Texas Trucking Regulation in Voters' Hands
IF Texas consumers are tired of the way the state's trucking industry is regulated, they will have two chances next fall to change the system.
Deregulation advocates claim that the current system subjects Texans to a high-priced monopoly that makes consumer goods more expensive. The trucking industry says the system protects a vital state industry and high safety standards while maintaining service and competitive prices.
Observers suspect few Texans know or care that intrastate trucking is regulated by the Texas Railroad Commission (RRC), a three-member panel whose members are among the most powerful officials in the state. The commission decides who can enter the trucking business, what territory they can serve, and how much they must charge.
``You don't get a public outcry without a lot of education,'' says Lindsey Dingmore, an aide to commissioner Barry Williamson. Mr. Williamson is the lone Republican and advocate of trucking reform on the RRC. He is also the only one not facing reelection this year.
Typically, one commissioner is elected every two years to a six-year term. This year, RRC chairman James Nugent (D) will defend his job against GOP challenger Charles Matthews. A special election to fill a vacancy pits Carole Rylander (R) against interim appointee Mary Nabers (D). If voters send a second Republican to join Williamson at the RRC, what will happen to trucking regulation? ``It'll go away,'' says Mr. Matthews. ``Texans have paid too much, too long.''
Adds Mrs. Rylander: ``It is my No. 1 issue.''
Williamson says a reform-minded RRC has the latitude within existing law to effect a ``drastic'' deregulation of intrastate trucking within two months. The commissioners could allow much larger deviations than at present from the prices they set. And they could allow more companies to get into the business.
Now, new applicants must prove not just that they are ``ready, willing, and able'' to get into the trucking business, but that ``public necessity and convenience'' would be served if they did. At hearings, companies who already have approval are allowed to protest the applications. Almost none are approved.
Upon election to the RRC two years ago, Williamson says he was appalled that no one representing the public's interest presents testimony when trucking companies ask for rate hikes. ``We're doing economic regulation with our eyes closed,'' he says. He has asked an RRC rate analyst to act as public advocate at future hearings.
Rylander says she became concerned about trucking deregulation years ago, when she read that the current system made it cheaper for a Dallas store to ship blue jeans from Taiwan than from El Paso. The example is actually not accurate, however. Free-market advocates first floated the blue jeans comparison as a hypothetical case in 1987. Soon it was reported as fact in a Wall Street Journal editorial and deregulation advocates have circulated it widely ever since.
But those in favor of deregulation cite other examples: A fire hydrant costs $609 to ship from Beaumont to Texarkana, Texas, but $297 to Texarkana, Ark. As a result, companies that ship products in Texas reportedly locate warehouses just across state lines to take advantage of cheaper interstate rates.
Federal Express, for example, will build a $300 million facility employing 2,500 workers at the Alliance Airport north of Ft. Worth. But in making the announcement, Federal Express Chairman Frederick Smith said the facility would have gone to Kansas or Louisiana if the Texas attorney general had not ruled that the company is outside the regulatory authority of the RRC.
Economist Ray Perryman says when it comes to scaring businesses away from Texas, the regulated trucking environment is second only to the huge damages that Texas juries award to plaintiffs.
Hampton Rogers, a spokesman for the pro-regulation Texas Motor Transportation Association, says throwing the business open to competition will allow well-financed interstate companies to ``skim the cream off of this market.'' He says one Texan in 11 is employed in some fashion by the trucking industry. ``Deregulation would be a disaster for the [Texas] economy.''