us-ftc-advocacy-filings-0b4ea10f0ef0a17c0b37d2451db77721•FTC Staff Comment to the Hon. Frank Sawyer Concerning Ohio H.B. 658 to Repeal the Regulation of Contract Carrier Motor Freight Rates
FTC Staff Comment to the Hon. Frank Sawyer Concerning Ohio H.B. 658 to Repeal the Regulation of Contract Carrier Motor Freight Rates
us-ftc-advocacy-filings-0b4ea10f0ef0a17c0b37d2451db77721FTC Staff Comment to the Hon. Frank Sawyer Concerning Ohio H.B. 658 to Repeal the Regulation of Contract Carrier Motor Freight RatesAdvocacy Filing
\ '\ Sw.. 500 'I'b$ Mall IhllWaJ 115 SL Clair .......~ Cln.l~ Dale> ~1l~W7 (216) '22"'210 'I'dec0p'-r: '22·'7l.l9 JOHN tot MENDENH"'LL AetlDl Ita,loa.! Direc:'lOf FEDERAL TRADE COMMISSION CLEVm. ... NP IlWION ...t Of'PlCE COMMISSION AUTHORIZED February 17) 1988 The Honorable Frank Sa wver Ohio House of Representatives State Capitol Columbus, Ohio 43215 Dear Representative Sawyer: The stnff of the· Federal Trade Commission1 is pleased to respond to your request for comments on Ohio House Bill 658. This bill, if enacted) would repeal the Public Utilities Commission's authority to set contract carrier motor freight rates. It also would facilitate new entry into the industry while maintaining a standard that all entrants must be "fit, willing and able" to serve the shipping public. Under House Bill 658, highway contract carriers would be allowea to charge any rate they choose, but would be required to maintain safe and solvent operations. This bill is a significant step toward bringing to consumers the bc?~fits of price competition in Ohio's contract motor freight industry. In addItIOn, by requiring that applicants for operating authority demonstrate familiarity with the Utihties Commission's safety rules, HB 658 directly addresses the issue of safety and serves the state)s interest in protecting the health and welfa.re of its citizens. 1 These comments represent the views of the Cleveland Regional Office and the Bureaus of Competition) Consumer Protection, and Economics of the Federal Trade Commission, and do not necessarily represent the views of the Commission itself or any individual Commissioner. The Commission has, however, voted to authorize the staff to submit these comments .to you.
Th~ Honorabie Frank. ~wytr
OUT interest in thi~ lqn~l~tinn pi~c~ fraIT. :hc F"tocr .. ] TTbdt Commlb:,lcr;':.,
m<lT.d<ltt' to ?TC!\eT\f cumpt:llllOTI tnc: rlolec~ COTl!\umcn horrJ ot"ceptlvt tnC
un~(jlf bU$mcs~ prbctH.:e,: JUTlTlf rtCtn~ :-,eG:-~.• !It: C()r;iml.s~lor,\ sa-if liil£'
nuol{'d ~b~ o~Tq-,uibtICJn (If trucklL!: tTlC hl::~, i:dVOCblt'.G :nc:-::t1l-cG lC:,lll:lIJC:: I,IT.
market force~ at both the fedeThP bIld 6tate le\'el~.~ Our hctivitie~ in thi~ arCl::
and in matter6 of competition policy generally have provided us with
substantial experience in analyzing the potential competitive consequences of
truckinc deregulation. While we have not done a specific empirical study on
trucking deregulation in Ohio, we are familiar with the literature examining the
experience nationally and in other states. The weight of that literature favors
what we believe will be the impact of House Bill 658.
! ,
I. ARGUMENTS ADVANCED I?' SUPPORT OF CONTI~VED REGULATION.
Trucking regulation originally was intended to help protect the regula~ed
railroads from competition from the then-unregulated and expanding trucklng
industry. It also was designed, in part, to support the trucking in~ustry by
restrictIng compe.titioD dUrIng the· depression of the 193O's.s We belleve that
neither r::J.tionafe has any valIdity now.
