Trucking businesses cover much ground, whether operating in a single state, across state lines and sometimes even countries. The difference between trucking and commerce for intrastate versus interstate businesses is significant, especially regarding rules, regulations and insurance requirements.
Below, you’ll learn about the terms interstate and intrastate so you can get a better idea of how they vary. You’ll also learn about the significant differences between intrastate and interstate trucking, insurance and commerce.
What Is Interstate Driving?
Interstate driving refers to transportation, traffic or trade across the United States. Interstate trucking or commerce meets three general criteria:
- Travel between places outside a state to other states or outside the U.S.
- Travel between two places within a state that requires going through another state to reach the destination.
- Travel between two places in a state involving trade, traffic or transportation of goods that originate or end outside the U.S.
The movement of goods characterizes interstate trucking, set forth by the shipper’s intent when transporting them. Interstate truckers follow different laws than those driving within the same state, even if the route is within a single state’s boundary, so long as the shipment’s intent is for interstate commerce.
Interstate truckers must follow federal government rules and regulations and the Federal Motor Carrier Safety Regulations.
What Is Intrastate Business?
Intrastate trucking or commerce refers to transportation, traffic or trade restricted to one state. Companies or customers that operate solely in one U.S. state are conducting intrastate business. Intrastate truckers only have to follow their specific state’s rules rather than federal regulations. Many states follow the FMCSR’s rules but may make a few exceptions or changes to suit the needs of intrastate commerce.
Differences Between Interstate and Intrastate
Understanding the distinction between interstate and intrastate business is essential because the laws that govern each are different. Interstate truckers follow separate laws for drivers, vehicles and companies than intrastate truckers. Understanding the difference helps ensure that your business complies with the applicable laws.
Below, you’ll find the difference between intrastate and interstate trucking, insurance and commerce to help you better understand the requirements for each.
There’s a significant difference in trucking for interstate versus intrastate businesses. The first notable difference is the type of trucks used.
- Intrastate trucking includes vehicles like tow trucks, dump trucks, concrete mixing trucks, garbage trucks and bucket trucks.
- Interstate trucking includes trucks ranging from semi-trucks, 18-wheelers, tractor-trailers, flatbed trucks, tanker trucks and reefers.
Additionally, truckers on interstate routes must get a USDOT number, which acts as an identifier the federal government uses to track safety information regarding motor carriers. This number allows the FMCSR to quickly pull insurance information, history and safety records for a commercial vehicle. A DOT number can verify a commercial truck’s insurance status if an accident occurs. All interstate truckers must have a DOT number, and many states also require DOT numbers for intrastate trucks.
Interstate truckers will also need an operating authority or an MC number. Your operating authority acts as a registration with the federal government, providing you with information about the type of business you can run and what cargo your truck can legally transport. Your operating authority will also help determine how much insurance you need. Interstate trucks will need an MC number if they:
- Operate as for-hire, offering their services for a fee or compensation
- Transport goods or arrange for transport across state lines
- Transport or arrange transportation for passengers across state lines
There are a few exceptions to needing an MC number alongside a DOT number, which include operating intrastate commerce, hauling your property and transporting personal construction equipment to and from work.
There are fewer federal regulations and requirements for intrastate truckers versus interstate truckers, making it easier to comply with state rules and regulations. However, it’s essential to understand the laws within your state to remain compliant. Check with your state’s transportation department to learn more about the specific regulations intrastate truckers must follow.
One main difference between intrastate and interstate business is the insurance requirements. For example, the FMCSR requires that for-hire general freight carriers have liability insurance coverage of at least $750,000. Some private and for-hire carriers transporting hazardous waste and specific oils must have liability insurance coverage of at least $1 million. In comparison, other carriers of hazardous materials must have coverage of $5 million.
Interstate businesses can reference their operating authority to determine how much coverage they need. Getting proper coverage for your business is essential to ensure you have protection in an accident or unexpected event.
An operation can also grow from intrastate to interstate, requiring additional insurance coverage for drivers who cross state lines to transport goods and services. Knowing the levels of coverage can help you determine if you need interstate or intrastate insurance coverage.
The primary differences between interstate and intrastate commerce are where they do business and the rules and regulations companies must follow. Interstate commerce refers to products or services offered across state lines. These businesses must follow the rules and regulations set forth by the federal government and agencies such as the FMCSR.
Intrastate commerce occurs within a single state, and intrastate businesses must follow their state’s laws. While many states adopt FMCSR regulations, some make changes or exemptions, so you must thoroughly understand your state’s requirements.
While there are some significant differences between interstate and intrastate commerce, there are also similarities. Some requirements are consistent regardless of where truckers or businesses operate. For example, rules that all interstate and intrastate businesses have to comply with include the following:
- Mandating commercial driver’s license requirements for their drivers
- Insuring commercial trucks, though the level of coverage varies
- Requiring substance testing for drivers
- Meeting driver qualifications
- Transporting hazardous cargo safely and within federal regulations
Some differences between intrastate and interstate commerce are minor, such as truckers having to stop at weigh stations, follow different speed limits and restrict work hours, but generally, these differences only vary minimally between states. Some of the more notable differences, such as insurance requirements, significantly affect how you must prepare a business to operate for interstate commerce.
Stay in Compliance With Hazmat School
Interstate and intrastate commerce must follow similar regulations when transporting hazardous materials to ensure public and property safety. Compliance ensures you’re protecting your business, employees and consumers, which should be a priority for any company. Hazmat School can help you with our online training solutions geared toward building a safety culture within your organization.
You and your employees can complete our courses at your pace, allowing you to fit safety training into your schedule. As soon as you complete our training, you’ll receive a certification. We also have remote instructors available 24/7 for your convenience. We prioritize safety, so we’ve made our courses affordable, allowing you to stay within budget while making your business and employees compliant. Contact us today to learn more about how we can help!