Issues in Regulating Interstate Motor Carriers

CED-78-106: Published: Jun 20, 1978. Publicly Released: Jun 20, 1978.

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The Interstate Commerce Commission's (ICC) regulation of motor carriers, especially trucks, has been a subject of much controversy. Issues of concern in considering changes to the regulatory system include the costs and benefits, the effect on competition, the impact on service and rates, the effect on energy efficiency, and the justification for certain exemptions.

Federal regulation of motor carriers began in 1935 because of the states' inability to regulate interstate commerce, the financial difficulty of railroads, competition between motor carriers, and the depression. Conditions since that time have changed; the economy is stronger, and the trucking industry has grown in number of companies, their size, and distances they cover. Opponents of regulation argue that regulation imposes increased costs from inefficiencies and higher rates, entry restrictions interfere with competition, and the rate bureaus' methods of setting rates result in higher freight rates and reduced services. Proponents argue that: in spite of some costs, regulation results in net social benefits; entry control is needed to prevent destructive competition and ensure adequate service; and rate bureaus allow truckers to develop better cost data on which to base rates. Exemptions from ICC regulation which have posed special problems are the agricultural exemption and the commercial zone exemption.

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