across state lines and national borders must carry the minimum coverage limits outlined by federal laws.
These minimums will vary based on factors such as the type of freight and the weight of the truck. For example, if you are transporting non-hazardous materials in a truck that weighs less than 10,001 pounds, the minimum would be $300,000. For a truck hauling non-hazardous materials that weigh more than 10,001 pounds, it’s a $750,000 minimum. Meanwhile, hauling hazardous materials tends to have a minimum of $5 million.
While these are some of the minimums that may apply to your trucking business, keep in mind that many shippers and carriers may require you to have more than the minimum in insurance coverage before doing business with you. Often, that number is $1 million in coverage as an extra measure of security.
Intrastate trucking insurance requirements will vary by state. Some states will have guidelines in place that match the ones set by the FMCSA. Others will set their own guidelines. Regardless, it’s imperative to understand all the rules and regulations involving permits and required insurance to operate in your state and beyond.
Since trucking requirements, permits, and insurance can be complex, you should contact Simplex Group to find out more about the items you need to have in place before you start operations.
Thank you so much to Simplex for helping us out with this information for our drivers!