2 See 15 V.S.c. S 41 tl seq.
3 See Comments of the Federa! Trade Commission on Pricing Practice~ of
Motor Common Carriers of Property Since the Motor Carrier Act of 1980, Ex
Parte No. Mc-l66, Before the Interstate Commerce Commission (Jan. 1983);
Supplementary Comments of the Bureaus of Competition. Consumer Protection
and Economics, Federal Trade Commission on the Exemp~ior. of Motor Cont:ac:
Carriers from Tariff Filing Requirements, Ex Parte No. Mc-165, Before the
Interstate Commerce Commission (1983); D. Breen, Bureau of Economics of the
Federal Trade Commission, Regulatof" Reform and the TrucbD~ Indu:'!!;:: An
Evaluation of the Motor Carrier her of 1980, Submined to Motor ....... arrier
Rat~making Sway Commission (Moren 1982).
4 See Comments of the Federal Trade Commission S .. af[ to California Sen.
Rebecca Morgan, on legislation to repeal the Public Utilities Commission's
authori~' to set contract car.rier motor frei~ht rati?s (pee. 31, ~98i~ C<:>rn mer: ts
of the redcraI T:-ade Commls~:on Staff to tne Legls1atlve Auda CounCil of tne
State of South Carolina on Possible Restrictive or AnticoffiPetitive Practices ir:
South Carolina's Public Service Commission S .. atutes (Sept. '29, 19S7~ Statement
of the Staff of the Federal Trade Commission on Sconomic DeregulatIon 0:
Trucking to House and Senate T:-ar.spor:2.:ion Committees, V\:?shington Stf.te
Lefis~ature (March 7, 1985).
5 !'ielson, 'r'b~ Ch(u;~jn~ ;:: ::OTl01T1;C C::::;;~ fo; Surf3c~ T~8nSD87't Re1:V 12 tjo~., In
Perspe.ctive£ on Federa1 i'ransponatior. Poiicy (J2mes C Miller Ill, ed. 19:5>
~: 0~:· ~·':~'f· j~'~,~'~ ~.:')~.~' \,.I ~ •.: ~~:~'T"'~~ ::-:"~.::~ .;:.:' ~ T_~~t':: r"'1.)!.:1:- C'~·~r:~·~f
;~ru~".~IUt L~..... ~;:~ r.:-·\·;.~,:'~ ~:.:~'~ ::1,.1,:'- ~::F,-r:;~~;~~·· ~:~\~L:,~.r r~:{·~'·1()7\ ~);l~··:·f
L:'JresthlllnF, oe~tructlV(; C()mj>~'l'lOr:. <lnQ P.JhlIlU;'lfllrlf-. 5 .. it:'~' A~ CJ~"u..,~C;G t>l!C, .....
however, a Dumber of emplricaJ studle~ have concluded that none of Ihe~t
rationales supports the contention that continued regulation of contract motor
carriers is eithcr necessary or desir&blt.'
A. Predatory Pracing.
I ,
A primary argument advanced in support of continued regulation is the
prevention of predatOry pricing. The frinclp<il thrust of this argument is that
larger. better financed companies wil attempt to drive out compe.titors by
selling trucking services below cost. The surviving firms will then raise their
prices above the compctitive level, eventually recouping their losses and
Increasing their profits.
One condition necessarv for successful predator\' pricing is high entry
barriers. High entry barriers prevent 2 return of competitors when the
predatory firm raises prices <lbove the competitive, level to recoup its losses.
We believe that this condition does not exist in the trucking indust;"y today.8
Currently, there are no significant regulatory barriers to entry_ In addition,
because truck~ are highly mobile and can be transf.erred quickly t~ n~w
markets, phySIcal entry barriers are low. If the predator tned to raIse lIS
prices to noncompetitive levcis, other fir!!:: should enter or re-enter the
market, taking business away from the prcd210r and lorcing prices back to
competitive levels. Because predation is unlikely to be profitable, carriers are
not 1ikely to ettempt i~.
6 Contract motor carriers are trucking firms that operate under contract to
specific shippers. Contrac:s can be shon term (single trip up to 30 days) or
long term (30 days to 12 months). Ea:h contract is nel!otiated, after which the
rates are published. -
': 7hese 2.r1!L:rrler:~!: neve b~t:-. discussed ~rlc d:s:r::ssec i~ c: number 0: sLucles.
