As recently as two years ago, most of the work of the Sanchez Paving Co. in Markham, IL was within a 30-mile radius of the company’s yard, says Tim Waters, the company’s resident engineer.
Lately, “much of the work is moving further away to as many as 75 miles from our yard,” says Waters. “We have had to purchase heavier-duty trailers for the longer hauls. We have had to outsource some equipment moves as well.”
Those actions have taken away from the company’s “already diminishing” profit margins, notes Waters.
While it can be challenging for grading and excavation operations to take on work across jurisdictional lines, it’s not impossible. More companies are doing so, which means the companies’ projects are spread over a wider area, necessitating increased—and sometimes unplanned —equipment transport over long distances to cross those jurisdictional lines.
It calls for increased time management, planning, knowing the rules and regulations of each jurisdiction, and sometimes seeking help from outside of the company.
“Some states have their own state-run DOT programs and may have different regulations,” says Douglas L. Denard, vice president of field operations and administration for the Hertz Equipment Rental Corp. “Not only must the contractor be knowledgeable of the federal regulations, but they will be responsible to know the different state regulations they intend to operate in or pass through.”
Sanchez Paving Co.’s challenges in taking work across jurisdictional lines but making it work for the bottom line are being shared by an increasing number of companies throughout the United States.
Stephen Flowers, national sales manager for Interstate Trailers, notes that contractors are buying more trailers to transport equipment to handle jobs in an increasingly wider geographic area as well as outsourcing the equipment transport. He’s getting calls from contractors taking bids for jobs that are up to 150 miles away.
“There are companies willing to do work anywhere in the country—they will go from their home base in Maine to southern California,” says Flowers.
Russ Woelke, Towmaster’s regional sales manager for Great Lakes & Southeast, also observes that contractors are spending more time and money getting to job sites.
Woelke says that in order to provide services on the jobs on which they’ve successfully bid, contractors are buying more trailers as well as outsourcing equipment transport, depending on the company’s size and the type of equipment needed.
“A lot of companies will overbuy on trailers to plan for the future as far as carrying more than one piece of equipment,” says Flowers. “There were a lot of guys who used to buy a big trailer to carry two pieces of equipment on, but now to get around certain areas, they’ll buy two smaller trailers.”
That often depends on the size of the company and its location, he adds.
“A lot of our customers in New York and in big metropolitan areas have to get around smaller areas, so they’re trying to get the trailers as small as possible and still carry the equipment safely,” says Flowers. “There are guys in Texas who say ‘Give me the biggest trailer you’ve got’ and put half the weight that it can carry on it.”
Mike Trom, district sales manager for Trail King, points out every state is like an “independent country” when it comes to trucking.
“Every time you cross a border, you may have to operate under a different set of rules and regulations,” he says. “Permitting can be a daunting task for the inexperienced contractor on interstate hauling. Axle loadings can vary significantly due to required axle spacing, number of axles in a group, width, tire size, frost laws, and so forth.”
Trom says how contractors who are bidding and accepting jobs across jurisdictional lines approach those jobs depends on if their company has a dedicated transportation department.
“In order to travel across the country, you are required to have fuel cards, authority in the states in which you are traveling, log books showing mileage traveled per state, fuel purchased from each state, equipment inspections, and so forth,” he says.
The company may possibly have to have different equipment due to the differences that all of the states have regarding weight, height, and length limits. What can get a construction company in trouble is when municipalities also require permits and fees to cross their streets and bridges, Trom points out.
“Most contractors assume they are covered with the permits issued by the state only to find they have violated a local municipality’s restriction,” he adds.
Most companies will purchase more trailers if multiple pieces of equipment are involved on a job and frequently moved due to time restrictions and convenience in contrast to outsourcing equipment transport, Trom says.
That applies to all sizes of trailers, although how they are registered state-to-state can vary “quite a bit,” Trom notes.
When in doubt on what a particular jurisdiction requires, a contractor can pull up the website of a state or its department of transportation to obtain pertinent information regarding the safety, legal, and regulatory issues they’ll likely encounter and obtain contact phone numbers to get official information.
“Permit services are available and will do the work for you for a fee,” Trom points out.
Having proper truck and trailer tags is one of the primary considerations when taking work outside jurisdictional areas, Flowers says.
“There are certain bridge laws as far as capacity on a certain numbers of axles,” he says. “California is pretty strict: If you have three axles there, they have to be spread further apart. A lot of companies can’t run in California and in other states. There are states that have virtually none of those regulations.
“Especially if you’re carrying a big load, definitely look up all of the rules,” he advises. “The state troopers and police departments are looking for every little thing they can hit you for, so you need to make sure you follow the rules.”
Contractors who are not equipped to handle all of the rules may want to outsource the equipment transportation, but should check with the state’s department of transportation on compliance, notes Flowers.
“I would check with every state I was going to cross before I even started on the road,” he says.
When crossing jurisdictional lines, it is important to know that DOT regulations apply to vehicles with a gross vehicle weight rating (GVWR) or gross combination weight rating (GCWR) of more than 10,000 pounds and vehicles with a GVWR of more than 26,000 pounds, which requires a commercial driver license, Denard says.
