The Existence of Monopoly Profits in the Motor Carrier Industry

Abstract

THE effect of the U.S. Interstate Commerce Commission's (ICC) regulation of the motor carrier industry on the allocation of resources within the transportation sector has been the subject of heated public debate since the advent of such regulation in 1935. Opponents of ICC regulation have charged that it has restricted entry into the motor carrier allowed regulated truckers to earn excessive profits, redistributed income from consumers to producers, and misallocated traffic among the various transportation modes.1 One published estimate suggests the costs of ICC motor carrier regulation could total $2.5-$3.3 billion per year.2 Trucking industry spokesman disagree. In The Case for Economic Regulation of the Motor Carrier Industry, recently submitted to the Senate Committee on Commerce, Science, and Transportation, the American Trucking Association argues that continuing present regulation is important to the public welfare. They believe entry controls, rate regulation, and collective rate-making rights are all necessary to prevent destructive and assure continuity of service. They believe that controls on entry promote sound and avoid destructive competition and maintain a financially viable industry, that authority