Government economic regulations of for-hire transportation covered entry into the industry, exit from the industry, rates, quality of service, the issuance of securities, accounting systems used, and mergers. At both the federal and state levels, private carriers and certain for-hire carriers -usually carriers of agricultural commodities and those transporting goods locally- were exempt from government economic regulation.
Control of entry meant that a truck operator could not enter the regulated for-hire trucking industry without prior authorization by the regulatory agency. This enabled the regulatory agency to decide how many carriers there would be, whether an applicant was financially sound, what commodities a carrier would be allowed to carry, and what routes and points it could serve. At the federal level, and often among the states, prospective common carriers had to show that the public needed their services. Consideration was given to the effect of a new entry on existing carriers. Under federal and often state regulations, contract carriers were required to show that their proposed service would be consistent with the public interest. This test was more easily met by contract carriers than the test for common carriers because public need and the effect on existing carriers was not an issue.
The chief purposes of rate regulation were to ensure that rates are reasonable for both user and carrier and to prevent unjust discrimination in rates. Any proposed new rates or changes had to be submitted to the regulatory agency, which then approved, rejected, or modified the proposal.
Economic regulation of transportation was criticized in some quarters on the ground that it eliminated competition, created inefficiency, caused empty or partially loaded trips, required excessive fuel consumption, and led to higher rates. Proponents of economic regulation, while admitting that it caused some problems, insisted that it stabilized the industry and that the benefits outweighed the disadvantages. The Motor Carrier Act of 1980 passed by Congress substantially reduced the ICC's jurisdiction over truck transportation and allowed truckers greater freedom to enter the industry, determine their rates, establish routes, and carry out mergers. Most states, however, still impose some economic regulation on truck transportation.
