such as those involving a review of the commodity classification system and the establishment of standards commensurate with the rule of ratemaking contained in section 13 of the 1980 Act. Or the 1.c.c. action challenged last year before this Committee continues to move through the various stages of court review, such as review of the final rules for owner-operator applications to haul processed food and the final rules for motor carrier rate bureau operation. In all, the 1.2.c. has remained adament in sticking to its challenged activities of last year, believing it is charged with the responsibility of going beyond Congress' direction in the 1980 Act. Perhaps one of the more flagrant examples of this can be seen in the issuance of a report on March 12, 1982 recommending that there is absolutely no appropriate area requiring the use of written contracts of haul in the transportation of agricultural commodities by owner Operators! Ex Parte No. 410, Report to Congress on Study of Loading and Unloading Practices in the Motor Carrier of Property Industry. Such a recommendation is a direct affront to this Committee and to the Congress which expressed considerable concern over the plight of the owner operator in the exempt transportation section, particularly in the transportation of fresh fruits and vegetables. Inadequate Insurance Requirements Shortly after last year's oversight hearings, the Secretary of Transportation issued regulations allowing the lowest possible insurance limits permitted by the provisions of section 30 of the Motor Carrier Act of 1980. Then on May required by the Act, recommended that he be given the authority to continue the lower limits at his discretion in lieu of the higher limits which the Act requires to take effect in July of this year, While ATA is preparing a complete response to the Secretary's report for submission at a later date, these preliminary remarks can be made. ATA strenuously disagreed with the Secretary's implementation of the lower limits of insurance which the Act allows, and we just as strenuously disagree now with his recommendation that he be given authority to keep the lower insurance limits beyond the two-year period permitted by the Act. The Secretary of Transportation has failed to consider the rising costs of accidents in terms of loss of life, limb and property and the fact that the public has a right to a full measure of reimbursement for such losses. The trucking industry maintains that the higher limits established by the Congress are proper in view of the constantly increasing costs of motor carrier accidents, the right of the public to adequate financial protection and the need for equity among motor carriers in shouldering their business expenses and responsibilities. The Secretary appears to be primarily concerned with the financial impact on some carriers that are not properly insured. More importantly, we would point out, is the Congressional objective in enacting section 30 i.e., to provide a safety incentive for motor carriers by establishing high insurance limits. That objective is as valid today as it was in 1980. Despite implications to the contrary by some members of the insurance industry, it is a fact that carriers with the best safety records obtain the best insurance rates thus making stringent insurance requirements a real incentive for safety. We do agree with the Secretary that the insurance requirements should be equally applicable to all motor carriers, both foreign and domestic, private and for-hire, interstate and intra-state. The recommendations contained in the Secretary's report go partially in that direction by proposing extension of the insurance provisions to certain private carrier operations not now covered, and to operations of foreign motor carriers. In our complete response, ATA will recommend other revisions to the Act so that the requirements will be equitable for all motor carriers. APPENDIX II AMERICAN TRUCKING ASSOCIATIONS, INC. Washington, D.C. Analysis of Motor Carriers That Have Gone Out-of-Business Since Mid-1980 This latest analysis finds that 155* ICC regulated motor carriers have now apparently closed their doors and gone out-of-business. These firms -- which provided motor carrier service in all states and the District of Columbia with the exception of Hawaii represented an estimated $775 million in revenues based on the latest available reports. On these revenues, the 155 firme lost approximately $33 million for an average operating ratio of 104.3. The demise of these carriers represented the loss of their jobs for some 18,596 trucking employees. In addition to these motor carriers, another 47* ICC regulated firms are curreatly experiencing financial difficulties ranging from voluntary curtailment of service to reorganization under Chapter 11 of the Federal Bankruptcy laws. These 47 companies, in the latest available year, represented nearly $1.2 billion in operating revenues. They also provide employment for 22,166 persons. Thus, known firms which have permanently left the motor carrier industry plus other similar firms now experiencing financial difficulties severe enough to at least require service curtailment -- Row total 202 motor carriers at the present time. These regulated motor carriers represent nearly $2 billion in annual revenues and almost 40,800 jobs. Missing from this tabulation are, as Boted earlier, a substantial number of small newly formed motor carriers which vent out-of-business shortly after they were organized. The analysis presented here embraces only companies which had an established "presence" in the trucking industry. Not incorporated into this update are 32 additional carriers 27 definitely out of business plus 5 in Chapter 11 or with reduced service. The number of out of business are now 183 while those in financial difficulty are 51, totalling 234. These additional carriers are included on the attached listing of carriers by name. The impact now stands at revenues well over $2 billion and over 42,000 jobs. From TABLE I, it may be seen that all but 9 states and District of Columbia lost locally domiciled carriers. Basically, only the more sparsely populated states were "spared". New Jersey suffered the greatest loss (13 carriers), followed by Indiana (12). Ten states accounted for 79 closings -- over half of the total. On a regional basis, the Mid-West appears to have suffered the greatest aumber of closings (54), followed by the Mid-Atlantic and Southeast areas with 35 and 32, respectively. TABLE I ICC Carriers Reported Out-of-Business Since Mid-1980 By State of Domicile Alabama Montana 2 13 (1) 4 6 (8) 2 1 6 (10) 4 1 7 (5) 6 (9) 9 (3) 6 (7) |
