|
•
<br />IE : OURNAL OF COMMERCE. T1+unday, Fstwuary 19. 1987
<br />~C[~e ~ourn~r of t~ommerce
<br />nab tassoerrlal
<br />A KaYOM-Riaaar BuaYnaa Mamatbn $an10a
<br />Pounded In 1827 b~ Samud F.B. Morse
<br />sa0 !0004 wraru. arr
<br />00r a sawn rwr~. r rw.rr
<br />wean Dan. ~...d... rr.r,r
<br />aoaaar ~ w~0s. o..r ar,q.,
<br />uxar ~ ww, arr
<br />a*uraa0 a~a011. a..aw. arr
<br />aOauLLD r. ueiruK J4 ar/aan rNaOr
<br />rr.wa arr, ~4ra ~.+.. vw w.w.ri
<br />rare ae~woor owr.w .r rr„r~
<br />~...rn r.uw7 arr r~aa~ a wuuo
<br />n0r~a a ~a .w..++r+T~.~. rr a.~r
<br />O+r. rrwYyr~ a..., am 0t..ur
<br />asw a owrs yr n..r.,,vaw.wq
<br />arr e..r arr ' awTM ~. rua
<br />~i'.: r. r~w~~ arr. /1~.~ Mr r,..r.wwr.,.. IYir~r
<br />yrrr rorraa aoru~0 arra0a
<br />err, a,.~.., a..r a+r.Y vd rwrr,u-,~~nao
<br />~~0..r, aa..r r,ruw.^ ~cw,r~rrw~w..r.
<br />~i.rr+ ~u~~ +0~0 `fir
<br />1r arr r o.r.r» aawanawn
<br />r, ar~r.~ Mr ...w ar,Aw.. a,wn..r ~n r ann rw w! b
<br />tw w,.r w c1~..we, ~ na yr wa kr. err. +aaaF
<br />acct Ow hr.p err r a~. ur. r rrrr rrr~ wor
<br />rw*Warac aw .r... rrMw r
<br />n. ~..r r w.r•. «a rr.e.a ar..4 w~rq, rt awn
<br />Market Sets Truck Rates
<br />A CADRE OF FREE MARKET ENTHUSIASTS meets
<br />in Washington today to latutcb what has become an amual
<br />campaign -the drive to complete trotting deregulation.
<br />This Lust attempt to finish a reform program begun seven
<br />years ago Domes at an msettled time for the trucking
<br />industry. Many carriers Gave been engaging la a rate
<br />akirariah for the last several months. In part, fhb b a
<br />response W shipper demands for lower rates, a reactloa to
<br />strong reported profitlt by many carriers for much of 1986.
<br />Rate cutting Dy Roadway Express, one of the industry's
<br />Lrgeat and moat powerful carrier, has added to the pres-
<br />are.
<br />Truckers also are awaiting reaction to reatlirmatloa
<br />69 an American Trotting Associations 'blue ribbon fast
<br />tom' of the obed tar a government role is a naturally
<br />competitlve IaduBtry. The task force, which included 37 of
<br />trucking's top executives, outlined a series of well-cooaid-
<br />ered but flawed arguments In defense of economic regula-
<br />ti00.
<br />Whlle the tank force was debating the arcane qualities
<br />a[ rate regulation and collective price Betting, Roadway
<br />and its rnmpetiton were responding to the marketplace In
<br />tree compeUtlve fashion. The Akron, Ohio, carrier, faced
<br />with declining market share, reacted with strong fourth
<br />quarter rate N~
<br />As Roadway fought to regain business, an important
<br />decision loomed. Most of the industry's rate bureaus -
<br />carrier associaUom with antitrust immunity to set height
<br />eLarges -were preparing to file their amual general rate
<br />increases with the lntentate Commerce Commisslon.
<br />Those price hikes, whicb reflect average cast increases to a
<br />geagraPhical regfoa, figured to average about 5%.
<br />Roadway,rrfous about Its campaign to recapture-:
<br />Duslneas, urg bureau to approve ^ modest 2A% lo-
<br />crease, enough to cover higher labor casts only. But the
<br />camera proposal was voted down in favor of a fi% la-
<br />crease. When the rnmpany said !t would 61e Independently
<br />for the smaller hike, many rate bureaus responded to
<br />Roadway's competitive challenge and reconsidered. The
<br />majority of bureau increases Dow [figure to be closer to 3%
<br />than S%. '
<br />Roadway stressed that its independent tiling was Dot a
<br />retreat from its support. for collective rate mating. Clearly, ~
<br />however, its action struck a blow for individual coat as
<br />countabillty over catchall collective averages.
<br />And what OI American Trucking AssociaUom' task
<br />force report? In one way, the study was right when it said
<br />the marketplace, even with regulation, sets inteeatate
<br />freight rates. Roadway proved that
<br />But why were rate bureaus Deeded !n the first place?
<br />Roadway, admittedly an industry leader, wan able to calcu-
<br />late its costs and suggest appropriate rates ATA's task
<br />force says smaller carders cannot establish their own
<br />prices. We disagree. In an era of sophisticated and respon-
<br />alve rnmputers, n Ls hard to Imagine ^ fleet that cannot
<br />figure Its curb and charge a rate that coven them, with a
<br />fait profit
<br />The task force further defended rate eegulatioa and
<br />collective rate mating by ImisUng they tooter a oommoo
<br />language that promote eifideocy. Perhap4 but govero-
<br />meat regulaUoO and ezemptiom Lrom the antitrust laws
<br />are not needed to set a framework for etiicient traaspor-
<br />tatioa The Justice Department relntomd that aoUoo this
<br />month when It approved a shipper agents' propcaal for a
<br />uniform transportation code for storage and detentloa
<br />charges tucurred with intermodal shipments
<br />Support [or rate regulation may ultimately hinge, as
<br />the report suggests, ao the protection it affords carriers
<br />from treblt-damage antitrust lawsuits. Under a Lw recent-
<br />ly upheld by the Supreme Court, a freight rate filed with
<br />the ICC it comidered legal if it b not chslleoged there.
<br />It rate regulation affords this special pr~otecUoq the
<br />report never explains why. Other tadustries function well
<br />enough under the antitrust laws, even with the threat of
<br />treble-0amage lawsuits. No doubt truckers would do just ss
<br />well.
<br />The task force report fails to show why trucking needs
<br />the government's guiding hand. It collective price setting is
<br />good for carder sad shippers, as ATA alleges, then why
<br />the Increase is independent rate actioaa, freight rate dis-
<br />counting and confidential rnntract rates?
<br />With a distracted Congress foLVaing oo budget deficits,
<br />trade legislat-on and a boat oI other coocerm, trucking
<br />deregulation seems a long shot in 1987. Nevertheless, the
<br />trucking reform coalition meeting this week undoubtedly
<br />will press ahead. Marketplace forces are also pushing the
<br />Industry toward further deregulation, whether it realizes it
<br />or not
<br />
|