The purpose of this paper is to examine the history of motor carrier regulation in the United States and to assess the potential benefits and costs to consumers from deregulation of trucking in 1980. Benefits are based on the impact of increased competition and changes in operating restrictions on rates and logistics cost savings while costs are based on changes in highway safety due to the impact of deregulation on truck maintenance, truck driver behavior, and changes in the motor vehicle mix.
The results of this study indicate that the partial deregulation of trucking in 1980 entailed considerable benefits due to the relaxation of entry restrictions and changes in operating restrictions. Average annual logistics cost savings were $38 billion from 1981 to 1986. It was concluded that the direct effect of deregulation on highway safety was favorable indicating that truck safety and truck driver behavior had improved under deregulation. However, deregulation had a positive effect on the proportion of miles driven by trucks which, in turn, had a positive effect on fatality rates. Thus, the indirect effect of deregulation was unfavorable. These results suggest that the driving environment, rather than the truck or truck driver, may play a major role in highway safety under deregulation. The need to monitor the adequacy of the existing road system is also reinforced by recent increases in the speed limit from 55 mph to 65 mph in many states.
The passage of the M o t o r C a r r i e r A c t in 1980 was a major step in the deregulation of the trucking industry in the U n i t e d States. This industry, which was competitive in structure, had been regulated since 1935 when its expansion p o s e d a threat tO the regulated railroad industry. O n e response at that time might have b e e n to deregulate the railroad industry since the advent of trucking meant that the railroads no longer had a m o n o p o l y on surface freight. Instead, Congress elected to regulate t r a n s p o r t a t i o n of all surface freight.
The existence of regulation for a competitively structured industry such as trucking led to considerable d e b a t e and pressure for regulatory reform. The regulation of trucking was viewed as an example of the capture theory of regulation in which the private interests of firms in a regulated industry d o m i n a t e the public interest (Kushman, 1986;Peltzman, 1976;Stigler, 1971).