When President Clinton is asked about the progress of his campaign to re-invent the federal government, he likes to bring up the new federal law aimed at deregulation of the trucking industry. American consumers, he says, will save up to $8 billion a year as a result of reduced federal paperwork requirements for shippers and their motor carriers.
That may very well happen. But if so, it won't be without some rather powerful side effects in virtually every state capital in the country. The fact is that Clinton isn't just deregulating trucking - he's taking a sizable step toward putting dozens of state commerce commissions out of busiess. As of Jan. 1, these agencies will no longer have authority over the pricing habits of trucking companies, even those operating solely within state borders.The measure Clinton signed last August summarily prohibits states from regulating prices, routes or other services of any motor carrier that transports property. In 40 states that currently exert some regulatory control, truckers will no longer need state approval before they change their prices or serve new areas. States can continue to regulate the safety and insurance side of the trucking business. But for many of them, losing the authority over price means losing much of the rationale for their existence.
In one dramatic but largely unnoticed move, Clinton and Congress brought down a regulatory structure that had been in place for 60 years. That structure, set up initially to combat the predatory practices of the railroads, was built on the idea that only close government supervision would prevent shippers and carriers from using discriminatory pricing strategies or simply abandoning high-cost rural areas.
In place of this venerable system comes - well . . . no one really knows. The new law is supposed to replace the "patchwork of state regulations" with uniform national standards. Sounds familiar, doesn't it? Yet federal oversight of interstate trucking, which has been the province of the Interstate Commerce Commission since 1935, is also being curtailed under terms of another bill to scale back, and perhaps eventually eliminate, the ICC. So for the time being at least, bureaucracies at both the state and federal levels are operating in a cloud of uncertainty.
For instance, one of the jobs state agencies can no longer do under the new law is require carriers to file tariffs describing their particular structure of rates and services. The federal government doesn't really do that, either: The ICC receives rate filings, but it hardly pays any attention to them.
So are shippers and carriers spared any legal requirements whatsoever under the new system? Has all regulation of trucking prices effectively ended? Both the feds and the states seem to be operating as if the answer is yes. The ICC is shutting down its tariff filings operation, and state transportation and commerce agencies are doing likewise. The Illinois Commerce Commission, for instance, has issued pink slips to 150 of its 400 employees.
What happens next is anyone's guess. In 1980, when Congress first deregulated truckers, there was an enormous increase in the number of interstate carriers but also a wave of trucking bankruptcies. State deregulation may similarly jeopardize thousands of small- and medium-sized trucking firms.
"They will be bankrupted by the frenzy of new competitors cherry-picking the traffic that existing carriers rely on for survival," says Tennessee's Keith J. Bissell, president of the National Association of Regulatory Utility Commissioners.
But only the Teamsters, the union that represents truck drivers, seems to agree with Bissell that deregulation will result in job losses and pay cuts. Shippers and large trucking companies, in particular, are united in their desire for removing both federal and state oversight of their industry.
"Trucking is no longer a quasi-utility," says Edward M. Emmett, president of the National Transportation League, a shippers' association. "It is now a service industry, and neither it nor its customers need or want utility-style regulation."
Seemingly overnight, the trucking world now has been turned upside down. The president is surely right that millions of dollars in paperwork and bureaucratic costs will disappear. On the other hand, neither he nor anyone else has provided a road map for what comes next.