Quest News™

December 05, 2017

What is Interstate Commerce?


Interstate commerce is trade, traffic, or transportation that crosses state lines while intrastate commerce operates solely within a single state. This definition may sound simple, but regulations not only look at whether a vehicle, passenger, or cargo physically crosses the state border, they also consider the intent of the transportation. Just because a motor carrier’s route was inside one state, that does not necessarily mean that the transportation is not interstate.

Crossing a state boundary is a prerequisite to interstate commerce, but the definitions found in Federal Regulation 49CFR 390.5, breaks down “interstate” further into three categories.

  • Between a place in a state and a place outside of the state (including a place outside of the United States). This is the simplest scenario where goods are taken from one state to another. For example, products were manufactured in Dallas, TX and brought to retailers in Sacramento, CA.
  • Between two places in a state through another state or a place outside of the United States. This is when cargo starts and ends in the same state but traveled through another state or country. For example, cargo is picked up in Juneau, AK. It goes through the Yukon Territory in Canada to get to its destination in Anchorage, AK.
  • Between two places in a state as part of trade, traffic, or transportation originating or terminating outside the state or the United States. This is when cargo goes through two places in the same state and its destination or origin is in a different state or country. For example, goods were produced in San Diego, CA and sent to Los Angeles, CA, where it goes on a barge heading to China.

Whether a transport is interstate or intrastate will determine the carriers that you hire and authority that you have. When you are working intrastate, you must comply with state, local regulations, and applicable federal regulations. When you operate interstate, you must comply with Federal Motor Carrier Safety Regulations in addition to the state and local regulations of any state that you travel through. Furthermore, it is taken into account when determining which parties are at-fault in case of an accident. Regulations vary from state to state, so be sure you know what they are in your area of transportation. To learn more about Freight Broker Surety Bonds, Cargo Insurance, Truck Insurance, and other coverages, visit our website at avalonrisk.com.

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