Motor Carrier Act of 1980

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The Motor Carrier Regulatory Reform and Modernization Act, more commonly known as the Motor Carrier Act of 1980 (MCA) is a United States federal law which deregulated the trucking industry.^[1]

Background

Motor carrier deregulation was a part of a sweeping reduction in price controls, entry controls, and collective vendor price setting in United States transportation, begun in 1970-71 with initiatives in the Richard Nixon Administration, carried out through the Gerald Ford and Jimmy Carter Administrations, and continued into the 1980s, collectively seen as a part of deregulation in the United States.

Since the passage of the Interstate Commerce Act of 1887, the federal government had regulated various transportation modes, starting with the railroad industry, and later the trucking and airline industries. Increasing public interest in deregulation led to a series of federal laws beginning in 1976 with the Railroad Revitalization and Regulatory Reform Act. The deregulation of the trucking industry began with the Motor Carrier Act of 1980, which was signed into law by President Carter on July 1, 1980.

Studies of the legislative process leading up to passage of the MCA indicate that the Act resulted from a concert of action by the Carter Administration, Congressional leaders, including Senator Ted Kennedy, an extensive coalition of "civil society" organizations which was a follow-on to coalitions created for rail and air transport regulatory reforms, and Interstate Commerce Commissioners appointed by Presidents Nixon and Carter who supported the pro-competition objectives of the legislative initiatives of 1971 to 1980 (notably A. Daniel O'Neal and Darius Gaskins).^{[citation needed]}

The MCA was envisioned to be a sweeping de-regulation of the trucking industry. When President Carter signed the bill, he proclaimed:

This is historic legislation. It will remove 45 years of excessive and inflationary Government restrictions and redtape. It will have a powerful anti-inflationary effect, reducing consumer costs by as much as $8 billion each year. And by ending wasteful practices, it will conserve annually hundreds of millions of gallons of precious fuel. All the citizens of our Nation will benefit from this legislation. Consumers will benefit, because almost every product we purchase has been shipped by truck, and outmoded regulations have inflated the prices that each one of us must pay. The shippers who use trucking will benefit as new service and price options appear. Labor will benefit from increased job opportunities. And the trucking industry itself will benefit from greater flexibility and new opportunities for innovation.^{[citation needed]}

Overview of the law

The Act prohibited rate bureaus from interfering with any carrier's rights to publish its own rates, and, as implemented, removed most rate making from the rate bureaus, eliminated most restrictions on commodities that could be carried, and deregulated the routes that motor carriers could use and the geographic regions they could serve. The law authorized truckers to price freely within a "zone of reasonableness," meaning that truckers could increase or decrease rates from current levels by 15 percent without challenge, and encouraged them to make independent rate filings with even larger price changes.

A particularly interesting aspect of this legislation is that it was implemented more aggressively (in a pro-competitive direction) than it was written. Promoting independent pricing and open entry were critical to achieving a level of competition made possible by the characteristics of the trucking industry. Under Darius Gaskins, the Chair of the Interstate Commerce Commission in the period immediately following passage of this Act, entry controls were dramatically reduced. In addition, the Commission interpreted the Act to allow contract rate making without regulatory review, and opened the field for transport brokers who could manage better match ups between the demand for transport services and the availability of carriers.

Before this law was passed, the industry had simply passed along higher wages and operating costs to shippers. The law had far-reaching consequences, causing price competition and lower profit margins.^{[citation needed]}

A result of the law was that the number of new firms has increased dramatically, especially low-cost, non-union carriers. By 1990 the number of licensed carriers exceeded forty thousand, more than double the number in 1980. Combined with the Staggers Act (1980), intermodal freight transport surged, expanding 70 percent between 1981 and 1986.^{[citation needed]}

Deregulation—freeing up the trucking market to permit much more flexible pricing and service arrangements, disciplined by competition—allowed manufacturers to reduce inventories, move their products more quickly, and be more responsive to customers. Consumers indirectly benefited from the more efficient, lower-cost transport of goods. (See From Economic Deregulation to Safety Regulation Department of Transportation comprehensive study on deregulation effects.)

See also

• Motor Carrier Act of 1935

References

Further reading

v t e Trucking industry in the United States Regulated by the Federal Motor Carrier Safety Administration Regulations Commercial driver's license Hours of service Federal Bridge Gross Weight Formula Electronic on-board recorder Motor carrier safety rating Motor Carrier Act of 1980 International Registration Plan National Network Manufacturers Truck manufacturers Autocar Brockway Freightliner Ford Motor Company International Kenworth Mack Peterbilt Sterling Volvo Western Star White General Motors Truck & Coach Division Engine manufacturers Caterpillar Cummins Detroit Diesel Mack MaxxForce Mercedes-Benz PACCAR Volvo Trailer manufacturers Fruehauf Corporation Great Dane Limited Hyundai Translead Lufkin Trailers Trail King Industries Utility Trailer Manufacturing Company Wabash National Monon Trailers Motor carriers Truckload carriers Celadon Covenant England J.B. Hunt PAM Transport Schneider Swift USA Truck Werner Knight FFE Transportation Less than Truckload (LTL) ABF Con-way Pitt Ohio Express FedEx Freight UPS Freight YRCW Third Party Logistic Providers Access America Transport CaseStack C. H. Robinson Worldwide Freightquote.com TheFreightRateCo.com Parcel carriers DHL Express FedEx OnTrac UPS United States Postal Service Moving companies Allied Atlas Bekins Gentle Giant Moving Company Graebel Global Mayflower North American PODS United Shleppers Moving & Storage Truck stops Bosselman Dixie Travel Plaza Iowa 80 Love's Pilot Flying J Road Ranger Roady's T/A & Petro Town Pump People Reginald Denny Jimmy Hoffa Fred Smith John B. Hunt Kelly Reno Iyman Faris Larry Walters Keith Jesperson Organizations Teamsters Union Owner-Operator Independent Drivers Association Dial-a-truck American Trucking Associations FJ Managenent SmartWay Transport Partnership Glossary Glossary of trucking industry terms in the United States Popular culture Film Black Dog Convoy Duel F.I.S.T. The Gang's All Here Joy Ride Maximum Overdrive Over The Top Smokey and the Bandit (series) They Drive by Night White Line Fever Trucker Television B.J. and the Bear Ice Road Truckers Movin' On Trick My Truck American Loggers American Trucker Music "Convoy" "Papa Loved Mama" "Six Days on the Road" "Teddy Bear" "Phantom 309" "Giddyup Go" "Drive-By Truckers" "The White Knight" "East Bound and Down" "Roll On (Eighteen Wheeler)" "Eighteen Wheels and a Dozen Roses" "Girl on the Billboard" Radio Road Dog Trucking (Dave Nemo) America's Trucking Network Red Eye (Bill Mack Dale Sommers) Other The Rolling Memorial Citizens' band radio