If you’re a true industry veteran like me, you know what happened on July 1, 1980. For industry newcomers, let me fill you in – it was the day The Motor Carrier Act (MCA) of 1980 was signed into law. This historic legislation commenced what is known as the deregulation of the trucking industry and it was the impetus for the competitive marketplace we enjoy today.
The Act did many things, including deregulating carrier routes and territories, but perhaps most significantly, it enabled carriers to publish their own rates and price more freely. The government loosened its grip on the industry and waved in a new age of rate competition. It was a good thing, in my opinion. We need government regulation – no argument here – but there are benefits to subscribing to free-market principles.
But now I am hearing talk of some reregulation. Discussion stems from what is taking place at the Port of Los Angeles, one of the nation’s busiest harbors. In 2008 the port implemented the EPA award-winning Los Angeles Clean Truck Program (CTP). The plan entails phasing out independent contractors so only carriers with employee drivers can operate within the port. The claim is that independent drivers cannot afford to purchase and maintain the newer, greener trucks necessary to ensure the plan’s long-term success.
Rep. Jerrold Nadler, D-N.Y., plans to introduce legislation that allows ports to ban owner-operators. Seventy eight members of Congress signed a letter documenting their support and Nadler wants the legislation included in the next surface transportation bill (full story). The American Trucking Association (ATA) opposes the LA Port ban on owner-operators and says it violates federal law, which prevents state and local governments from industry regulation. In fact, the ATA has taken the issue to court; a final rule is in the making. Both the port and the ATA have until today (May 14) to file written arguments. Meanwhile, LA is not allowed to ban owner-operators from its port.
What’s interesting is that the Port of Long Beach also implemented the CTP, but their plan does not involve an owner-operator ban. The Port Authority of New York and New Jersey followed suit – it developed a ban-free CTP. There is also talk that the ban was conceived with a teamsters’ agenda. Check out Dan Gilmore’s recent column.
You’ll find there are a lot of angles and industry-wide ramifications to the LA Port story. It would be nearly impossible for me to cover them here. But the bottom line is that I think everyone should be allowed the opportunity to participate in this marketplace. Yes we need to shrink our carbon footprint; yes we need to get dirty trucks off roads and out of ports. If an owner-operator cannot keep up with reasonable regulations, then that is unfortunate but we shouldn’t ban them. To me it is reminiscent of regulation that dates back 30 years. And I think we’ve come a long way since then.
What do you think?
Agree with you on this topic. My concern is that the ban will further lead to rate regulation in these lanes. The ban would deminish the supply pool, thus causing rates to inflate. The Gov’t may then come back in to control rates, and we will be back where we started (pre 1980).
Jeff – I completely agree, let’s hope it’s not the start of reregulation.