Summary: In response to a congressional request, GAO testified on the effects of regulatory reform on unemployment in the trucking industry. The Motor Carrier Act substantially reduced Government control of trucking. The Act was designed to make entrance into the industry easier for new firms and stimulate price competition. A GAO analysis indicated that: (1) poor economic conditions, not regulatory reform, have been the likely cause of high unemployment in the trucking industry; (2) the Act brought about increased competition in the trucking industry and resulted in an overall increase in the number of trucking firms in the marketplace; and (3) increased industry competition accelerated the decline of Teamsters Union representation in the trucking industry. While the overall number of regulated trucking firms has increased, a number of trucking businesses have failed. Industry sources generally attribute the causes of failure to a combination of more entrants into the industry, a declining economy, and price competition. Teamster officials stated that the Act's eased entry provisions have caused established general freight common carriers to lose a substantial share of the market to private companies and independent owner-operators. Union officials said that many private companies are starting, or planning to start, their own trucking lines and this will greatly reduce established trucking firms' business.