Sa generalt"y ~'einsteir, &. G:OS&. T;-?T'\fDQ;-:G~i:); e;.,C =,~orJo""":i;- D~v>.10r"'er.::
T.r ~!" fo!" ~>for""" ~ ;~~c.f:jr(" -." uj'atio, iT. -;- )·c.5 Center fa: £nte;-p::-lslDg,
Southern Methodist Un;versi:y (Feb. 19R7): :J. B:-eeL, supra note 3.
f 2. C. h~il}er :II, ;:..;0nGr:1i2 Fe-[uJ<:tior. OF T-\Jcb!1~. !!"; Report of the
=.cono:r.i: Adviso:-\' ?z.:1el :c :ht >~2tjOr:2J Ccr;;:T,;S~iaD fa;- :~e Review of f~!1:i·
-:-;-~st Laws and Procedurcs (?'io\'. 9, 1978).
- - . . -;--
1'_ • _ '
t"''''''''''''r''j\ ,p.-,... "';, .... ,..."t.: t .. f- '\'r"~f ,-,,-( ·'t -,. F-"o. 't ~r~t"(l.'.6o! ,-C)rrr.-"r ,.. r, ... ~... I. " ., h ",.) ....... , .• '•• l... . .... t ~,., I. ,I., • l;. '" .. l t ,,, " .• L" ~ I ..... , ..
.-n ..... "'!'·"'J'j .. , \1,-"('" '-<"l~' r··,. .... ··l·' .. r (,'l('\ r'nT"I"!"Cr ·r~· .. '_ •••• ~. ....... .~ ... , 1 " • I,,'. . • ... I- •. .... . . 4:. •• j. 1 ~.' •. , .. I. J ,,-. ...' ., ..' J I C \ " •• , \
: ~~. :. (. : " :":1 ~ r~! (..l:' .: '-,! ~ 1 ~ ~ j 1. ::-!:-, .. I ;..J ~ ; !, F . ..... r' ~ t' ;. ~ J (J r. l.l U 1: ; ~ ;. C " ~ t J l t:' r 'v ~ C ~ l
.) .. ~ "-uDor-c ,~ .. , ,.'1-[ .,,.-··fC-" 'h", .. ~ '. t".·,·'lr.\ •. ; . ""7". I'f'-, 1(' "tt t"pI"'rr" , ...... ::-.'": ",I~ v, •. " f., . ....... ,~t- ... ... l ••. ~ •• ,',\-,or"hllS- \ ,=,1.1 ... , ,.I ...h .. ",IlL
Court stated that "precatory PrJcinf ~chcmes are rareiy tried, and even mOTe
rarely successful."ll In any event, firms that attempt to engage in predatory
pricing also would be subject to public cnd priv&te antItrust enforcement
actlons,
Proponents of regUlation have argued that settinfI up an extensive terminal
network, as required In the less-than-truckload (L TL) segment of the industry,
is a barrier to entry that raises the attractiveness of predation. An ITC staff
study of the impact of the Federal Motor Carrier Act of 1980, however".
indicates that competition along routes increased with deregulation as scores of'"
efficient L TL competitors expanded route networks. Examining 248 city-pairs,
the study found that "the number of competitors per route increased between
1979 and 1981 for 179 of the 248 major routes" despite the absence of
significant de novo entry into L TL trucking. 12
9 United States General Accounting Office, T;uc};;jn~ Rej;:ulsrion: Price
Carope-tiljn!! 2nd l\1ad:;ft Stru::ture if: the T;uckin~ Inciust!"\', 8-10 (Feb, 19&7).
The positions of the ICC, MCRSC, ",no DOl are dis::ussed in ~he GAO :-eport.
