ICC Cannot Allow Independent Truckers To Lease to Private Carriers Without a Change in Legislation

CED-79-99: Published: Jun 15, 1979. Publicly Released: Jun 18, 1979.

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A request was made for a study of the Interstate Commerce Commission's (ICC) single-source leasing rule to give advice on possible administrative or legislative remedies which would allow independent truckers to lease to private fleets without giving up their independent status. The Interstate Commerce Act requires that all carriers engaged in transportation for compensation or hire obtain operating authority from ICC. Operating rights are based upon both the routes the trucking company plans to serve and the commodities it plans to carry. The carriage of certain commodities, such as many nonprocessed agricultural goods, is exempt by statute from regulation. In addition, the private carriage of goods by an industry not engaged in the transportation business is exempt from regulation. The independent owner-operators, those not holding ICC operating authority, avoid regulation by either leasing their equipment and services to an ICC-regulated carrier, or by hauling statutorily exempt commodities. They face serious financial problems due to their dependence on leasing a regulated carrier's operating rights. The ICC single-source leasing rule, which forbids regulated carriers from leasing equipment with drivers to private carriers, has been identified as the impediment to independent operators' hauling for private fleets. Allowing the truckers to be for hire carriers without requiring them to obtain operating authority from ICC is clearly inconsistent with the act as it now reads. In order to allow private fleets to use independent operators and have them maintain their independent status, the act would have to be amended; a regulatory change cannot solve the problem.

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