Shirley Hammond’s family trucking company, Muskoka Transport Ltd., is in the business of moving freight. But these days it feels like the Bracebridge, Ont., company’s heaviest hauls involve government paperwork.

Hammond handles the bewildering administrative jobs most operations guys won’t touch-insurance, fuel tax, and, especially these days, vehicle licensing. After the Christmas holiday, job-one was an application for the International Registration Plan, a comprehensive licensing agreement Ontario will be a party to starting April 1.
“We have to get all the I’s dotted and the T’s crossed by the first week of February,” she says. “We have to gather information about the trade-in value of the vehicles, the factory price . things we’ve never needed to have before. Thank heavens for e-mail, because our phone bill to the prorate office in Toronto would be astronomical.”

The most important decisions ahead will involve where to license each of Muskoka’s hundred-and-sixty or so company and owner-operator power units. “We run 48 states and a couple of provinces. What about places we might go?” she wonders. “Do we register everywhere? How many trucks do we register with IRP? What about our spares, the old trucks you keep around for emergency runs to New York or wherever? These are questions we’re working through.”

At least in the short-term, the decision of the seven provinces east of Saskatchewan to join the International Registration Plan-IRP-has made life more complicated for carriers based there and doing business outside the bounds of their home province. Like Ontario, Quebec and the four Atlantic provinces face an April 1 IRP turn-on date. Manitoba begins a month earlier, on March 1, to coincide with its annual vehicle registration period. The 48 contiguous states and British Columbia, Alberta, and Saskatchewan already belong.

In the weeks leading up to the deadlines, however, many carriers are still grappling with IRP basics. “We’re fielding questions that indicate a lack of knowledge about how IRP works,” says one vehicle registration manager with the Société de l’assurance automobile du Quebec. “What they care about most is when they’re getting their cab cards. They’re not thinking about how to manage their vehicle licensing in the most appropriate or strategic way.”

How it Works

The intent of IRP is to create standards for apportioning and distributing registration fees for commercial vehicles traveling in two or more IRP-member jurisdictions. Vehicle registration fees are calculated, billed, and collected by your base jurisdiction, which then distributes them among IRP member states and provinces based on the number of miles you travel in each. Fees are based upon mileage and weight information submitted by the carrier.

The agreement covers most commercial power units with a gross vehicle or combination weight in excess of 26,000 pounds (11,793 kg), or any power unit with three or more axles. (Vehicles that are exempt from IRP include government-owned vehicles; vehicles displaying a “restricted” plate such as dealer or farm; and city pickup and delivery vehicles.) Each truck registered under IRP receives one “apportioned” license plate from its base jurisdiction and one registration document in the form of a cab card, which must be kept with the vehicle. The cab card lists each state or province where you want the vehicle to operate, plus the vehicle’s registered weight. The plate and cab card are recognized in most jurisdictions as valid registration when your truck travels there.

For trucking companies, the result is more even-handed competition, says licensing expert Sandy Johnson, whose Calgary-based consulting practice, Total Trucking Management, specializes in trucking issues, and tax and licensing in particular.

“The philosophy behind IRP is to promote the fullest use of the highway system by creating fleet flexibility,” she says. “That means the guy who registers in Florida and the guy who registers in Ontario, if they work for the same shipper and run on the exact same roads, will pay the exact same fees. Furthermore, they won’t face the threat of being locked out of a marketplace because some state permitting office decides to deny them entry.”

Carriers currently filing under the Canadian Agreement on Vehicle Registration (CAVR), which will fade away come April 1, will be familiar with the prorate process. Under IRP, you file a registration application with the jurisdiction where your business is based and your records will be kept (hence the name, “base jurisdiction”).

Like CAVR, IRP gives you the option to group vehicles into “fleets” based on areas of travel. A vehicle can also be registered for different weight classes in various jurisdictions, so it’s important that the vehicle not operate in any state or province at a heavier weight than what’s listed on the cab card. Remember, you have to qualify for the weight you request on the cab card, and you generally have to get a permit if you’re running overweight (even if that weight is what’s listed on your cab card).

Here’s where operations people need to get involved with the IRP application, Johnson says. “Imagine your truck gets diverted to Pennsylvania because of bad weather, and you decided not to include that state on its cab card,” she explains. “Or you decided to create multiple fleets-one to run Manitoba-Minnesota, another to go Manitoba-Western U.S., and another for Manitoba-Saskatchewan. You’re going to drive your dispatcher insane trying to figure out which trucks are licensed to go where.”

Johnson’s rule of thumb? Keep it simple. Start by creating a single fleet that gives you a lot of latitude. Fine-tune it after a year. And if you make more than one trip a month to a jurisdiction, license (versus single-trip permitting).

What if you don’t want to register trucks with IRP? The program is optional, after all. You can buy single trip permits whenever your trucks operate outside your base jurisdiction. Or you can risk the fines and downtime associated with operating an unregistered vehicle. The same scenarios apply if you register with IRP but operate without a trip permit in jurisdictions not listed on your cab card.

For carriers just entering the program, perhaps the biggest change will be the exposure to audit. Unlike CAVR, IRP has specific rules about audit frequency.

Stay on top of your individual vehicle mileage records, or IVMRs. In most cases, the distance information you need for the IRP IVMR is already being collected and submitted for International Fuel Tax Agreement purposes (but check the rules: you might have some vehicles that qualify for IRP but not IFTA). Also remember that IRP operates on a July 1-June 30 schedule for calculating mileage, and not on a calendar year.

“Most record-keeping problems involve neglect, not confusion” says Beth Wendorff of Wendorff & Sons Trucking, a family-run, 12-truck cattle-hauling business out of Raymond, Alta. “Collecting mileages and calculating fees is not a fun job, especially if you have to constantly be on your drivers and owner-operators about getting their receipts and trip sheets completed. Even if it means holding payment from our guys, they have to get those trip reports in.”

You’ll be glad you did when the auditor comes, says Wendorff. “We’ve been through it, and there was a discrepancy that was going to cost us something like $3000,” she explains. “The licensing agency we were using at the time paid the penalty because we were able to show that the mistake was theirs, not ours.”

Wendorff says her story illustrates the need to find reputable tax and licensing help if you decide you don’t want to handle the job yourself. Carriers should ask for a written quote from potential service bureaus that clearly shows how much the service bureau is charging for its work. Quotes that lump service fees with your registration fees should be avoided.

Above all, never forget that it’s your company’s name on the registration forms. “I check and double-check to make sure they have exactly what they need,” Wendorff explains. “And I keep backups here so there’s plenty of paper covering everything.”

Come April 1, Shirley Hammond says Muskoka Transport will be ready for IRP. “Right now we’re just trying to deal with the initial scramble-the mad scramble-to present everything the way the province and IRP want it, so when the compliance officers do their job no one has to be aggravated,” she says.

Hammond’s goal is to have zero vehicle downtime associated with licensing. If you get stopped at the border, it’s not just the fine you pay, she says. It’s lost opportunity. It’s the running around trying to get your problems squared away. It’s the time taken away from other tasks. And it’s an expense no trucking company can really afford.