|“Motor carriers unit gets underway” (LC)|
Until 1935, motor carrier regulation was the province of the states. By the 1920s, most already had “public utility commissions” that regulated railroads; water, gas, and electric companies; and other “businesses affected with a public interest.” Perhaps for that reason, as a scholar wrote, it was ‘but natural” that these commissions would regulate motor carriers as well. Still, motor transport companies differed from railroads in important respects, including especially their much lower fixed costs. Trucks operated on publicly owned roads; railroads had to pay for their rights of way and lay their own tracks. Also, trucks were much less expensive than locomotives and train cars. Thus, barriers to entering the motor carrier industry were far lower than the railroad industry. If the core mission of railroad regulation had been to ensure that railroads allocated their fixed costs to shippers fairly; the core mission of motor carrier regulation was to limit competition, thereby making, it was said, the transportation industry more stable and safe.
The foundation for motor carrier regulation was the “certificate of convenience and necessity,” issued by a commission not as a property interest but a revocable license to serve the public for a fixed period of time. Commercial motor carriers could not operate without one. To get one they had to show that the public needed their services and that they had the financial wherewithal to meet that need. Motor carriers also had to abide by “tariffs” set by the commission. These schedules fixed minimum, maximum or actual charges for the transport various classes of goods. The commissions also issued a host of safety regulations and oversaw the mergers, issuance of securities, and other financial actions of regulated companies. Disputes could arise when commissions denied applicants certificates or revoked them for malfeasance, which were quasi-adjudicative acts. They could also arise in rate-setting, a quasi-legislative act.