The effects of deregulation in the motor carrier industry

• Author: Donald L. Flexner
• DOI: 10.1177/0003603X8302800107
• Published date: 01 March 1983
• Date: 01 March 1983
• Subject Matter: Article

The Antitrust Bulletin/Spring

1983

The effects

of

deregulation

in the motor carrier industry

BY DONALD L. FLEXNER*

Introduction

185

When Congress passed the Motor Carrier Act

of

1980, it reduced

but did not eliminate regulation

of

the trucking industry. Whether

such action is called deregulation or regulatory reform, its pur-

pose was to inject the industry with heavy doses

of

competition,

and to clear away regulatory obstacles to greater efficiency. Such

action did not come easily; it took 18 years

of

public debate and

the onslaught

of

double-digit inflation to generate the political

consensus necessary for change. Moreover, even in the aftermath

of

reform, the debate

continues-first,

because the vestiges

of

economic regulation remain in place, and second, because the Act

itself calls for continued study

of

the effects

of

deregulation.

The discussion now focuses on two major questions. First,

will existing and additional deregulation work? Will deregulation

produce greater competition in rates and service for the benefit

of

Partner in the law firm

of

Crowell &Moring and former Deputy

Assistant Attorney General, Antitrust Division, United States Depart-

ment

of

Justice.

AUTHOR'S NOTE: I would like to acknowledge the assistance

of

Barbara

H. Bares, an associate in the law firm

of

Crowell &Moring, in the

preparation

of

this article.

©1983by Federal Legal Publications, Inc.

186 The antitrust bulletin

shippers without damaging the stability and economic health

of

the industry? Second, will and should statutory immunity for

collective ratemaking, which was substantially cut back by the

Act, be completely withdrawn in the future, leaving rate bureaus

and their members without any antitrust protection?

How these issues are resolved will not be entirely a function

of

the facts, since politics and the facts frequently do

not

mix.

Moreover, obtaining and properly interpreting the relevant facts

are extremely difficult for two reasons. First, data are generated

for the most

part

to comply with regulatory reporting require-

ments, not to test conflicting theories concerning the merits

of

regulation or competition. Second,

data

may be seriously misin-

terpreted when, for example, the effects

of

general economic

conditions are attributed to regulatory changes. Thus, it would be

misleading to argue that deregulation is the cause

of

trucking

company failures unless the current economic recession were

eliminated as an independent and more important causative

factor. IBecause factual and analytical limitations never stop

debate or forestall the political process, however, it is important

to understand the legislative changes that have already occurred

and to evaluate their economic consequences.

I.

Trucking deregulation

A.

The old law

Until 1980, trucking was one

of

the most heavily regulated

industries in the economy. The federal regulatory system was the

I

It

is interesting to note

that

proponents of

motor

carrier regula-

tion in 1935 pointed to the widespread failures

of

trucking companies as

evidence

of

the competitively destructive nature

of

the trucking industry.

Yet no effort was made to compare the failure rates

of

trucking

companies with other businesses equally affected by

the

Great Depres-

sion. See generally

SENATE

COMM.

ON

THE

JUDICIARY,

96TH

CONG.,

2d

SESS.,

FEDERAL

CONSTRAINTS

ON

COMPETITION

IN

THE

TRUCKING

INDUSTRY:

ANTITRUST

IMMUNITY

AND

ECONOMIC

LEGISLATION

(Comm.

Print

1980)

[hereinafter cited as

SENATE

COMM.

REP.].