Administration officials told Congress yesterday that deregulation of the trucking industry could assure more efficient use of scarce fuel supplies and could aid in the fight against inflation.
"It's terribly important for us . . . to do what we can . . . to make this economy more efficient," Alfred E. Kahn, the President's chief Inflation fighter, told the Senate Commerce Committee yesterday during hearings on proposals to alter federal regulation of the trucking industry.
Pointing to the large factor that increased energy costs played in boosting last month's consumer price index by 1.1 percent, kahn said a 10 percent savings in transportation costs that could result from trucking deregulation could easily mean one percent on the food CPI. "I would easily shed blood for one percent on the food CPI," he said.
Kahn called "insane" the complicated operating restrictions that impose inefficiencies on the truckers and said all economic evidence indicates that trucking rates are at least 5 to 20 percent higher than they would be if competitive market forces were allowed to work. "And don't fool yourself, no one pays for it but the ultimate consumer," he said.
Kahn appeared with Transportation Secretary Brock Adams and Charles L. Schultze, chairman of the Council of Economic Advisers, in support of a joint Carter administration-Edward M. Kennedy (D-Mass.) measure to lessen Interstate Commerce Commission control over the trucking industry.
While Congress can't do very much about such things as increases in oil prices mandated by the Organization of Petroleum Exporting Countries, Schultze said, the trucking bill is something that would have a "longer-term pay-off."
"This bill could reduce the rate of inflation by one or two-tenths of a percent a year," he said. "This is one thing we can do something about."
Schultze also sought to knock down several arguments being made by the industry against trucking deregulations, particularly the claim that small communities would be left without trucking service without ICC regulation. Schultze said there is no evidence to suggest that serving small communities is unprofitable; no firm is now being forced to serve any small points or is being given a subsidy to do so, as were airlines, he said.
Schultze added that several provisions of the bill would encourage new service to small towns by opening up entry to new firms and by removing restrictions on existing carriers that now bar intermediate stops on routes between major cities.
In contrast, officials of the American Trucking Associations, the industry trade group, and the Teamsters Union praised the current regulatory plan and warned against changing it.
Testifying for ATA, C. James McCormick, senior vice President of Briggs Transportation Co. of Vincennes, Ind., said the current strike of independent truckers provided a "frightening preview" of what would happen if the trucking industry were deregulated.
"The present crisis in the transportation of fresh fruits and vegetables emphasizes what will happen . . .," he said. "The exempt area today is the only area of motor carrier transportation where there is rate instability and uncertainty of service."
Frank Shea, administrative assistant to Teamsters Union President Frank Fitzsimmons, contended that deregulation would "destroy most of the companies" the union members work for.
However, he and most other witnesses with the exception of the ATA, called for a change in the collective rate setting powers of the 10 rate bureaus, which now have antitrust immunity to meet secretly and decide on the rates all trucking companies in regions will charge shippers. (While administration witnesses and Kennedy thought rates were too high, though, Shea said rates were depressed by the system.)
Suggesting that it was obvious that the pending measure would not be enacted into law this year, Commerce Committee Chairman Howard W. Cannon (D-Nev.) asked several witnesses whether and experiment in removing some ICC operating restrictions would be feasible or advisable in an effort to reduce fuel consumption and allow trucking companies to operate more efficiently.
For instance, Schultze was asked about the possibility of eliminating the restrictions that keep some truckers going one way empty. Schultze said he wouldn't want to jump at it without careful study because such an experiment would require a long enough time period for people to adjust their operations in order to see whether it would work. CAPTION: Picture, Sen. Edward Kennedy testifies yesterday at hearings on trucking deregulation bill. By James K. W. Atherton - the WashingtonPost