Electronic credentialing allowed trucks to be placed into service an average of 3.5 days sooner than paper-based systems.

Electronic (web-based) credentialing expediated the registration and permitting process for trucks.

Date Posted

Final Report: Economic Analysis and Business Case for Motor Carrier Industry Support of CVISN

Summary Information

A survey of 38 interstate motor carriers and service bureaus that work with interstate carriers found that companies that participated in electronic credentialing and electronic screening realized significant financial benefits. Electronic credentialing expedited the credentialing process for new trucks and increased efficiency because the electronic exchange of information over the Internet is quicker and more accurate than paper-based credentialing systems, and it enables one-stop licensing and permitting (e.g., for the International Registration Plan (IRP), International Fuel Tax Agreement (IFTA), and permits for over-size/over-weight limits). The net effect is a reduction in both labor and time needed to obtain licences and permits, allowing trucks to be placed in service more quickly and thereby reducing the financial impact of withholding trucks from service. Electronic screening decreased delays and increased driver satisfaction.
CVISN Business Case Analysis of Electronic Credentialing

The benefits of electronic credentialing reported below are based on the data provided by 38 motor carriers and service bureaus contacted by telephone. The companies varied in size, conducted interstate commerce and were enrolled in electronic (web-based) credentialing. The companies provided data on their startup and recurring costs associated with using web-based credentialing (such as computers). Estimates of the financial benefits were based on the time and labor costs required to apply for and receive credentials, and the financial gain of placing trucks in service more quickly. Payback of costs was less than one month.

The return on investment ratio for electronic credentialing at 2,971:1. Savings per company were estimated at $3.6 million over a 10-year period (estimated), with an average annual net benefit of $360,500.

  • The most significant benefit of electronic credentialing is the “time value of increased fleet utilization,” i.e., placing trucks into service with less delay.
    • Using electronic credentialing allowed trucks to be placed into service an average of 3.5 days sooner obtaining credentialing with paper-based systems.
    • The annual cost savings from the reduction in finance charges that accrue on vehicles as they await approval of licenses and permits per carrier (of those sampled in the survey) was $413,065.
  • Labor savings per transaction were $4.13 (based on a reduction of 10-12 minutes per transaction).
  • Savings from reduced materials and postage were $1 per transaction.
These results are also found in the associated summary report, Final Summary Report: CVISN Business Case, October 2007.