Two Cheers for Discrimination: Deregulation and Efficiency in the Reform of U.S. Freight Transportation, 1976–1998

Abstract

Nondiscrimination was the bedrock of U.S. transport regulation for nearly a century. The Interstate Commerce Act of 1887, the federal government's first major regulatory initiative, barred “unreasonable discrimination” in rates and service to keep railroads from aiding one businesses or community over another. As regulation developed, similar obligations were imposed on ship lines, truck lines, and air carriers. Most freight transportation companies were forced to operate as “common carriers,” publishing a rate applicable to each commodity and applying that rate to every shipment. Equal treatment of all customers, based strictly on posted prices and terms of service, was widely considered essential to keeping the transportation market “fair.”