When your company merges with or acquires another company that operates DOT-registered vehicles, you're required to update the vehicles' registration and credentials to operate them legally. Because there's no compliance grace period for having the proper operating authority, timing is key to handling these tasks.
Understandably there's a lot to consider when structuring a merger or an acquisition. When done right the professional help of attorneys and accountants are brought in upfront to help structure the "deal."
But what about DOT authority specialists who understand when and if new USDOT numbers, interstate authority, process agents, insurance, vehicle registration, state operating authorities, fuel tax, state mileage distance taxes will be needed?
Before the ink is dry, any flexible considerations may be gone. Whatever the "deal" was will determine how each registration and filing needs to be handled.
The FMCSA has a very short answer to the question, "Are USDOT numbers transferable?" The answer? "No, USDOT numbers are not transferable." The guidance itself does not go into the why, but it is because the USDOT numbers are unique identifier to track the safey history of a specific carrier. Transferring a USDOT number would have the effect of transferring the entire safety history of one entity to another completely separate entity.
This means that if the merger or acquisition creates a new legal entity, a new USDOT number will be required as well. It also means that the new entity will be subject to the new entrant compliance process.
Carriers are prohibited from operating without an active USDOT number. Getting one takes time. In some cases, a lot of time – particularly if for-hire authority is required. Along with the necessary filings, proof of insurance and process agent designations need to be in place.
In addition, it takes time to repaint vehicles indicating the responsible carrier's name and USDOT number, transfer registrations, obtain state specific registrations, ensure the drivers are qualified, update insurance, and create ELD accounts to name a few.
It may be a good idea to transition drivers and equipment over a period of weeks or months to put some flexibility into the timeline. Highly trained and motivated DOT authority associates can expedite the process.
So long as there is no break in employment – meaning that drivers do not need to apply for a role at the new company, driver qualification files would not need to be built from scratch. The file from the previous DOT number can be accepted.
A note should be put in the file designating the date of the acquisition or merger to indicate why the files have a different motor carrier identified.
Be care though, the file is brought in warts and all. Any deficiencies in the existing file will also be transferred to the new DOT number. At the very least, the transferred files should be audited by a trained compliance specialist.
The J. J. Keller®Trucking Authority Service can handle the operating authority for your merger or acquisition quickly and easily. Our team of experienced Compliance Specialists can:
We've been working with trucking companies for over 65 years and are ready to help you.