10 105 S. Ct. 1348 (l986),
11 Ie. at 1357·58, citing R. Bark, The Antitrust Paradox, 149-56 (l97E~
Areeda & Turner, Pred2~o;\' P!'icin~ 2nd Re.)2ted Pr?ctice~ UT1der S:ctiOD 2 of
tne SherID2D Ac:, 88 Harv. L. Re\'. 697, 699 (1975): .easterbrook, predatorv
<"'~',r~('>',,,,c: I)~;; rn\lT"\r"''''C::~-~·'''O"J·''c 4>: r- Ch; -:- -;; .. " Jh'=.. '),;.~ ( 10 8"" Koller ,D" b) (..'b. X' k· ..... '>" ~. »,' ') 'kt>- •• >Y. -' "-'. • •. - ............. _v ...... _V.....J '.- .... --r .. ~ ~
''\i v ''''' ",(" ~T"pn"""'!'"" P .... l,..~!i~ _ .t. ~ :::""'!"".~~-i,....,:~ ~!"I";\' :. A n·i""!""'l'S· r l: =~Q~- f\.e,\' e_ b'·'. ,>-,_(.)"J 'x't. .. _ . Xx b')lri'+;. .. .. l ..... ~ .. "- ... Ja,..I. ...-- ...... •
10~ (1C"'~\· \1.~'~"'e I;.~P·;-'C-\' -::'~l~oC rt.;~~'nr· .~.c. C.-and-~d (j:1 ('1<..·7·) r:2SC 1 J.
t-i-E;~n.· j{(19sS~ Y~~'~c;C~, -P:-;.d8~');-~~"F~j~:f'~io~~;\:i;it:¢, :3 J. L. '& ~.80r.~ 289,
292-94 (1980).
\Vo:-bnr
~'- - :: _:-; .;. ,:;.. - -
- --
J'10pOllnjl~ o! lIUCk.1Ilf It"fUl<.JilUr. <:'I:>U ~!fut ~t;(:; CH.::quJ"tJ(IL .... di 1(.<1(. t:. "destructlve competition." Destructive competition mBy occur in industries characterized by declinin~ demand, sunk costs, and a high ratio of fixed to total. costs. These conditions are likely to create excess capacity end co~slderable pressure to cut prices. If price competition occurs, however. pnces may persist below the total cost of providing services because the sunk nature of costs makes exit difficult Firms facing chronic losses may, as a result, try to reduce costs by skimping on service, to the· detriment of customers, Conditions conducive for destructive competitIOn are not likely to exist in (. the Ohio trucking industry. Fixed costs comprise only a small percentage of total COSTS, which include such variable cost!; as labor and fuel expenses. Trucks also are highly mobile assets which may readil\' and c<lsilv be transferred from less profit<lble to more profitable markets in response to" fluctuations in demand, or sold or leased to other operators. There.ore, it is unlikely that destructive competition of this sort win occurP C. Snfet~'. Another argument that has bccn advan(:ed ajZainst deregulation is that it will have an adverse eriec: on safety in the trud:lr:.g industry. because c2.rricrs facing stiff competition will neglect maintenance, deia)' replacement of vchicles, and overwork drivers. v,'e. believe that reduced safetv is DOt a necessary conseauence of economic deregulation. In fact, 2. recent· stud\' of truck safety in Ca.lifornia, conducted jointjv by tht CaiiforniG Fubli::: Utilities Commissio:J. ond the C<llifornia Highway Patrol was "unable to prove the hypothesis that CPUC economic regulation of trucking is significantly and positively hnke:: to improved highw~y safety."l< 11 See ..;.. K(.!:r~ :::, • E;~r0mi;: n" Re~1;la:jQ;~, :78 (29~:) .~ vl'r~i:r~ :ne "::~."'o~ ~t~~_.. s, '~I·r')O ....",~ t",.,,_~L-l·n" n' ~,.~. ~'ne ~~OPloml'c ~"·~;hut"'~ ....,~ -r, ;no·"5 .... \' Q_ • .J. _,_, J-';" ... "" e _v_~, ...... J ,I C.""l _.:> v. a ........ ' •. sub.ieet te destructive competition? It would be difficult to find one less qua:ifiec.' l' C<:li~o:-r:~<, P:Jbl)c T.)~iii:ic~. (:oZ":"l:!:issior: &. '::~d::o:--r:ic:. ;-:i~h~'2\' ?z.:rol . .t... E FinrJ Repo:-: or; Trud: Safety, Join: L.q;isl~:ive Repo:-~, :~. (!"o\'.19S7). ~ - - - ___ '_ 7""'-:-"_' . -- --- -'- - . - _.=. • ~ ".J'; . -= :', ~ - - - - --
, ~ .. t ;f"' r ;~',; c. : ,,: j ~ r. u;.. c •~ •. : n. c. ~ : ;~. : t' ; ~ ~. '. .1. ~ <: ':;-; :':" .i j ; . r ~. CI : t' ~ .' { ) L ~.~ ) :. I ~ :
:.j~':\4'.\'~ ,-~,\...~,,,':.'~ :~.::;~: ::.c:. ~:,~~·~·::;!t :" ~.;~, :.;.'c.'., "I~., : ...... > ::·:·· ... ·1;
~()/d~)~~~ ;~;~:~~~.~;' l~ 1I~or·1Sj~~~~):~· ~·~tr: ~~ ~~h6SS~: t~':bi~h,u~a~~~'~:~;: t~'~ ~; .•~~\~~
carriers demonstrate a familiaTlIV with the Utilities Commission's safety rules)
and th&t those carriers provide fInancial stCi.tements showing that they have the
financial cBpahilit~, to mClintoin safe equipment.
