First let me explain a little bit about the Interstate Commerce Commission or ICC.
The ICC was set up by the federal government to enable the trucking industry to haul regulated commodities across state lines. Each authority required an insurance filing to activate it and keep the ICC Truck Permit valid. The filings are made under a commercial auto liability policy. The insurance filing was to act as proof of financial responsibility for the trucker. The basic limit required is $750,000. CSL (combined single limit). The limit required for hazardous commodities can range from $1,000,000. to $5,000,000. CSL depending on the materials being transported.
In the beginning the ICC regulated what kind of manufactured goods (commerce) truckers could carry on which highways. For instance, one trucker may have authority to haul lumber from Las Vegas, NV to Los Angeles, CA along the Interstate 40 corridor. If a different trucker had authority to haul lumber from Phoenix, AZ to Los Angeles, CA on the Interstate 10 and his customer needed lumber moved from Las Vegas to Los Angeles he would need permission from the first because he did not have authority to haul along that route. Therefore the feds regulated what specific routes a trucker would have authority to haul specific manufactured goods. As you can imagine, pieces of authority that were broad in which products granting authority to haul along highly populated routes were quite valuable while unregulated commodities like produce, feed, grain, and cotton could be hauled anywhere by anyone and did not require an ICC permit. This method created many problems for the public, the feds and state governments upon who’s roadways they traveled. Truckers started leasing their authority to other truckers to run favorable routes and soon it was very difficult to tell who was responsible for damages to the public or goods being hauled. A lot of time was spent deciding the responsibility in court. It also led to states requiring permits or filings to travel on their roadways to make sure truckers had insurance to pay for damages to the public.
The current system was developed to solve some of the problems with the original system of regulating commerce and routes and allowing more truckers to haul broader commodities along previously restricted routes. This process was termed deregulation and the federal law developed was called the Motor Carrier Act of 1980.
This law set up 5 basic guidelines of ICC Truck Permits. Each are required to have an insurance filing held by the feds in order for the truckers authority to be valid and useable.
1) Common Carrier
The Common Carrier has authority to haul regulated commodities and is required to file tariffs (rates for hauling goods). The type of authority was more popular in the early of deregulation because tariffs were required before the Motor Carrier Act of 1980.
2) Contract Carrier
Contract Carriers has authority to haul regulated commodities but did not post tariffs. Instead contracts were used to do business with their customers. This authority has become the most popular due to ease of use.
3) Private Carrier
Private carriers have authority to haul their own regulated products.
Brokers have authority to load regulated commodities on motor carriers that have an ICC Truck permit. Brokers are not required to post a liability filing. They post a $10,000. bond that guarantees payments to regulated truckers for loads hauled.
5) Freight Forwarders
This authority allows for docking freight from one regulated carrier and loading the freight on another carrier. The insurance filing required is generally made under a general liability policy. The authority is not granted to transport the freight only to dock and load on another carrier.
Please remember that this description is only a brief outline. After my twenty-five years in the truck insurance industry, I found out no one knows it all. If you would like to see what I’m up to now, see the info below and visit my blog.