We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
Home » finally!
fastlane

finally!

July 1, 2007
Clifford F. Lynch
No Comments

By now, everyone who cares knows that on May 7, 2007, the Surface Transportation Board (STB) finally snipped off one of the last remaining regulatory loose threads. In a ruling many shippers have awaited for over a quarter of a century, the board terminated its approval of the agreements among 11 motor carrier bureaus to collectively determine and set truck rates.

To understand the significance of the board's decision, you have to go back to the origins of motor carrier regulation in 1935. That year, the Motor Carrier Act brought carriers under the purview of the Interstate Commerce Commission (ICC), which was given oversight over who could enter the trucking business, what routes they could serve, and what rates they could charge. The 1935 law, however, left the legal status of collective ratemaking unclear. After a number of investigations and lawsuits, Congress settled the matter by passing the Reed-Bulwinkle Act in 1948, which allowed motor carrier rate bureaus to set rates collectively and granted them antitrust immunity for doing so.

And that's exactly what the carriers did for the next 30-plus years. Rates were set via a two-part procedure: First, the National Classification Committee (one of the 11 bureaus that were a part of this proceeding) established ratings for all products based on their transportation characteristics. Then, the bureaus established the rates. Those rates were what most shippers paid.

Then the deregulatory winds began to blow through the industry. With passage of the Motor Carrier Act of 1980, Congress for the most part deregulated the trucking business. It did not, however, lift all pricing restrictions. Nor did it rescind antitrust immunity for the collective ratemaking process. The practice was allowed to continue, although after 1980, many carriers chose not to participate.

In 1995, Congress passed the Interstate Commerce Commission Termination Act, which lifted the remaining restrictions on trucking rates with three exceptions: rates for household-goods moves, rates for certain joint motor-water movements, and rates set collectively by motor carrier bureaus. But in drafting the law, Congress also made provisions for the collective ratemaking issue to be revisited in the future. The law mandated a periodic review of existing motor carrier bureau agreements under a "public interest" standard—a task that would fall to the STB. The May decision is the result of the board's most recent review.

In that review, the STB concentrated, as it should have, on whether its continued approval of collective ratemaking agreements would be consistent with the public interest—specifically to fostering such national transportation policy goals as encouraging fair competition (with reasonable rates); allowing a variety of quality and price options to meet changing market demands and the diverse requirements of the shipping public; and maintaining a sound, safe, and competitive privately owned motor carrier system. After more than two years of deliberation, the STB concluded, among other things, that the current system put certain shippers at a disadvantage in bargaining and that collective rate increases had probably artificially inflated rates. From there, it wasn't much of a stretch to decide that the current arrangements fell short of meeting the national transportation policy's requirements.

As might be expected, this decision will not be welcomed by some carrier rate bureaus. But the fact is, there's still a role for them to play. I believe we will continue to need some form of classification to use as a benchmark and that rate bureaus will be able to provide other useful services.

All that notwithstanding, the big news is this: Finally, 27 years after deregulation, we will have a truly competitive, free motor carrier market.

Transportation Trucking Regulation/Government Truckload Less-than-Truckload
  • Related Articles

    Uber Freight finally hits the road by launching brokerage services in Texas

    Is infrastructure finally going to get its due?

    highway bill finally rolls off the Hill

Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author of Logistics Outsourcing ? A Management Guide and co-author of The Role of Transportation in the Supply Chain. He can be reached at cliff@cflynch.com.

Recent Articles by Clifford Lynch

A New Solution for Some Old Problems

The time has come

The continuing saga of driver shortages

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Fred Smith is not worried about Amazon

  • Outlook 2023: What’s in store for logistics/supply chain?

  • Ports, maritime operators see tide turning as ocean freight tsunami subsides

  • In Person: Steve Beverly of Penske

  • InPerson interview: Rob McKeel of Fortna

Now Playing on DCV-TV

89cfed30 8aac 4284 960d c8c8c1886e16

Have you checked your read rate lately?

DCV-TV 4: Viewer Contributed
No reads. Unaccounted for boxes. Boxes sent to the wrong place. A logistics nightmare! But this nightmare doesn’t have to come true. SICK’s linear line scan camera is what dreams are made of for your logistics operations. And if you’re worried about motion and vibration from conveyor belts...well, there’s no reason...

FEATURED WHITE PAPERS

  • The five best applications for robotic lift trucks in warehouse environments

  • Fulfillment Facility Improved Efficiencies by 4x

  • 3PLs: Complete Orders Faster with Flexible Automation

  • Reusable Packaging for the New Wave of Supply Chain Automation

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing