What is the Motor Carrier Act?

Two different pieces of legislation in the United States are known by the name “Motor Carrier Act,” one passed in 1935 and another in 1980. This article focuses on the Motor Carrier Act of 1980, passed as part of a deregulation program for the transportation industry. This piece of legislation had the effect of reducing government oversight of the trucking industry in the United States. Proponents of the Motor Carrier Act argued that it would increase competition and decrease inflationary pricing associated with trucking costs.

Deregulation of the transportation industry in the United States began in the late 1970s with the railroads. The 1980 Motor Carrier Act was intended to address perceived issues with government regulation. Truckers and industry representatives were concerned about regulatory interference with trucking operations, making it harder to do things like set prices. Often, rising costs associated with trucking were passed down the line because trucking companies could not directly raise prices as a result of regulatory restrictions.

Under the Motor Carrier Act, the activities of the Interstate Commerce Commission were restricted, allowing trucking companies to set their own prices and changing the regulatory procedures for obtaining trucking licenses. The legislation still required basic liability insurance and other measures, but deregulated trucking in the United States significantly.

Competition did indeed increase in the wake of the Motor Carrier Act. The number of trucking companies in the United States increased radically and there was an especially large jump in low-cost, non-union trucking companies. For truckers, this made union work more difficult to find, putting truckers in a weaker position when it came to negotiating details of their work environment and wages. Pricing for trucking also became much more flexible, with prices fluctuating more naturally in response to changing market conditions. The deregulation also contributed to a growth in mail order and later Internet commerce by making shipping fast and affordable.

Since the passage of the Motor Carrier Act, other acts of legislation concerning trucking have been passed to address issues like trucking safety, the kinds of goods trucking companies can transport, and taxes and tariffs on goods transported by truck.

The earlier Motor Carrier Act in 1935 was essentially the opposite. It increased regulation of the transportation industry, classifying bus lines and airlines like utilities and requiring tight government oversight. This was done for safety, as well as other reasons. The general trend of regulation in the early part of the 20th century and deregulation in response to political pressures in the later part can be seen in a number of other industries in the United States.