I realize that beer is way more interesting than trucking, but someone has to deliver all that hoppy goodness. And thanks to Jimmy Carter, we have a much less regulated trucking industry as well. Before Carter signed that deregulation into law, trucking companies were not only exempt from antitrust laws which created a severely anticompetitive industry, but faced bizarre and apparently abstract commodity restrictions and even stranger routing policies which were byzantine at best. For instance:
In some instances, carriers are required to take an indirect route or travel through a designated “gateway city” to reach their destination. For example:
—Denver, Colorado and Albuquerque, New Mexico, are connected to each other via Interstate 25, a distance of 442 miles. Garrett Freight Lines is permitted to haul freight from Denver to Albuquerque—but only if it goes by way of Salt Lake City, a distance of 730 miles.
—In 1974, during the height of the energy crisis, Consolidated Freightways was denied a request to travel directly between Minneapolis-St. Paul and Dallas. The carrier’s route authority required it to travel 37% extra miles on trips between the two points. Despite the company’s desire to eliminate excessive mileage and save fuel, the ICC denied the request because the new service would harm carriers already serving the route.
Circuitous routings, like regulations which require trucks to travel empty, waste precious fuel and increase costs and prices.
Carter’s deregulation was significant:
The legislation I am proposing provides that:
—All backhaul restrictions are removed immediately.
—All prohibitions on making intermediate stops between authorized points are removed immediately.
—All route restrictions, including requirements that a carrier take a circuitous route or pass through a designated gateway city, must be removed no later than December 31, 1981.
—All restrictions limiting the types of commodities a carrier may haul must be removed no later than December 31, 1982.
—All other restrictions must be removed no later than December 31, 1983.
—The ICC is directed to adopt liberal standards and expedited procedures for carrier petitions for removal of individual restrictions prior to the statutory deadlines. Opponents to carriers’ petitions have the burden of proof to show why a restriction should not be removed.
—The ICC is directed to develop a program allowing existing carriers to increase each year their operating authority by a limited amount without ICC approval. The ICC program shall emphasize increased opportunities to serve small towns.
Interestingly, Carter coupled these deregulations with improved safety standards and increased penalties for safety violations. Commenters in the beer thread pointed out that there are different kinds of deregulation. Economic regulations are not the same as environmental or safety regulations even if those can have economic impacts. I think this is important to keep in mind. Similarly, a government can have very little economic regulation and still provide a generous welfare apparatus. If you glance over at the Heritage Foundation’s Index of Economic Freedom, you’ll notice that plenty of countries with generous safety nets and high tax rates are nonetheless very economically liberal. These are not mutually exclusive concepts.
Carter also began deregulation of other freight and transportation industries, including rail and airline deregulation. Reagan is often credited for getting Americans on the deregulation bandwagon, but it was Carter who got the ball rolling in a very significant way.