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Why Large Motor Carrier Fleets May Change Their IRP Bases

Why Large Motor Carrier Fleets May Change Their IRP Bases. Bob Pitcher Vice President, State Laws ATA. A Controversial Issue. Basing is governed by IRP §210:

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Why Large Motor Carrier Fleets May Change Their IRP Bases

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  1. Why Large Motor CarrierFleets May Change Their IRP Bases Bob Pitcher Vice President, State Laws ATA

  2. A Controversial Issue • Basing is governed by IRP §210: • “Base jurisdiction” means, for purposes of fleet registration, the jurisdiction where the registrant has an established place of business, where distance is accrued by the fleet and where operational records are maintained or can be made available…. [not substantially changed in the Rewrite]

  3. Controversy, cont’d. • Original drafters debated “established” vs. “principal” • Came down on side of carrier flexibility

  4. So Why Move?? • Level of Registration Fees? • NOT under IRP • Sales or Property Taxes? • NO: large fleets are already in exempt jurisdictions • Moving a Large Fleet is Expensive

  5. Why Move?? • CUSTOMER SERVICE • INCIDENTAL JURISDICTIONAL FEES & REQUIREMENTS

  6. A Little Cost Can Make A Big Difference • Trucking is a low-margin business • Motor carrier revenue/mile declined from 1980 to 2003 by 38% (adjusted for inflation) • Average carrier profit, 1993-2002: 1.9% • Per truck, that’s $3400/year or $0.03/mile

  7. Increasing Costs 2004-05 very good years for business, but: • Industry will pay $85B more for fuel this year and probably next • We’re short 11,000 drivers & counting • Trucks started to cost $20,000 more in 2004; it will happen again 2007 & 2010 • Pressure from competitors and customers never lets up

  8. Incentives • Jurisdictions fight over other industries with tax incentives – but not trucking • Successful fleets have learned to be as efficient as possible • No shame in going where it’s easiest and most efficient to do business

  9. Customer Service POSITIVES: • Can-Do attitude • Accessibility of expert assistance • Fleets assigned specific agency reps • One-stop shops • Electronic application/processing/payment • Support of management

  10. Customer Service NEGATIVES: • Waiting in line • Limits on time or transactions • Dealing at local levels • Delays in paperwork • Poorly trained, unhelpful staff

  11. Requirements POSITIVES: • Electronic titles • Self-issuance of (all) credentials • Reciprocity for equipment inspections • Permanent plates • Single plate required on tractor • Carrier-specific plates

  12. Requirements NEGATIVES: • Expensive title & transaction fees • VIN inspection requirements • Environmental requirements • Dolly registration • Lien fees and paperwork

  13. Requirements NEGATIVES, cont’d: • Annual stickers for plates • Special licenses required of carrier personnel • Proliferating jurisdiction fees

  14. Why Move? • No advantages in registration fees or major taxes • No advantage in going to a place that doesn’t want you • Benefits come in increased customer service & effiencies

  15. Efficiency Can Make A Big DifferenceTo Everybody: TRUCKING ACCOUNTS FOR 5% OF GDP

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