II. BENEFITS OF DEREGULATION.
Evidence of the benefits to consumers Clno competltion produced by
trucking deregulation can be gleaned from the experiences of other states.
California. for cX::lmple. expcnmented with partial economic deregulation of
trucking from 1980 to 1986. During that time entry was virtually free, and
rates. though regulated, were flexib1c.1.5 The result was lower rates with no
loss in service. 16
Experiences of o::lcr states also attest to the economic benefits of
intrastate trucking deregulation. A study of trucking in J:'lew Jersey, f~~
example, concluded that deregulation has worked well lD that state"')
According to a study by ·W. Bruce Allen, shippers were satisfied with the
available service. rates were about ten percent lower than they would have been
UDder regulation, and intrastate carriers h~ve prospcrcd. 18
pe:ioc,
V.'c.i ::Uf.
wai:ing
""'3$ no
l:: C2.rrie:-~ were Dermitted to cr.znge :-c.!.es: Ef:e: 2. short
without hc .... ing to' show th~ ~h2~ge \l'<?~ cost-jusri:leG..
pe:iod to match a competito:-'s r~:e.
16 M. Simme:-sou) "Analysis of The Impe:::: of Dere£"ula ~ior: of the General
Freilrhr Trucking Industry," Investit:ation ~c. SLQ:,-04S, C2.lifornic Public
Utilri.ieE Comrnissior.. 20-~: (\uf. 10, ~9~) (b~sed UDO~ st.::-vey b:' Cpr...;C of :39
p n ~ -,.., , :. - . . ~ ,.... ') __ . D _ ,.. 'P-. r ...., (:\ \. \' r " i ~ ; f""! ... 't""\ : r # r .. ", t tL 1 -:- T"" ~ \r,o - S ~ ... , :-- r- " I y...'''' - rf-';"J,~ .... Gl t ... CJt , ... "",,",.~1_ ... $ .,:u\..:, SL..\;:.~ <# '-c..J..1J....,.~.Ic.,.._~ ... '-.l.':. _,l. • ..:'\~ .... ~ ... "- ..\~ ~~c: ..~ c;:._,-~
' .... <::~'T'lltC. Of "n "'S"''''''''r. !'. -"'C·.., S~ I 1.e-'·"'C?mPn~ 0- , ~ '~l",np-c i .~._ _~. !. ~_ «. #' u.- ~~ _ -.; ...,_~ s .. """ ~ •. Jl 1~.!'-#-''''''~.
17 'W. Bruce Allen, S. Lonergan & D. Plane, EX2,min2tiQi' Q: :he- lJnref'ul<~ted
7~\l,..t·i"C' -'::-vDor,'ou"p ; .... ",'pv,' j/·~So,· V, <:; DA.p. 0: T~~nspor~"·l·on iju·"" 1 979).. }'.. •• H .....'. y' x y> 4 > y.. > ..... ._. ..... \.~ .. ... .. _ 4..0... \ #. ...
If. \\!. B:-uce P:..J)Cfl, ;:~2t?7~~: :;efo."~ :h~ 't\T2~1~P4c~ (:o!::mi~~jo;;, f0: :h~ ?~,.~~v.!
r.f L r:;; .. Tr~ls~ T 2\1.'5 £~(. ~r()~.~ct;~:<' fjGrl~Gr: ::. ~~·'77).
. '-,":"- -:--:--
~'- -" -'--= - .. - - ":' .to;::-
. - ---
'--L.. .. _ ._.~
...
. i~ L ....... { i - . ., - ( .
