Happy Presidents day! We thought we would take a couple minutes today and look back on what US presidents have done for the trucking industry.
In the late 1930s, the Interstate Commerce Commission, created under president Grover Cleveland, and the American Trucking Association partnered in an attempt to regulate what had previously been a chaotic and unstable industry. The setting of trucking rates, which had been a matter between the individual trucker and the customer, gave way to the establishment of rate bureaus, which are owned and supported by all participating carriers.
In 1962 President John Kennedy became the first president to send a transportation message to Congress demanding a strict reduction IN regulations of surface freight transportation. In November 1975 President Gerald Ford called for legislation to reduce trucking regulation as well. He followed that by appointing to the ICC several commissioners who favored competition in the truckload transportation industry. By the end of 1976, these commissioners were speaking out for a more competitive policy at the ICC, a position rarely articulated in the previous eight decades of transportation regulation.
President Jimmy Carter followed Ford’s lead by appointing strong deregulatory advocates and supporting legislation to reduce motor carrier regulations. After a series of ICC rulings that reduced federal oversight of trucking, and after the deregulation of the airline industry, Congress, spurred by the Carter administration, enacted the Motor Carrier Act of 1980. This act limited the ICC’s authority over trucking.
Both the Teamsters Union and the American Trucking Associations strongly opposed deregulation and successfully headed off efforts to eliminate all economic controls. Supporting deregulation was a coalition of shippers, consumer advocates including Ralph Nader, and liberals such as Senator Edward Kennedy. Probably the most significant factor in forcing Congress to act was that the ICC commissioners appointed by Ford and Carter were bent on deregulating the industry anyway. Either Congress had to act or the ICC would. Congress acted in order to codify some of the commission changes and to limit others.
The Motor Carrier Act (MCA) of 1980 only partially decontrolled trucking. But together with a liberal ICC, it substantially freed the industry. The MCA made it significantly easier for a trucker to secure a certificate of public convenience and necessity. The MCA also required the commission to eliminate most restrictions on commodities that could be carried, on the routes that motor carriers could use, and on the geographical region they could serve. The law authorized truckers to price freely within a zone of reasonableness, meaning that truckers could increase or decrease rates from current levels by 15 percent without challenge, and encouraged them to make independent rate filings with even larger price changes. De regulation was said to bring on better services and rates to shippers as truckers started restructuring routes, reducing empty return hauls, and provided simplified rate structures. The MCA act also led to a boost in the number of licensed motor carriers. By 1990 the total number of licensed carriers exceeded forty thousand, considerably more than double the number authorized in 1980.
Trucking deregulation is far from finished According to one study, abolishing all remaining federal controls would save shippers about $28 billion per year. A Department of Transportation study done by researchers at the University of Pennsylvania’s Wharton School estimated that abolishing state regulation would save another $5 billion to $12 billion.