A Bold Move: Deregulation and Today’s Freight Industry
President Carter signing the 1980 Motor Carrier Act
Although somewhat controversial today, it has provided long-term benefits to consumers nationwide.
Regardless of your political views or personal opinion of former President Jimmy Carter, there’s no denying his profound impact on the trucking industry. His legacy in transportation policy is historic.
In 1980, two groundbreaking pieces of bipartisan legislation reshaped freight transportation: the Staggers Rail Act and the Motor Carrier Act. Both were driven by evidence-based data with the goal of delivering significant benefits to consumers. Among these, the Motor Carrier Act has had a particularly lasting influence on how goods are shipped and how the trucking industry operates today—all thanks to Jimmy Carter, a peanut farmer and one-term president.
The Staggers Rail Act was largely a response to the financial struggles of the railroad industry and the federal government’s reluctance to continue subsidizing freight rail services.
In contrast, the interstate trucking industry of the 1970s was relatively stable and quite profitable.
As President Carter stated, “The Motor Carrier Act of 1980 will bring the trucking industry into the free enterprise system, where it belongs.”
Before deregulation, the federal government required for-hire interstate trucking companies to obtain an operating certificate from the Interstate Commerce Commission (ICC). These certificates were highly valuable, estimated to represent 15 percent of trucking companies' annual revenues—roughly $2 billion to $3 billion.
This system resulted in above-competitive profits. Combined with unionized labor, some estimates suggest that regulated trucking transferred as much as $3.3 billion annually from shippers and consumers to trucking companies and their employees.
However, the passage of the 1980 Motor Carrier Act dramatically changed the landscape. It introduced intense competition and lowered prices for shippers, leading to a surge in new market entrants. At the same time, it caused a decline in driver pay due to increased pressure on carriers to operate more efficiently, often at the expense of labor costs. Ultimately, this shift moved the industry toward a more market-driven structure with less government control over routes, rates, and entry barriers. By the late 1990s, real operating costs per vehicle mile had dropped 75 percent for TL and 35 percent for LTL carriers.
Both the Staggers Rail Act and the Motor Carrier Act are considered landmark bipartisan successes. More than 40 years later, no serious proposals have been made to undo these transformative policies.
In 1979, independent truckers had a lot to be unhappy about.
High fuel prices and potential deregulation caused protests at the White House,
From the carrier's perspective, the debate over regulation continues, but it's clear that deregulation has brought about significant market improvements, providing long-term benefits to consumers nationwide.
Read here for more information about the history of freight deregulation.