ICC Needs To Eliminate Improper Leasing Practices by Certificated Motor Carriers

CED-81-24: Published: Dec 31, 1980. Publicly Released: Dec 31, 1980.

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GAO was requested to determine: (1) the extent of leasing in the trucking industry; (2) the differences, if any, in services rendered to owner-operators by motor carriers certified by the Interstate Commerce Commission (ICC) and those rendered by agricultural brokers; and (3) the reasonableness of the fees charged for those services. GAO analyzed financial data collected by ICC from certificated carriers to determine whether there were significant profitability differences that could be traced to the use of owner-operators. GAO also gathered data from truck brokers and certificated carriers to determine whether there were significant differences in the services provided to owner-operators and the costs of providing those services.

GAO found that the data collected by ICC were not detailed enough to separate certificated carriers' leasing operations from their other activities, and neither truck brokers nor certificated carriers could provide the cost information needed. GAO confirmed that owner-operators received a higher percentage of a shipment's total gross revenue from truck brokers than they received from certificated carriers. Certificated carriers claimed they kept a greater percentage of the revenue because they provided the owner-operator with more services and incurred more costs due to regulation. Without reliable cost data, GAO could not determine whether these additional services and costs justified all of the difference between the fees charged by certificated carriers and truck brokers.

Recommendation for Executive Action

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Chairman of ICC should monitor leasing practices by collecting and analyzing the industry data necessary to determine whether improper leasing practices are continuing under the Motor Carrier Act of 1980.

    Agency Affected: Interstate Commerce Commission


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