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Understanding Interstate vs Intrastate may be difficult. Let’s break it down. Most trucking companies have interstate authority with the Federal Motor Carrier Safety Administration (FMCSA), which means those carriers can transport goods across state lines.
Some trucking companies only transport goods within one state, so those companies often elect to only have intrastate authority. Intrastate authority means the carrier will only transport goods within that one state and not cross into another state.
Carriers who only want intrastate authority should apply with their state's department of transportation. Common states with carriers that have only intrastate authority include California, Illinois, and Texas. Those states are also the most regulated for intrastate carriers as well.
Being an intrastate carrier can have its appeal as insurance premiums may be lower and carriers with this type of authority will not be subject to a FMCSA compliance audit. However, there are downfalls. Those carriers with only intrastate authority cannot cross into another state while transporting goods, which means that when a shipper/broker is offering a hot load into another state, the carrier cannot take it.
Rick Malchow, a safety and compliance consultant with J.J. Keller & Associates advises that carriers just get their intra-and-interstate authority; that way, when capacity is tight and the rates are hot, the trucking company can take advantage of both in-state shipments and shipments that cross state lines. (12:25 mark)
Watch out truckers, shippers, and brokers! If an interstate carrier transports a shipment that does not cross state lines, that carrier must also have intrastate authority with that particular state, or the carrier could get a nasty fine.
So, to those interstate carriers who do not have intrastate authority in Texas, don't dilly dally (serious technical terms being used here) around in Texas moving loads between Houston and Dallas or you could get in trouble with the TX DOT. (19:29 mark)
Shippers and brokers are often left scratching their heads at how to vet intrastate carriers because such authority cannot be verified on SAFER. Fortunately, some states have websites that allow a shipper or broker to verify the carrier’s intrastate authority. For example, here are the links to California, Texas, and Illinois websites to verify an intrastate carrier’s authority.
Since these websites can sometimes be out-of-date, ask the carrier for a copy of its intrastate authority and analyze the document to make sure there are no inconsistencies (i.e., fraudulent). Don’t forget, always verify the insurance by calling the carrier’s insurance agent and asking for a copy of the COI to be sent directly from the insurance agent.