Contrary to claims by the American Trucking Associations, the trucking industry is highly concentrated and major routes are dominated by just a few firms, according to a new study of industry data release by Sen. Edward M. Kennedy (D.-Mass.).
Kennedy, a strong proponent of trucking deregulation, will be discussing the study as the leadoff witness at Senate Commerce Committee hearings on deregulation today.
Although industry spokesman usually cite the existence of 16,600 regulated trucking companies as proof that federal regulation has preserved competition, Kennedy said the data shows that in individual markets - where shippers have to make their choices - the top four firm in each account on the average for more than three-fifths of all the business.
The data used is routinely compiled by the 10 rate bureaus in the industry which collect the information on a sample basis for use in supporting general freight rate increase requests before the Interstate Commerce Commission. The information, supplied under the threat of subpoena, has never been analyzed before for market shares, however, Kennedy's staff said.
Picking routes by computer where there were at least 30,000 freight bills on each route for calendar 1976, Kennedy said the analysis shows that:
In long-haul markets - more than 750 miles in distances such as Los Angeeles-New York and New York-Miami - the four largest firms have an average market share of 62 percent.
In medium-haul markets - city pairs such as Chicago-Baltimore and St. Louis-Dallas which are between 300 and 750 miles in distance - the four largest firms have an average market share of 64 percent.
In short-haul markets - routes of under 300 miles like Washington-New York - the four largest firms have an average market share of 64 percent.
Kennedy said an agreement with the rate bureaus to get the date precludes him from releasing the names of the firms in each market.
"The results of this are quite startling and rebut the ATA's contention about concentration in the industry." Kennedy told reporters. "This is a very concentrated industry."
The reason, he contended, is government interference. The data indicated that concentration is highest in regions of the country that had the fewest firms to get grandfathered operating rights in 1935 when the industry came under federal regulation, he said. Concentration by the top four firms is highest in the West and Southest, where growth has been most pronounced since 1935, he added. "The conclusion is that ICC restrictions on entry have made this an extremely concentrated industry," Kennedy said.
Kennedy is teaming up with President Carter to sponsor legislation that would significantly deregulate the trucking industry; one of its key provisions would allow new firms easier entry to the trucking business and would give existing firms the freedom to expand their routes significantly.
Kennedy said the analysis of the industry data also indicated that less than 3 percent of freight shipments moves under independently set rates despite the ATA's contention that the right to independent action by trucking companies shows that competition exists even though trucking companies have a special antitrust exemption that allows them to get together in the rate bureaus and set prices.
Bennett C. Whitlock Jr., ATA president, said the organixation is analyzing the Kennedy report and would have a full statement on it as soon as possible. He maintained, however, that using overall nationwide figures - figures Kennedy says aren't significant compared to individual markets - shows the trucking industry to be far less concentrated than the motor vehicle, steel and cigaret industries.