Trucking companies need to have their basic credentials – including operating authorities, tax documents, titles and registrations – squared away in order to keep their trucks in compliance and generate revenue.
While maintaining these credentials may seem simple, the complex nature of the logistics industry can undermine a carrier’s efforts to stay above board. With so many programs, sporadic regulatory changes, numerous agencies involved and deadlines for filing spread throughout the year, maintaining active credentials for an entire fleet can prove daunting.
Unlike with some other regulations, there’s no grace period for basic credentials. Trucks on the road must have valid, active credentials under multiple state and federal programs.
Operating authority
Companies are required to possess different types of operating authorities based on the services they offer. For example, a property carrier, passenger carrier and freight broker would all three possess different authorities.
This also means that organizations providing multiple service offerings may need to acquire multiple operating authorities. This can be confusing and cause temporary service delays for companies that are not well-versed on the rules.
“Plan ahead for this. It typically takes many weeks for your authority to be issued by the FMCSA, and you can’t provide those services until your authority is in place,” said Corrina Peterson, transport editor at J. J. Keller & Associates, Inc.
While every carrier participating in interstate commerce must have an authority, some states also require authorities for intrastate commerce. This means that carriers must be aware of both federal and state regulations in order to ensure compliance.
Additionally, registration requirements do not stop when operating authorities are issued. Once companies have acquired the proper operating authorities, they must renew their USDOT number at least every two years via FMCSA form MCS-150. This form is essentially a carrier identification report.
The consequences for not filing MCS-150 can be severe, ranging from significant fines to USDOT number deactivation. Because of this, most established carriers are well-versed in the importance of filing out this form.
FMCSA, however, is expected to make several changes in 2025. One of those could be the elimination of MCS-150. If this happens, it will be essential for carriers to stay informed about what comes next.
“Staying on top of program changes is critical to compliance. The MCS-150 forms may be discontinued in 2025, if and when a new online process is implemented,” Peterson said.
Taxes
Taxes are another important consideration for carriers working to stay compliant and keep their vehicles on the road. Fuel taxes, in particular, can be confusing for carriers. This is especially true for those just entering the market.
The International Fuel Tax Agreement (IFTA) requires carriers to pay fuel taxes if they operate commercial vehicles over 26,000 pounds in more than one jurisdiction. In order to remain IFTA compliant, carriers must license and decal each of their vehicles. Those decals must also be renewed by the end of each calendar year.
“Be sure to renew in time to get your new decals by January 1. Some states take several weeks to process applications/renewals,” Peterson said.
Like with operating authorities, the consequences of not understanding IFTA regulations can be dire. Failure to pay fuel taxes or renew decals can lead to revoked or suspended IFTA status.
For trucks weighing over 55,000 pounds, another tax comes into play. These vehicles must pay Heavy Vehicle Use Tax (HVUT) to the IRS on an annual basis.
The IRS determines the taxable weight of each truck by adding together:
- The actual unloaded weight of the vehicle fully equipped for service
- The actual unloaded weight of any trailers or semitrailers fully equipped for service customarily used in combination with the vehicle
- The weight of the maximum load customarily carried on the vehicle and on any trailers or semitrailers customarily used in combination with the vehicle
For carriers subject to this additional tax, failure to pay can delay vehicle registration. Proof of HVUT payment is required to register affected vehicles in any jurisdiction, both for the first time and at renewal.
Titles
Compared to navigating taxes and operating authorities, handling titles is relatively simple. This does not, however, make it less important.
It is crucial that carriers remember to update all their credentials – including titles – when there are changes in company name, address or ownership. These changes often occur alongside a myriad of other shifts during mergers and acquisitions.
It is easy for carriers to get bogged down with paperwork during significant business changes, making them more likely to overlook details like title changes. In addition to being out of compliance, titles with old information can lead to a whole host of confusion and frustration for everyone involved.
Registration
Vehicle registration is another key credential that can prove difficult for carriers to navigate. Ultimately, if a carrier operates in more than one jurisdiction, they need valid vehicle registration in all of them.
The International Registration Plan (IRP) is designed to make this task more manageable. IRP is a reciprocity agreement that allows carriers to operate in all 48 contiguous states, as well as the District of Columbia and 10 Canadian provinces, with one registration.
“Vehicles are registered in their base jurisdiction. Fees are based on the percentage of distance traveled in each jurisdiction according to each jurisdiction’s fees,” according to the IRP website. “Vehicles are issued an apportioned license plate and cab card which allows the vehicle to travel through all IRP member jurisdictions.”
Under IRP, apportionable vehicles include those that:
- Have two axles and a gross vehicle weight or registered gross vehicle weight in excess of 26,000 pounds; or
- Have three or more axles, regardless of weight, or
- Are used in combination, when the gross vehicle weight of such combination exceeds 26,000 pounds.
While IRP participation is only required for vehicles meeting the above criteria, owners may choose to register other vehicles under IRP as well. Doing this can make navigating interstate travel significantly less complicated.
“Due to different rules in some states, you may want to apportion vehicles that are less than 26,001 pounds,” Peterson said.
In addition to IRP, companies should know about Unified Carrier Registration (UCR). Unlike with IRP, UCR has very few exceptions. This means almost all motor carriers must be registered with UCR before operating in interstate commerce.
While there’s no UCR credential to carry in the truck, proof of registration under this program is available to roadside enforcement via FMCSA electronic information systems. Failure to obtain this type of registration can lead to costly fines, delays or even out-of-service orders.
With so many moving parts, keeping up with credentials can be more challenging than it may initially seem. The consequences of missing deadlines can be severe, and regulations are constantly in flux.
For carriers struggling to keep tabs on it all, a reliable, experienced compliance partner – like J. J. Keller – can track changes and deadlines to help carriers keep their trucks on the road.
Click here to learn more about J. J. Keller.
The post Key credentials to keep your vehicles on the road appeared first on FreightWaves.
