Opinion ID: 406749
Heading Depth: 2
Heading Rank: 1

Heading: Previous Law and the History of the Trucking Industry

Text: 20 In Art Pape Transfer, supra, at 93, the Commission summarized what applicants for common carrier authority had been required for many years to establish: 21 Under the old law every common carrier seeking to enter the regulated trucking industry or expand its existing operations had to meet two substantive statutory tests. First, it had to demonstrate that it was fit, willing and able to provide the proposed transportation service. Second, it had to show that the transportation to be provided is or will be required by the present or future public convenience and necessity. See old 49 U.S.C. 10922(a). 22 In applying the second substantive test the Commission interpreted public convenience and necessity in accordance with its 1936 decision in Pan-American Bus Lines Operations, 1 M.C.C. 190, 203 (1936): 23 The question, in substance, is whether the new operation or service will serve a useful public purpose, responsive to a public demand or need; whether this purpose can and will be served as well by existing lines or carriers; and whether it can be served by applicant with the new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest. 24 It is this second test that has been substantially altered. A report of the House Committee on Public Works and Transportation observed that 25 the Commission (had) reevaluated its historic approach toward applications for authority to operate as motor common carriers. For example, in Ex Parte No. MC-121, Policy Statement on Motor Carrier Regulation, 44 Fed.Reg. 60296 (1979), the Commission determined that the adequacy of existing service should no longer be a factor in considering applications. The purpose in making that change was to place more emphasis on the benefits of competition rather than on the protection of existing carriers. 26 H.R.Rep.No.1069, 96th Cong., 2d Sess. 13 (1980) (hereinafter House Report ). 27 The change in policy from the 1930's to the 1980's as represented by the shift from the 1936 standards set forth in Pan-American, supra, to the 1979 Policy Statement in Ex Parte No. MC-121, supra, was brought about because the trucking industry had changed from a struggling industry in 1935 when the first Motor Carrier Act was enacted to one of the largest industries in America by 1979. Today the trucking industry is the nation's largest employer with over nine million employees. It carried 510 billion ton miles of freight in 1976 and its operating revenues for 1977 exceeded $23.2 billion. The largest trucking companies had an average return on equity of 18.5 percent for 1978. 44 Fed.Reg. 60298 (Oct. 19, 1979). 28 For some time it has been recognized that today's thriving trucking industry no longer requires the protection from competition that was warranted in earlier years. In fact, the courts in P. C. White Truck Line, Inc. v. ICC, 551 F.2d 1326 (D.C.Cir.1977), and in Trans-American Van Service, Inc. v. United States, 421 F.Supp. 308 (N.D.Tex.1976), stated that the Commission was required to consider '... the contribution that increased competition might make to the public weal.' P. C. White, supra, 551 F.2d at 1329. 44 Fed.Reg. 60297 (Oct. 19, 1979). All this brought about Ex Parte No. MC-121, 44 Fed.Reg. 60296-60300 (Oct. 19, 1979); and the Motor Carrier Act of 1980, Pub.L.No.96-296, 94 Stat. 793 (1980); with its new Motor Carrier Entry Policy, 94 Stat. 794-796, see 49 U.S.C.A. § 10922 (1982 Supp.); its change in the National Transportation Policy concerning motor carriers, 94 Stat. 794, see 49 U.S.C.A. § 10101(a) (1982 Supp.); and its removal of certain restrictions, 94 Stat. 796-797. See generally House Report, supra at 12-17. 29 The Senate Committee Report on the new law also indicated that the prior motor carrier entry policies were being drastically altered: 30 The Committee clearly rejects the historic approach of the ICC toward applications for authority to operate as motor common carriers of property. S. 2245 adopts a new section to govern such applications which reflects the Committee's strong belief that competition will bring about the most efficient and economical delivery of transportation service to the public. 31 S.Rep.No.641, 96th Cong., 2d Sess. 5 (1980) (hereinafter Senate Report ). It thus seems clear that the Policy Statement in Ex Parte No. MC-121 was endorsed by Congress when it passed the 1980 Act. 13