Status and Impact of the Motor Carrier Act of 1980

The Motor Carrier Act of 1980 has increased competition in the trucking industry. This has been attributed to the Act's eased entry provisions and the Interstate Commerce Commission's (ICC) liberal entry policies. Increased competition has come primarily from existing firms expanding their operations, rather than from new firms entering the market. Over the last 11 months, only 14 percent of the new applications received for operating authority have come from new carriers. Because price competition has increased considerably since the passage of the Act, large shippers are now able to compare various price and service combinations offered by carriers and can negotiate prices to obtain lower rates. However, as a result of rising operating costs and reduced rates, carriers say they are encountering financial difficulties. It is not yet clear how small communities have been affected by the Act. Some major carriers have discontinued service to small communities, but smaller carriers have replaced them in some cases. According to trucking industry officials, small communities are probably now paying a higher price for service. The owner-operator provisions of the Act were intended to: (1) make it easier for new trucking companies to obtain operating authority, (2) eliminate problems associated with oral contracts in the movement of exempt agricultural commodities, and (3) eliminate coercive loading and unloading practices. So far, owner-operators have not shown much interest in applying for their operating authority. The Department of Agriculture has opposed the use of written contracts for the interstate movement of exempt agricultural commodities and for related brokerage services, because it believes such contracts could result in serious problems for the fresh produce industry and would not produce meaningful benefits to owner-operators. ICC has not yet made a decision on the use of written contracts. Owner-operators reported that coercive loading practices are continuing with little change since the Act was passed. While evidence is not sufficient to establish that the reduced ICC efforts to conrol unauthorized carriers has affected the number of violations that are occurring, GAO believes that an increased number of carriers may be operating illegally. Because the motor carrier fuel surcharge is experiencing numerous problems that appear to be impossible to correct, an ICC task force recommended that the program be eliminated.