TJ::": :);':·'\.\~~L:~~·.·· -. ~~~~~.;:~ ."'\~::'~,:::~, (.~=·~·.-·\·::'t -.f '~I~ "~I..\.\, ( \':'i'
after dcregulbtlOn 'Db 'rc:r~er;t uf shIppen, (:II, ,,"ciJ ,11, il W;P;l!::L~). r.·~i. ~:,
percent of trucken., ~upportcd it. Most !>hlppers thout;ht ~h8.t se.rvlce levels
remained constant and that ratc fluctulltiom had posed no dIffIcultIes. Only 8
few shippers convened to prjvat~. carriage; many more suer: shipper conversions
mi~ht have been expected if "destructive competition" had resulted in b laq:c
reauction in the number of truckcrs. 19 Like.wil>c, a later Department of
Transportation stud y20 found that 90 percent of Florida shippers believed that
post-deregulation service was at least as good as service before deregulation,
and 30 percent reponed improvement!>. A majority of these shippers (58
percent) perccived that deregulation had held down rnteli. Finally, economists J
Blair, J(ascrman, and McClave found that Florida.'s deregulation of intrastate:'
trucking led to a 15 percent BverClge reduction in motor carrier ratcs. 21
The cxp~rjencc uf other stales is consistent with that of California, New
Jersey and Florida. For example. in Wisconsin, 6i percent of shippers were
satisficd with deregulation, and only six percent were dissatisfied. Seventy-
three percent said that rate: information was as readily available after
deregulation as before. Carriers were eveni)' divided on the question of
deregulation. Those with increased profits tended to favor deregulation, while
some of those opposinp: deregulation were concerned about the loss of the. asset
value of their certificates of convenience and necessity.2~
I
In Maryland, intrastate household goods movers were not regulated. A
study conducted in that state in 19i3-i4 revcaled that the formeriy reguiated
interstate hou~ehold gooos cEirriers cbarred :'7 per~~.nt to 67 percen: mo;-e ~har:
unrc~ulated intrastate carriers ror comparable moves.;;;:;
1~ Freeman, A. S\.1;Ve V 0: h.'JOiQf Cf:Trje~ D>r;~uiatiop. in FJo;-io2: nne Ye?r's
EC:Pt;jfTl:::~. ICC P~actitio.:Je:-s Journcl. 51 C'o\'.-Dec. 1.9S2).
Ui State.men:
International
Subcommittee
(June 20, 1984).
of M:hanew v. Scoco:.::.:t:'., .L..ssis:c..n: Se~r::Gr\' fo:- ?olIcy and
Affairs, U.S. Department of Transportation. Befo~e the
on Surface Transportation. C.S. House of Representa:ivcl>
z: \Visconsin Office o~ ~he Commit'sioner of l"ransponc:tion, .L)erq:u;2:i?7"' ~
"~;::$cQnsin Moto;- Ca";-ie.~~ (.T ulv 19£3). Thcre 1':12 ;', 'however, be othei c2pital
losses. -
:: 31<..::-. f'::asc~~lozr; & 1\1':<:12ve~ ~\~070~ C2--;~"" D?-er\~l?:-ior;:
S'~'j')~~:T:1e~:. 6f~ F~e.\'. E~8;:.. &. S:e:.. l5S :)95-5>
... -. ~. ~. .. ~ :~.::- .~. :. ~ ... ~' ;... r . I ~ ~ .•• ~ T .', ~ "'~: or. ~. ~11' \ r r i ~. ; ~ . ~, : C) :.:'
~::--~~::i. _,.:" '.~.:: (.,':.'r. v.'~'-~ :).:: '~J~:' .: '.v.~ 't"lt.~t~{ r~·\·~_\·~ r\~ '.:~ ~ ~~.~~ r~ 0','
Rc:se;;rcb 0il1ce 0:' tbe U!t"guL Lq,:n,JGlurt,J' hi] IH.JiI~~ ~Uj,,('yt'c G~:t.ec i;,c.;
deregulation increased the numoer of carrier!> in the rn8r~ct. ~ccorciJng t.o one
survey. almost all shippers and most of the truckeff> wlth prlOr authonty 10
carn these. products believed that trucking rates had decrcascd, None of the
groups surveyed believed that general rete levels had increased as a result of
dcrcgula tion.
