STB REVOKES MOTOR CARRIER BUREAUS AUTHORITY

In an historic decision the Surface Transportation Board (STB) today announced that it was terminating its approval granting antitrust immunity for the agreements of all motor carrier freight bureaus to operate, including the antitrust immunity pertaining to the agreement of the National Classification Committee (NCC). The NCC, which is comprised of motor carrier members, establishes freight commodities classifications.

Antitrust immunity granted by the Board and its predecessor, the ICC, has permitted motor carriers to enter into agreements to collectively establish rates, classifications, mileage guides, rules and rate adjustments for general application based on industry average carrier costs, without application of antitrust laws.

In its decision the STB said its decision “represents the final step in a process that began more than a quarter century ago of making the motor carrier industry fully competitive”. The STB went on to say that its decision was predicated on the changing market and regulatory conditions which no longer requires protection of the motor carrier industry as was necessary in the past. In ending all outstanding motor carrier bureau agreements, the STB noted that termination of the bureau’s antitrust immunity “has now become necessary and appropriate to protect the public interest”. Finally, the Board said that its action fulfills the agency’s responsibility “to encourage fair competition and reasonable rate by motor carriers”.

The appendix following the STB’s decision cited concerns by the League and other groups, including suggestions for alternative measures that the Board could consider, including proposals that would have permitted the bureaus to submit regular financial and membership reports to permit better monitoring of their activities.

However in the Board’s view these alternatives did not go far enough in off-setting what it believed was not necessary and concluded that it was unwise to attempt to micro-manage the process solely to protect carriers in a largely deregulated industry from the antitrust laws that apply to other industries. Therefore, the Board reached the decision to simply terminate the motor carrier bureaus’ agreements. The Board noted that antitrust immunity is not necessary to obtain benefits that may flow from certain bureau activities, such as the classification system. The Board cited the comments of the Department of Justice in concluding that the classification process can be reformed to comply with the antitrust laws, and that DOJ was willing to assist in that regard.

The decision comes into effect in 120 days.