Us Government & Transportation Regulation

US GOVERNMENT & TRANSPORTATION DEREGULATION 1

US Government & Transportation Deregulation

Galang Pham

Embry Riddle

US GOVERNMENT & TRANSPORTATION DEREGULATION 2

The United States Government played a critical role in the regulation and deregulation of transportation. The US Government first played a role by establishing the Interstate Commerce Commission (ICC) to oversee the railroad industry in 1887. This led to a century of surface freight regulation. The trucking industry was also brought under control of the ICC in 1935. They implemented the Motor Carrier Act which required new truckers to seek certifications from the ICC. This made it difficult for new trucking companies to enter the industry. The ICC’s regulation over the trucking industry performed poorly as well. Regulation reduced competition and made trucking inefficient. Regulation of the railroad industry created price competition between railroads by discounting, price cutting, and rebating. The Transportation Act of 1920 gave the ICC complete authority over the railroad industry. The railroad industry was still not as profitable even at this point. The ICC kept a firm grip over the railroad industry for three quarters of the twentieth century. During this time regulations restricted rates and encouraged price collision. This led to many railroads facing bankruptcy and led to the US Government eventually intervening. During the last quarter of the twentieth century major changes to regulation were made by the US Government. In 1976 Congress passed the Railroad Revitalization and Regulatory Reform act. In 1980 the Motor Carrier Act was enacted which limited the ICC’s authority over trucking. Finally in 1995, the ICC termination act was passed. This act established the Surface Transportation Board (STB) which oversaw the railroad industry. The act also transferred truck licensing and instated state regulation of trucking. This eliminated the need for...