Consumer benefits of the type associated with derefulation at the state
level have also been realized at the national levcl. Under partial federal
deregulation, the Dumber of grants of operating authority to carrien.
quadrupled, irnpJving that entry into the trucking husiness has heen greatly
eased. 25 There 81S0 has been an increase at the national lcvcl in the numher
of independent :cte changes, with the vast numher of observed change~' being
rate decreases.2b Between 19ii and 1982, inter~:ate truckload rates fell about
25 percent and LTL rates fell about l~ percent. These declines occurred during
8 period of rising fuel costs and before the recessions of 1979-80 and
1980-81. 2' A recent federal study likewise found that regul21ed rates are
higher than competitive rlites for general freight trucl:ing. 2B
').1. Un~ubijshed su!,vt".\'S conduc:ted by the Oregon St2te Legislature's
Legislitive Research O[fic:e (1%4).
The ~e·cDrd SCI Fa;, Rerulatior., 39
C.:);r"_:TI :55: ~L.
2.S Office of Policy and Analysi~, Interstate Commerce Commission, The Effect
of Regula ro:-y Reform on the Tru~bD.& Industry: Structure, Conduct. enG
Performcn:~ (June. 1981). See also Stztement of Rec:s('. H. ':"2.\'10:- .•::-_ ChE.i:-:r.en " , .. .
of lnters:o.i:c Comrnei-ce COffiITllSSlOI:, B~:ore -ehe Sur~ace • i2.D.s,:\onG.::20I:
Sub:::ommi:;:ee 0: the House Corurnli:;:c:e' or, Pl;hiic \;'o:-1:s and Tra::,sP0rIz:ior, on
Implementation of the Motor Cz.rrier Act of 1980 (No\', 7. 1985). .
26 Statement of Reese H. Taylor, Jr~ Chairma.n of Intentate Commerce
Commission, Before the Senate Committee on Commerce, Sc-ience, and
7:aI:~D0:-:2~ior: {S~~:)~. ::, ~9S3'~. St! a.lS(; S:c~: ReDo:-:~ In:er~:c..te CD~::l~:"':e
Co~:riissi8:".. :-::;:hr~~!"'~~' n: ~:::'\'::\' ::-: :~;~' ?~:1~f-;'\' t~1():o~ Cc.~:-j~·:- .~.";~.:~"\'
(l\~Grcr~ 19S5~
· . ,f"'"10~O:-b:";:
_~,,:-)~ ;'r"."\ r.... \··~ (.~·~r .c' c:·:\~·".: :~~~~~ ,,(·.:·r~ .~;: .,
:::)~~)~:';I'I:•. ,_ : '"I!,:,"' ';", ... : ~" . • :t~,·:-;~~ i·~ .;,.~.\ :(' l)~ ~·l.~.~::. b: \4.~ ••
!,:·.C;ZJlG:~.r :C L;.t L~:IIO:::). :'1);i'PtI~ ....... ho liblppt:d small quan\ltle!> w::rl' forced
eIther to pay exorbitant rates or to seek alternatives to the regulated carriers
prior to oereguletion.2~ With the advent of deregulation, shippers no longer
must avoid the inefficiencies of regulate.d trucking by building up shipping
inventoriefi and raw materials, or by Investing in their own trucks to assure· the
service the~ require. The need for under-utilized private trucking fleets or
expensive lDventory buildups i" reduced when truckers can offer innovative
responses to shippers' service needs.. .
{ .'
III. CONCLUSION.
A significlmt body of evidence suggests thet dercguhnion lowers trucking
rates and improves service. \Ve believe that HE 658 is an important step in
moving to a more competitive motor carrier inaustr\' in Ohio. It will result in
significant benefits for consumers and comp~tition. Contract trucking firms will
be f:-ee to odd needed service and to compete on rates without waiting long
periods of time for Utilities Commission approval. Thi~ freedom should improve
the competitiveness of Ohio's manufacturmg community and result in lower
shipping rates.
We appreciate this opportunity tc present our views. \Ve. would be hzT'PY to
supp}" coP, ie!; of the S~UC1es :-ef c:-:-e.d tC in this ieacr. •• .ITi chiedi come si applica questo testo alla tua situazione?
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