President Grover Cleveland created the Interstate Commerce Commission (ICC) in 1887 to prohibit rate discrimination for customers of the railroad. In 1906 the ICC was authorized to set maximum railroad rates and to oversee bridges, terminals, ferries and oil pipelines. In 1935, the ICC’s authority extended to regulate motor carriers, including trucking and bus lines.
As the ICC became more powerful, its regulations encompassed all interstate transportation until it was abolished by Congress in 1995. At that time, it was replaced by the US Surface Transportation Board, which held regulatory oversight for bus and trucks, pipelines, water carriers and railroads.
Today, the Surface Transportation Board primary attends to the rail industry, while the Federal Motor Carrier Safety Administration, established in 2000, oversees interstate trucks and busses.
If these agencies indicate a highly regulated industry, you are correct, but you are also wrong. In fact, the Motor Carrier Act of 1980, deregulated the trucking industry. Yes, it was initiated by President Nixon and carried out by President Carter, who claimed, “It will remove 45 years of excessive and inflationary Government restrictions and red-tape.” He went on, “And the trucking industry itself will benefit from greater flexibility and new opportunities for innovation.”
I actually remember those days. I earned my diploma in Traffic and Transportation Management in 1980, just after the “deregulation” occurred. I had learned how to read tariffs, audit freight bills, apply for authority and even testified in an ICC hearing for authority. Now, much of that changed.
As the Traffic Manager for a steel fabricating plant, I shipped material handling products that were heavy, but difficult to damage. Inbound raw steel was unpainted and arrived in coils, rods, tubes or flats. We primary needed flatbeds, but enclosed trailers would work for some of the pallets and bins. In those days, the longest trailer we could get was 40 feet long.
Prior to 1980, a carrier’s authority was one of its most valuable assets, as the ICC controlled where a company could operate and what they could charge as common carriers. It was the contract carriers who were allowed to negotiate rates and to work with specific customers.
At the time, it didn’t matter which common carrier you used because they all charged the same rate. Many of them transferred the cargo to another carrier if they didn’t have authority in the destination area.
States were allowed to set their own maximum weight laws and bridge limitations. As a Wisconsin based carrier, anything going east could not exceed a maximum of 73,280# because that was the limit in Illinois. If we were heading west, we could max out our loads to 80,000# gross. In 1974 the Federal-Aid Highway Amendment established a federal maximum and Illinois allowed 80,000#.
Deregulation blurred that distinction, as common carriers no longer were held to published tariffs and contract carriers weren’t the only choices for specialized equipment. The process to deregulate the trucking industry was to avoid the inefficiencies of government regulation to promote a more competitive environment.
So, if the industry was deregulated, why doesn’t it feel that way? Have things changed much since 1980?
If you talk to some of the “old timers” you’ll get mixed responses. Freight rates haven’t kept up with inflation, but technology has pushed us all to new opportunities. CB radios are out, but in cab satellite communication is common.
One thing that hasn’t changed is the parking situation. Going back in time, drivers complained about the lack of safe, secure spaces to sleep. An industry magazine from 1991 has interviews with drivers, asking them if they can find adequate parking. Not surprisingly, every response was a resounding, “NO.” The article could be in today’s publications, as things haven’t changed in almost thirty years.
Hours of service are still a concern, as they were established in 1937 when roads, equipment and even drivers were less diverse. Changes were made in 1962 and again in 2003. Today, the hours of service are being scrutinized based on fatigue studies to better accommodate a driver’s physical and sleep needs.
We don’t have the wild cat operators of the forties who drove with abandon, as we have electronic logging devices to limit those violations, along with weigh stations and law enforcement to oversee the industry.
The one thing that has never changed is the need for drivers. Turnover is high and the number of drivers leaving the industry is unacceptable, yet it doesn’t seem to improve. We still haven’t figured out the reason for the churning.
The trucking industry has been around for over a hundred years, but you can be assured, that the more things change, the more they stay the same.