BEFORE THE INTERSTATE COMMERCE COMMISSION: REVENUE NEED STANDARDS IN MOTOR CARRIER GENERAL INCREASE PROCEEDINGS

by Judith Herman on November 19, 1979
by Judith Herman, Roy A. Nierenberg, R. Robert Russell and Thomas D. Hopkins

The Council on Wage and Price Stability has submitted comments to the Interstate Commerce Commission on changes
in truck rate-setting standards.  The Council recommended certain changes that would make the present system of trucking rate-and-entry regulation less inefficient and less inflationary. Among the recommendations is the proposal that requested rate increases be evaluated in terms of the rate-of-return earned by investors in the trucking industry. That would represent a significant improvement over the ICC’s current emphasis on target “operating ratios” (ratio of operating expenses to operating revenues), that may result in “cost-plus” rate regulation and excessive profits, the
Council stated.  The Council stressed that more fundamental changes allowing increased competition to supplant existing rate-and-entry regulation are needed (as called for in the Administration’s trucking bill), but said that interim
steps by the ICC to keep the present regulatory system from encouraging excessive rate increases are important.  A copy of the Council’s comments is attached.

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