The End of Regulation

@double yellow link won't pull up for me says can't be found

Found updated link
http://www.crainsdetroit.com/articl...shift-put-brakes-on-anti-competitive-trucking

 

http://206.190.45.150/search/srpcac...J&icp=1&.intl=us&sig=7DJJSdniK.KfbgZyd.ly7Q--

I think this link to the article he is refering to will work..

 

Yep you found it in the far backend.
added a updated general public link.
but since mine that one wants you to register or log in I will post full article below.


June 14, 2015 8:00 a.m. UPDATED 2 DAYS AGO
Just-in-time delivery shift put brakes on anti-competitive trucking rules
By BILL SHEA

You'd think trucking parts from the manufacturer to the assembly plant would be no big deal.
After all, it's common sense, right?
It wasn't always so in Michigan, where anti-competitive regulations had legal protections for decades.
Thirty years ago, a story in the June 17, 1985, issue of Crain's Detroit Business reported on an uptick in trucking licenses granted by the state to companies hauling parts to the automakers in the wake of reform to Michigan's intrastate trucking laws.
From 1983 to 1984, the Michigan Public Service Commission -- it regulated trucking within the state back then -- authorized 70 contracts within the state to move parts forGeneral Motors Corp., Ford Motor Co., and Chrysler Corp.
That was a big number. The number of licenses authorized annually before a 1983 change to the state laws governing trucking within Michigan was "negligible," the story reported.
The rules were changed because the automakers and other manufacturers had begun adopting just-in-time delivery methods aimed at reducing supply chain costs and creating other efficiencies.
"The auto industry especially wanted to get to a competitive trucking market," said John Taylor, chairman of the supply chain management department at Wayne State University's School of Business Administration.
Just-in-time delivery was nearly impossible under the old rules, and shippers sometimes had trailers filled with parts sitting at factories that sometimes never got used.
As rapid advancements in computerized tracking and other technologies opened the logistics industry to new efficiencies, the automakers were constrained by out-dated state and federal trucking laws that protected monopolies.
Under state law at the time, trucking companies had to prove to the Public Service Commission there was a need to ship goods between two places.
Thanks to authority from the federal Interstate Commerce Commission, states controlled shipping routes, permitted trucking companies to stymie new applications and entrants, and also protected the industry's price fixing.
"All the carriers would get together in a room and fix prices," Taylor said.
ICC-approved rate bureaus approved the rates, and allowed very little fluctuation without government approval.
Pricing fixing wasn't just to make money, Taylor said. Weirdly, truckers had to have high prices to persuade the state to authorize shipping contracts.
"Once you got your authority, you had to prove your prices were high enough," Taylor said. "It was insane."
The theory at the time was that discounted rates meant trucking companies would be cheap, unsafe operations, Taylor said, and too much competition would deteriorate service.
Discounting was illegal, so manufacturers paid the costs and passed them along to consumers.
"Carriers argued that if you allowed more competitors in, no one would service rural markets and the Upper Peninsula, and they had to keep prices high to ensure safety," said Taylor, who in the 1990s was part of a coalition that successfully sought to end state trucking controls.
The myth about rural service exploded when UPS and Federal Express sought to deliver to such places, and finagled federal approval to do so.
Studies showed that deregulation wasn't unsafe.
In the end, the trucking industry realized the monopolies imposed growth limitations. For example, haulers could get state approval to move individual types of products between two places, but often couldn't get approval to ship similar goods.
"You could haul toilet paper but not paper towels," Taylor said.
At the federal level, the push began in the 1970s to bring common sense to the logistics industry, but the effort faced fierce opposition from the trucking companies and organized labor.
Finally, interstate trucking deregulated nationally with the federal Motor Carrier Act of 1980, and it led to a boom in competitive hauling across the country. Literally hundreds of thousands of trucking companies were created, compared to just 18,000 federally approved to do business in 1975.
Michigan-based trucking companies found themselves sending goods out of state -- making the service interstate hauling covered by federal rather than state law -- to more effectively move goods.
Trucking within individual states had to be reformed one by one.
Various legal challenges chipped away at the vestiges of Michigan's rate controls and other archaic rules through the 1990s, Taylor said.
Today, the state can regulate only safety and insurance, and that falls to the Michigan State Police Motor Carrier Division rather than the Public Service Commission. The PSC is no longer involved with trucking at all.
About 80,000 trucks transport 68 percent of the $835 billion worth of freight that moves through Michigan annually, state data shows.
The impact of state and federal trucking deregulation can't be overstated, Taylor said.
"It's been one of the biggest public policy successes of the past 75 years in terms of impact on the U.S. economy," he said. "Costs as percentage of the GDP declined after 1980. It was a tremendous success in reducing prices, improving service and speed. It had an impact on reduced inflation in the U.S."