End of the line for the ICC: a few diminished functions of the former Interstate Commerce Commission survive - elsewhere

Nation's Business, March, 1996 by James Worsham

A few diminished functions of the former Interstate Commerce Commission survive--elsewhere.

While Republicans and Democrats were bickering and haggling over how much to cut the budget and how big government should be, they quietly laid to rest the nation's oldest regulatory agency.

Dead as of Dec. 31, 1995, is the 108-year-old Interstate Commerce Commission, once a powerful body that tightly controlled railroads initially and then trucking as well. The two industries were the lifelines of commerce as the nation developed regional interdependency during its expansion south and west over the past century.

Much of the ICC's vast powers had been stripped away in deregulation legislation in the early 1980s, however, leaving the commission with little of its old clout at the end. Most of what was left now rests with a new Surface Transportation Board (STB), a semi-independent agency within the Department of Transportation (DOT), or with the DOT itself.

"I'm hopeful this will be a success story about reinvention and reforming government and serving people better," says Linda J. Morgan, the final ICC chairman and the first STB chairman. The ICC functions that have been retained, she adds, are those "that most people feel are the minimum necessary."

Most of the ICC regulatory powers the STB has taken over, she says, are those relating to railroads, which will still be more heavily regulated than trucking. While the STB retains authority to adjudicate both rail and trucking disputes, Morgan says, the DOT has taken over various programs and the licensing and registration of truckers.

The bill to eliminate the ICC was signed by President Clinton on Dec. 30 after it moved through Congress with broad, bipartisan support. Concerns over job-loss protections for rail workers slowed the measure late in the year, but provisions acceptable to all sides were eventually agreed on.

"It's a way to cut some waste out of government," says Michael S. Starnes, chairman of M.S. Carriers, Inc., a nation-wide trucking firm based in Memphis, Tenn. "And I don't think there's going to be any negative fallout for trucking firms or shippers."

The legislation went almost without notice as Republican plans to dismantle several Cabinet departments, such as Commerce or Education, stalled in Congress.

But the ICC was a special target. Once one of the most powerful federal agencies, the panel over the years regulated not only railroads and trucking but also, at times, water transportation, oil pipelines, and household movers. It decided which carriers could operate, where they could operate, and how much they could charge.

What was an agency with 2,000 employees and a budget of $82 million in 1980-81 had shrunk to 400 employees and $40 million by last Oct. 1. Now, the STB has $12 million a year and 126 employees, although 61 other former ICC workers went to the DOT.

Here's a look at the post-ICC era:

Railroads: The STB has regulatory authority over maximum rates charged to "captive shippers" (those with only one available carrier) and over rail construction and abandonment as well as mergers and acquisitions. Railroads can set their own rates but must have copies available for shippers.

Also, since rail workers may not strike or enter into labor contracts, the ICC law specifies pay and benefits for workers who lose their jobs because of mergers.

Still largely intact is the major thrust of the 1980 Staggers Raft Act, the legislation that deregulated the railroads.

Trucking: Little regulation remained last year. Now, companies must still register with the DOT and show proof of insurance, but they don't have to file their rates with the government. "It won't be a dramatic change," says Ken Siegel, deputy general counsel for the American Trucking Associations.

Household Movers: The industry will offer a dispute-resolution process, and the DOT will oversee it.

Bus Lines: Mergers and certain route requirements are subject to STB review.

NOW that the ICC is gone, so is its com sumer-protection role for shippers. "There is none," says William J. Augello, executive director of the Transportation Claims and Prevention Council, Inc., a nonprofit group in Huntington, N.Y. "It is caveat emptor for shippers" in dealing with trucking firms, he says.

Augello urges shippers to examine rate schedules and contract terms. In killing the ICC, he says, Congress "abandoned the small-business man, who usually lacks training in transportation and merely calls a carrier for a rate and a pick-up."

Morgan also warns shippers to be more alert when dealing with carriers, because the ICC won't be there for help later: "You must work directly with your carrier, and make sure everything is written down."

Trucking-company chairman Starnes agrees and urges shippers to "be careful" in choosing carriers. But he says a deregulated, more competitive market for shippers is better and, since 1980, has helped firms like his prosper. As for the ICC, he adds, "We're not going to miss it."