Motor Carrier Deregulation: Implications of Florida's Experiences for Northeast Agriculture and Rural Communities

Beilock, Richard; Freeman, James · 1983 · Crossref

DOI: 10.1017/s0163548400003587

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Summary

This paper examines the impacts of motor carrier deregulation on agriculture, small communities, and rural areas, using Florida’s experience as a case study for the Northeast. The authors selected Florida because it was the first state to fully deregulate nonpassenger motor carrier transport (July 1980), providing a track record sufficient for analysis. Florida’s geographic and economic profile—characterized by concentrated population centers, large sparsely inhabited areas, and a significant directional freight imbalance with the Northeast—makes it an ideal analog for Maine and the broader Northeast region. The study aims to determine whether deregulation harms service availability and affordability for rural shippers, a primary concern among regulatory proponents. The methodology relies on four surveys conducted by the authors one to eighteen months after deregulation, targeting carriers (C), shipper/receivers (S/R), private carriers (PC), and agricultural truck brokers (ATB). These surveys were supplemented by two Interstate Commerce Commission (ICC) studies: the *Small Community Service Study* (SCICC) and the *Initial Carrier Shipper Responses to Intrastate Trucking Deregulation in Florida* (FLICC). The authors’ surveys sampled firms existing prior to deregulation to ensure respondents could compare pre- and post-deregulation conditions. Data collection methods included mail and phone surveys, with sample sizes ranging from 52 usable responses for private carriers to 160 for shippers/receivers. The findings indicate that deregulation significantly increased competition and reduced rates. Approximately 80% of carriers and 49% of shippers/receivers reported increased competition, while 85% of shippers/receivers and 94% of agricultural truck brokers believed rates were lower than they would have been under regulation. Contrary to fears that rural areas would suffer, service levels improved or remained stable for most respondents. Rural shippers reported higher satisfaction than urban counterparts, with 65% preferring deregulation and 65% noting reduced rates. Service availability, on-time performance, and freight loss frequency generally improved or stayed the same. Private carriage usage patterns remained largely unchanged, with only 17% of private carriers expanding fleets and less than 6% of shippers shifting between private and for-hire carriage. Additionally, concerns regarding commodity flow imbalances were not substantiated; competition increased equally in both northbound and southbound directions. The study concludes that Florida’s deregulation experience suggests positive implications for the Northeast, particularly for Maine. The removal of entry barriers and rate controls led to market efficiencies that benefited shippers, including those in rural areas, without causing service abandonment. While in-state carriers faced increased competition from interstate entrants, the overall effect on service quality and cost was favorable. The authors argue that the resilience of the transportation market absorbed the shock of deregulation, mitigating fears of chaotic market conditions or exorbitant rates for small communities.

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• regulatory evaluation