Why Large Motor CarrierFleets May Change

Their IRP Bases

Bob Pitcher

Vice President, State Laws

ATA

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]

Controversy, cont’d.

• Original drafters debated

“established” vs. “principal”

• Came down on side of carrier flexibility

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

Why Move??

• CUSTOMER SERVICE

• INCIDENTAL JURISDICTIONAL FEES & REQUIREMENTS

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

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

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

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

Customer Service

NEGATIVES:

• Waiting in line

• Limits on time or transactions

• Dealing at local levels

• Delays in paperwork

• Poorly trained, unhelpful staff

Requirements

POSITIVES:

• Electronic titles

• Self-issuance of (all) credentials

• Reciprocity for equipment inspections

• Permanent plates

• Single plate required on tractor

• Carrier-specific plates

Requirements

NEGATIVES:

• Expensive title & transaction fees

• VIN inspection requirements

• Environmental requirements

• Dolly registration

• Lien fees and paperwork

Requirements

NEGATIVES, cont’d:

• Annual stickers for plates

• Special licenses required of carrier personnel

• Proliferating jurisdiction fees

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

Efficiency Can Make A Big DifferenceTo Everybody:

TRUCKING ACCOUNTS FOR 5% OF GDP