Depending on the weight or combination weight of the vehicles, the contractor’s vehicle may require a US Department of Transportation (USDOT) number, and its drivers may need a commercial driver license, medical cards, and a driver qualification file, says Denard.
“If crossing state lines, the driver will be required to maintain record of duty status logs and vehicles inspection logs,” he adds.
According to the Federal Motor Carrier Safety Administration (FMCSA), companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce must be registered with the FMCSA and must have a USDOT Number.
The number serves as a unique identifier when collecting and monitoring a company’s safety information acquired during audits, compliance reviews, crash investigations, and inspections.
One of the qualifiers for a required USDOT number is that if a vehicle has a GVWR or GCWR, or gross vehicle weight or gross combination weight of 4,536 kg (10,001 pounds) or more, whichever is greater and is involved in interstate commerce, such as:
- Between a place in a state and a place outside of such state (including a place outside of the United States)
- Between two places in a state through another state or a place outside of the United States; or
- Between two places in a state as part of trade, traffic, or transportation originating or terminating outside the state or the United States.
In addition to federal regulations, there are a number of states that require commercial motor vehicle registrants to obtain a USDOT Number. These states include: Alabama, Alaska, Arizona, Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, New Jersey, New York, Nebraska, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, and Wyoming.
For more information and assistance, contractors can check with the Federal Motor Carrier Safety Administration at www.fmcsa.dot.gov.
There are many situations in which contractors, even with their own hauling fleet, might be well-advised to outsource the job.
“Often they will be required to purchase or rent a large or heavy piece of equipment to perform a job more efficiently that requires multi-axle configurations to transport, meaning the use of Jeeps and boosters in addition to the base trailers themselves are required to move the equipment,” Trom says.
“If this equipment is moved infrequently, it is often more cost-effective to use a third-party carrier,” Trom adds. “The cost of the trailer and additional tare weight will often make a trailer useless for items that are moved 90% of the time. Multi-axle trailers can be very complicated to operate and if not loaded properly, the fines can often exceed the cost of having a reputable third party move the equipment.”
Trail King often networks with various trucking companies and contractors to help them get a job done, says Trom.
“For the most part, the contractors are very willing to work with each other in resolving transportation problems, since they know someday they may need the favor returned,” he says.
Outsourcing job tasks does impact schedules and calls for flexibility.
“You are at the haulers’ mercy and schedule,” says Trom. “Most contractors that have a reputable hauler will stick with them due to the service provided. When traveling across the country, this can be a difficult task. The low price provider is only a bargain when the service provided meets the expectations of the customer.”
Management practices can be affected as well.
“Depending on their size, some companies have dedicated transportation and/or equipment managers,” says Trom. “In others, the boss is the operator, driver, and transportation manager.”
Woelke agrees that when outsourcing, “the contractors are at the mercy of the transportation schedule and have to plan further ahead to make things work, both with their fleets and the rental equipment needed.
“They have to delegate more responsibility to their job foreman and transportation coordinators.”
Running the numbers to see if it’s less expensive to outsource equipment transportation may be another cause for doing so, Flowers says.
“If you’re going to work in Texas from New York, you could probably find someone in Texas to handle the transport for you if you happen to get the job,” he says.
CT Corp. is a Wolters Kluwer company that specializes in governance, compliance, and regulation management. Among the clients with whom the firm works are construction industry professionals. The company’s compliance experts help clients with many tasks, including working across state borders.
“In terms of regulatory issues—whether you are a contractor, engineer, or material supplier—understanding the process to grow across state lines is critical to maintain legal compliance,” says Jennifer Friedman, chief marketing officer of CT’s small business segment.
“Every state has different laws and regulations when it comes to doing business within that particular state,” says Friedman. “If your company receives contracts, has a physical presence, or employs in a state, you will most likely be required to be ‘on record’ in that state,” she says. “To be on record, you can opt to file for foreign qualification or incorporate a new LLC.”
Foreign qualification is a process business owners can use to legally file a Certificate of Authority for their business in a new state, Friedman says. A business also can opt to incorporate a new LLC for each state in which they are present.
Doing so will make each company a separate entity, she says.
“Many states require that one or more of the principals of a company be certified by the state for the type of work the company will perform,” says Friedman, adding that they may be required to pass a licensing requirement in addition to obtaining business licenses.
“There also are general and specialty licenses depending on the type of construction work that is being done,” says Friedman. “It is crucial to know what business licenses are required in advance of starting work to avoid fines, penalties, and suspension of the work site.”
Many new and growing small business owners may not understand potential challenges down the road when doing work across state lines, Friedman says.
“Thus, having a trusted advisor who is good at handling any issues that require someone onsite or in-state is critical,” she says. “It is a tremendous value to be able to rely on a legal compliance services provider who can seamlessly operate as a registered agent as well as offer tools that help ensure documents like annual report filings and business licenses are on time.”
