President Carter has approved a sweeping legislative proposal to deregulate the trucking industry, government sources said yesterday.
The White House immediatiely began to circulate the proposal quietly on Capitol Hill, indicating a willingness to be flexible on some provisions in order to line up congressional support for the controversial measure.
The bill is expected to win the support of Sen. Edward M. Kennedy (D-Mass.), a strong proponent of trucking deregulation. Kennedy has been circulating his own proposal, but delayed introduction of it to give the Carter administration time to put together its proposal.
Although the Kennedy and Carter proposals differ in some details, their aim is the same: a more competitive trucking industry subject to the forces of the marketplace rather than regulation by the Interstate Commerce Commission.
Proponents of trucking deregulation argue that a more competitive industry would result in lower shipping rates, and therefore lower consumer prices, for food products and other commodities hauled by trucks, a more fuel-efficient industry, new services to small towns and new opportunities for small businessman to enter the industry.
As outlined on the Hill yesterday, the Carter proposal would:
Make it much easier for new trucking companies to enter the business.
Eliminate the special antitrust exemption that allows trucking companies to agree jointly on the rates they will charge and give companies immediate flexibility to lower and raise rates within certain limits without ICC interference.
Remove restrictions limiting the types of commodities that trucking companies may transport and the routes they must follow.
Exempt from ICC regulation altogether all agricultural and horticultural commodities, as well as farm implements, fertilizers and chemicals.
Carter's action coincided with ratification by the Teamsters union of a new nationwide contract for wages in the motor carrier industry. It was no secret that the White House had delayed action on trucking deregulation, a goal the president had endorsed repeatedly, until the conclusion of the Teamsters' negotiation, hoping the contract would fall within its anti-inflation guidelines.
In a speech to the Syracuse University Salzberg Conference on Deregulation in New York yesterday, Frank E. Fitzsimmons, president of the Teamsters union, blasted deregulation not afford." He said the Teamsters were developing a legislative program to counteract deregulation. As outlined, it appeared that it would give trucking companies rate freedom but would bar new competition.
In contrast, the Carter proposal would establish a new policy to govern ICC decisions over trucking transportation emphasizing maximum competition and reduced entry barriers.
Now, the ICC grants entry applications only if the applicant can show that the transportation applied for is "required by the public convenience and necessity." The proposal would shift the burden of proof to opponents of new competition to show that the proposed new services would be inconsistent with the public convenience and necessity.
In granting new applications, the ICC would be required to consider whether the new service would serve a useful purpose responsive to the public; whether the service will be improved, especially at smaller communities, and whether there will be lower rates and a more competitive environment.
By removing operating restrictions, the draft bill seeks to improve the efficiency of trucking companies and cut unnecessary consumption of fuel. For instance, the proposal would remove immediately the "backhaul" restrictions that require some trucks to go back empty because they can't carry regulated commodities in both directions.
All route restrictions, including requirements that a trucker takes specific, sometimes circuitous, routes and pass through designated gateways, would be removed.
The proposal would give the ICC broad authority to exempt a trucking company from statutory or regulatory requirements altogether if an exemption would be consistent with the new policy statement. Packages up to 500 pounds automatically would be exempt from ICC regulation.