A few weeks ago I got a call from the owner of a hot shot service in Alberta. He read my April column about the Full Reciprocity Plan, or FRP, and had a question.
FRP, you might recall, streamlines the International Registration Plan. It eliminates any provisions related to estimated distance. Instead, fees are based on actual distance, and your apportioned vehicle gets one cab card with all IRP jurisdictions on it so it can travel to any member state or province during the license year, any time, without permits.
“We need that,” the hot shot owner said. “Can we do that?”
Like so many regulatory issues, big truckload carriers dominate the discussion about the benefits of prorate. Not enough specialized carriers have gotten the message about FRP even though it might help them the most.
Consider the hot shot carrier. Hot shots get paid to deliver a dedicated load, fast (there’s one in Edmonton with the slogan, “From A to B, don’t stop to pee!”). These carriers never know where they’re going on any given day.
Applying for trip permits takes time that no one really has. It’s the same for wreckers and other carriers in “emergency” service. IRP is ideal for these fleets. Yet traditionally they avoid it.
Pick your poison
If you think trip permits are a pain, try prorating registration fees when you don’t know where your next job is going to take you. I mean, how do you estimate distance when two years ago you travelled in Alberta and British Columbia, last year you were in Alberta, Saskatchewan, and Montana, and this year, who knows? What do you put on your cab card? Let’s say you’re based in Alberta and didn’t travel in Saskatchewan last year but you might this year. Before FRP, you’d have to estimate distance for Saskatchewan, pay fees for distance you haven’t travelled, and get new cab cards.
What a mess!
It’s expensive, too. When you’re renewing a fleet, the distance used to calculate your fees is from the previous year (the reporting period is July to June). Imagine the distance you accumulated between July to June of the previous year as a complete pie. That pie is then divided out on a percentage basis to all of the jurisdictions you travelled to during the reporting period. To add a jurisdiction, you need a slice over and above what’s in your pie tin. You’re paying more than 100% of the amount you should be paying for license fees.If you add a bunch of jurisdictions, it makes for a very expensive pie.
Why FRP works
FRP takes all of that away. If you’re an existing carrier renewing your fleet this year, you’re going to report all actual distance accumulated during the distance-reporting period. The beauty is you pay for only the jurisdictions where you travelled in the previous year regardless of where you need to travel this year. It eliminates estimated distance on renewals and assesses fees based on actual operations. And when you get your cab card it will have every IRP jurisdiction on it, giving you the ability to help a customer at the drop of a hat.
The hot shot, wrecker, and emergency freight haulers I know got into the business because they want a “go anywhere, anytime” type of job. If you’re running irregular routes and have been put off by prorate in the past, FRP – and the flexibility it gives you – make it worth another look.
Sandy Johnson is the founder and managing director at North Star Fleet Solutions in Calgary. The company provides vehicle tax and license compliance services for trucking operations ranging from single vehicles to large fleets. She can be reached at 877-860-8025 or northstarfleet.com.