Importance of Interstate Trucking or Transportation
Despite the many advances in technology, interstate trucking or transportation is still a preferred choice when it comes to delivering goods nationwide. Practically all U.S. commodities are transported by truck at certain points in the distribution process. And since about 82% of communities in the country are served exclusively by trucks, it is no wonder then that an estimated $ 543 billion in revenues is expected to end up in the trucking industry at the end of 2008.
By the end of 2008, the trucking industry is expected to deliver at least 9.3 billion tons of freight. According to the American Trucking Association (ATA), this estimate covers more than 63% of the total freight deliveries for the United States.
This is one of the reasons why more and more people and companies are switching to the trucking industry; they realize its value and potential for success.
However, before an interstate trucking company can operate, it has to acquire interstate authority in order to obtain permission to carry various goods and items within the state and across other states. It is considered the most important legal permission and functions like a business license. Normally, the permission is obtained immediately but its activation may take around 3 weeks.
Formerly issued by the Interstate Commerce Commission, interstate authority is now issued by the Federal Motor Carrier Safety Administration (FMCSA). This permission, or license, must be obtained together with truck insurance and cargo insurance. There are basically 2 types of interstate authority for trucking companies. Common Carrier Authority is required to file both liability and cargo insurance with the FMCSA. On the other hand, Control Carrier Authority is expected to file only liability insurance with the FMCSA. Other forms of authorities like household goods carriers and broker and freight forwarder authorities, usually deal with truck business involving middlemen or brokers.
A middleman, or a freight broker authority, acts as the bridge between the producers or manufacturers and the truckers. The freight broker is considered an expert in the trucking industry and has a good reputation in both the trucking and business communities. A freight broker authority must possess technical skills or expertise and must have background in management and accounting, especially nowadays when technology is constantly changing and advancing.
In difficult or doubtful times, a freight broker authority is who manufacturers will turn to, especially when freight demand overpowers carrier capacity. This is why it is important for the broker to be familiar with the ins and outs of the business. He should also be licensed and insured. An interstate truck’s “license” is called an ICC number.
As a result of the cessation of the Interstate Commerce Commission, the term ICC number was changed to MC (Motor Carrier) number. This important number is a mandatory permit that truck drivers should carry every time they travel.
Since trucks are insured and given an ICC number, brokers and manufacturers will not have a difficult time tracking them down when there is a need to.
Trucks that travel across different states carry a wide variety of commodities. Some trucks transport goods from the furniture industry while a good number of interstate deliveries are made for wholesale and retail companies. Specialized services, like newspaper delivery, are also a common thing. The bulk, however, comes from the retail and wholesale trade companies – making up 25% of the 2006 2.9 million trucking industry total. Other industries benefiting from interstate trucking businesses include the construction and manufacturing companies.
Since the trucking industry is more flexible compared to other modes of transportation, the interstate authority has issued more legal permissions to interstate truckers than to those operating delivery businesses via air, sea, or rail transportation. Interstate trucking continues to be an effective mode of transporting goods because trucks are able to reach practically almost all locations within the United States. A freight broker authority will exert more effort in convincing manufacturers or producers to transport their commodities or goods through other modes of transportation that have limited reach and services according to their route flexibility.
No matter what technology has to offer, like expanded railways or revolutionary shipping vessels, truck drivers will remain to be a constant presence in national and interstate highways. They will continue to deliver a variety of goods that range from perishable fruits to canned goods to cars. Interstate trucking is the only authorized delivery system (with MC/ICC numbers) that can deliver commodities on a door-to-door basis. Even producers, who transport their goods through ship, train, or airplane, still use trucks at a certain point in their distribution process. And with most modern improvements, like cushioned seats, high technology entertainment systems, better ventilation, and bigger cabs, truck drivers will be able to do their driving in a more comfortable manner and hence, reach their destinations quicker.