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 federal law of the United States which deregulated the trucking industry.

The United States government regulated transportation modes until a series of federal legislative acts beginning in 1978. The deregulation of the trucking industry essentially began with the Motor Carrier Act of 1980 (S.2245), which was signed into law by President Jimmy Carter on July 1, 1980.

The MCA was envisioned to be a sweeping de-regulation of the trucking industry. When President Carter signed the bill, he proclaimed: "I have today signed into law S. 2245, the Motor Carrier Act of 1980. 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."

The Act prohibited rate bureaus from interfering with any carrier's rights to publish its own rates, 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. Before this law was passed, the industry had simply passed along higher wages and operating costs to shippers. The law would have far-reaching consequences, causing price competition and lower profit margins.

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 carriage surged, expanding 70 percent between 1981 and 1986.

Deregulation 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.

[edit] References

• Moore, Thomas Gale. "Rail and Truck Reform: The Record So Far." Regulation. November/December 1988.
• Organization for Economic Cooperation and Development. International Conference. Road Transport Deregulation: Experience, Evaluation, Research. November 1988.[[Category: