Transportation Deregulation: US Government And Regulation Of Transportation
US GOVERNMENT & TRANSPORTATION DEREGULATION 1
US Government & Transportation Deregulation
Galang Pham
Embry Riddle
US GOVERNMENT & TRANSPORTATION DEREGULATION 2
The United States Government played a critical role in the regulation and deregulation of transportation. The US Government first played a role by establishing the Interstate Commerce Commission (ICC) to oversee the railroad industry in 1887. This led to a century of surface freight regulation. The trucking industry was also brought under control of the ICC in 1935. They implemented the Motor Carrier Act which required new truckers to seek certifications from the ICC. This made it difficult for new trucking companies …show more content…
Regulation of the railroad industry created price competition between railroads by discounting, price cutting, and rebating. The Transportation Act of 1920 gave the ICC complete authority over the railroad industry. The railroad industry was still not as profitable even at this point. The ICC kept a firm grip over the railroad industry for three quarters of the twentieth century. During this time regulations restricted rates and encouraged price collision. This led to many railroads facing bankruptcy and led to the US Government eventually intervening. During the last quarter of the twentieth century major changes to regulation were made by the US Government. In 1976 Congress passed the Railroad Revitalization and Regulatory Reform act. In 1980 the Motor Carrier Act was enacted which limited the ICC’s authority over trucking. Finally in 1995, the ICC termination act was passed. This act established the Surface Transportation Board (STB) which oversaw the railroad industry. The act also transferred truck licensing and instated state …show more content…
The Airline industry was incepted in the 1930’s and was heavily regulated by the Civil Aeronautics Board. The CAB determined which routes they could fly, ticket rates, and when they could schedule flights. Airline consumers were severely limited by routes and schedules and many were locked out by high fares. During this time the Airline Industry continued to operate and grow, but did not generate impressive profits. In 1978 the US Government began the process of deregulating the Airlines. The Airline Deregulation Act was approved by Congress on October 24, 1978. As a result, Airlines were able to fly to new destinations, flown more frequently, and dramatically lowered costs. Airlines also innovated new services such as overnight and same day shipping, and determined what consumer in flight amenities to offer. One estimate by the Air Transport Association suggests that ticket prices today are 44.9 percent lower in real terms than they were in 1978. (Brennan
US Government & Transportation Deregulation
Galang Pham
Embry Riddle
US GOVERNMENT & TRANSPORTATION DEREGULATION 2
The United States Government played a critical role in the regulation and deregulation of transportation. The US Government first played a role by establishing the Interstate Commerce Commission (ICC) to oversee the railroad industry in 1887. This led to a century of surface freight regulation. The trucking industry was also brought under control of the ICC in 1935. They implemented the Motor Carrier Act which required new truckers to seek certifications from the ICC. This made it difficult for new trucking companies …show more content…
Regulation of the railroad industry created price competition between railroads by discounting, price cutting, and rebating. The Transportation Act of 1920 gave the ICC complete authority over the railroad industry. The railroad industry was still not as profitable even at this point. The ICC kept a firm grip over the railroad industry for three quarters of the twentieth century. During this time regulations restricted rates and encouraged price collision. This led to many railroads facing bankruptcy and led to the US Government eventually intervening. During the last quarter of the twentieth century major changes to regulation were made by the US Government. In 1976 Congress passed the Railroad Revitalization and Regulatory Reform act. In 1980 the Motor Carrier Act was enacted which limited the ICC’s authority over trucking. Finally in 1995, the ICC termination act was passed. This act established the Surface Transportation Board (STB) which oversaw the railroad industry. The act also transferred truck licensing and instated state …show more content…
The Airline industry was incepted in the 1930’s and was heavily regulated by the Civil Aeronautics Board. The CAB determined which routes they could fly, ticket rates, and when they could schedule flights. Airline consumers were severely limited by routes and schedules and many were locked out by high fares. During this time the Airline Industry continued to operate and grow, but did not generate impressive profits. In 1978 the US Government began the process of deregulating the Airlines. The Airline Deregulation Act was approved by Congress on October 24, 1978. As a result, Airlines were able to fly to new destinations, flown more frequently, and dramatically lowered costs. Airlines also innovated new services such as overnight and same day shipping, and determined what consumer in flight amenities to offer. One estimate by the Air Transport Association suggests that ticket prices today are 44.9 percent lower in real terms than they were in 1978. (Brennan