The Reagan administration called yesterday for abolishing antitrust immunity that allows competitors in the trucking industry to decide collectively what rates to charge for moving freight.
"There is no justification whatsoever for the continuation of antitrust immunity in the trucking industry in any form," William F. Baxter, assistant attorney general in charge of the antitrust division, told the Motor Carrier Ratemaking Study Commission at its first public hearing.
Baxter told the 10-member commission, which is composed of six legislators and four public members, that allowing free entry into the trucking industry is not enough to protect the public interest and promote economic efficiency. "If lawful, companies will attempt to collude and keep rates at above-competitive levels," he said.
The commission, created last year as part of the trucking industry reform law, must advise Congress and the president by Jan. 1, 1983, whether antitrust immunity should be eliminated or continued for the rate bureaus' activities.
The industry panels currently have immunity to set general rate increases, rates for single-line shipments--those carried by single companies from the point of origination to the destination; rates for joint-line shipments--those carried between two points by two or more companies; and to decide how to classify commodities for rate-making purposes. Under the law, the rate bureaus lose their antitrust immunity to set single-line rates automatically on Jan. 1, 1984 unless Congress acts to reinstate it.
"Motor carriers, like businesses in virtually every other sector of the economy, should be required to set their rates individually, on the basis of their own costs and service capabilities," Gary M. Broemser, director of the Transportation Department's Office of Regulatory Policy, testified. He said government-approved price-fixing by trucking companies inflates rates and protects inefficient carriers.
He also rejected industry claims that the rate-setting allows trucking companies to make greater profits on some routes in order to subsidize service to smaller communities where they might otherwise lose money. He said studies show that 80 percent of the goods being delivered to rural areas are being carried by unregulated trucking companies and United Parcel Service, not the trucking companies that participate in the rate bureaus.
James C. Miller III, chairman of the Federal Trade Commission, said the members of that independent agency also unanimously recommend the complete elimination of antitrust immunity for the industry. "The benefits claimed for collective ratemaking are either illusory or they could be achieved in less anticompetitive ways," he said.
The commission also took testimony from witnesses representing the trucking industry, the Teamsters Union and shippers' groups, who were generally more supportive of rate-setting.
Speaking on behalf of the American Trucking Associations, Ross Gaussoin, president of the Silver Eagle Co., said collective rate making has permitted the creation and maintenance of a national trucking system. Without the ability to set rates, he said, "no such system will be capable of existence" unless the nation "totally nationalizes the business of carrying freight."