Reed–Bulwinkle, Deregulation, and the Myth of the “Golden Age” of Trucking

Recent commentary has revived the as evidence that collective pricing, mandatory minimum freight rates, and coordinated industry standards are historically justified solutions to modern trucking market volatility. This article examines the Reed–Bulwinkle Act in its full historical, institutional, and economic context, including its legislative sponsors, regulatory mechanics, operational consequences, and eventual repudiation through the . The evidence demonstrates that Reed–Bulwinkle did not create an efficient or equitable trucking system, but rather entrenched incumbent power, suppressed competition, imposed operational inefficiencies, and required heavy federal oversight to function. Reintroducing its logic today—absent statutory authority—would primarily benefit mega-carriers while exposing smaller operators to antitrust risk.

1. What the Reed–Bulwinkle Act Actually Authorized

The Reed–Bulwinkle Act of 1948 did not create collective pricing in trucking; it legalized an existing practice that had already drawn antitrust scrutiny. Prior to 1948, railroads and motor carriers coordinated rates through regional rate bureaus, activity that plainly violated the Sherman and Clayton Acts. Reed–Bulwinkle resolved this conflict by granting conditional antitrust immunity, but only within a tightly controlled regulatory framework administered by the Interstate Commerce Commission (ICC).

Under the Act:

• Collective ratemaking was permitted only through ICC-approved agreements

• All rates had to be filed, published, and publicly available

• Competing carriers and shippers could formally protest rates

• The ICC retained authority to determine rate reasonableness and public interest

As Moore (2024) explains, Congress exempted carriers from antitrust law only under government supervision, not by endorsing unrestricted price coordination .

The Department of Justice and Federal Trade Commission later reaffirmed that Reed–Bulwinkle immunized collective ratemaking only when conducted pursuant to ICC-approved agreements .

Critical point: Reed–Bulwinkle legalized regulated coordination, not private or advocacy-driven pricing schemes.

2. Legislative Authors and Institutional Incentives

The Act’s structure reflects the institutional priorities of its sponsors rather than a neutral assessment of market efficiency.

The principal sponsors were:

• (Republican, Kansas)

• (Democrat, North Carolina)

Senator Reed represented a rail-dependent agricultural state whose economy favored rate stability over competition. Railroads in the postwar period faced growing competition from trucking and pressed for coordinated pricing to protect traffic and margins. Reed’s policy preferences closely mirrored ICC doctrine that transportation markets were too fragile for open competition.

Representative Bulwinkle was a senior member of the House Interstate and Foreign Commerce Committee, the body with direct oversight of the ICC. His committee position placed him in sustained contact with major rail carriers, regulated motor carriers, and ICC leadership. These stakeholders supported Reed–Bulwinkle as a means to halt Department of Justice antitrust actions, preserve rate bureaus, and maintain entry barriers that protected incumbents.

The Act thus reflected regulatory capture, not a labor- or small-carrier-centered reform agenda.

3. Who Benefited—and Who Did Not

Although often described as producing “professionalism” and “fairness,” the Reed–Bulwinkle regime distributed its benefits unevenly.

Beneficiaries

• Large railroads

• Established motor carriers

• Rate bureaus dominated by incumbents

• The ICC itself, through expanded authority

Those Disadvantaged

• New entrants

• Small carriers and owner-operators

• Consumers and small shippers

By the 1970s, operating authority for certain commodities and routes had become a scarce, tradable asset, selling for hundreds of thousands of dollars. Entry into many markets required purchasing authority from incumbents rather than competing on service or efficiency . Small carriers did not meaningfully influence rate bureau decisions; they either accepted bureau rates or exited the market.

4. Operational Inefficiency and Regulatory Circuity

Beyond pricing effects, the regulated era imposed severe operational inefficiencies, most notably regulatory circuity—the legal requirement to take longer, indirect routes due to operating authority restrictions.

Under ICC regulation, carriers were authorized to haul:

• Specific commodities

• Between specific origin–destination pairs

• Along narrowly defined routes

If a carrier lacked authority for a direct route, it was legally prohibited from using it—even when a shorter, safer, or more efficient route existed.

Moore (2024) documents cases in which a carrier authorized to haul freight from Cleveland to Buffalo, and another authorized from Buffalo to Pittsburgh, was required to route freight through Buffalo, despite the existence of a much shorter Cleveland–Pittsburgh route .

The consequences included:

• Hundreds of unnecessary miles

• Increased fuel consumption

• Longer transit times

• Higher costs

• Increased driver fatigue and safety risk

Additionally, carriers often lacked authority to haul freight on return trips, resulting in widespread empty backhauls. These inefficiencies were structural features of the regulatory system, not anomalies.

5. Why Congress Rejected the Model in 1980

By the late 1970s, extensive economic research showed that trucking regulation:

• Increased rates by 20–50%

• Reduced efficiency and innovation

• Protected incumbents at the expense of consumers

Congress responded with the Motor Carrier Act of 1980, which:

• Limited ICC economic authority

• Encouraged independent rate setting

• Dismantled collective ratemaking structures

Following deregulation:

• Real freight rates fell approximately 25%

• Entry increased dramatically

• Service quality improved

Congress did not abandon Reed–Bulwinkle inadvertently; it explicitly rejected its assumptions.

6. Why Modern Revival Arguments Fail

Contemporary claims that Reed–Bulwinkle proves trucking “cannot survive under antitrust law” rest on several errors:

1. Reed–Bulwinkle did not impose fixed or mandatory minimum rates

2. Its antitrust exemption depended on continuous federal enforcement

3. Higher driver wages reflected union density and entry restriction, not rate coordination

4. Modern market failures stem from consolidation and enforcement gaps, not deregulation alone

5. Private mandatory minimum rates today would constitute illegal horizontal price fixing

Reed–Bulwinkle does not provide precedent for advocacy-led pricing schemes.

7. Why Reviving Reed–Bulwinkle Would Empower Mega-Carriers Today

The modern trucking market is far more consolidated and vertically integrated than in 1948. Reintroducing collective ratemaking logic would:

• Entrench mega-carriers and broker-carriers

• Legitimize coordinated pricing by dominant firms

• Accelerate small-carrier exit

• Increase antitrust exposure

Historically, Reed–Bulwinkle strengthened incumbents. There is no evidence it would do otherwise now.

Conclusion

The Reed–Bulwinkle Act was a product of its time, shaped by the institutional incentives of its sponsors and a regulatory philosophy that prioritized stability for large carriers over competition and efficiency. Its operational inefficiencies, entry barriers, and incumbent favoritism ultimately led Congress to dismantle the framework in 1980. Invoking Reed–Bulwinkle to justify modern mandatory freight rates misunderstands both the law and its outcomes. Effective reform today lies in transparency, enforcement, and competitive neutrality—not resurrecting an antitrust exception that historically concentrated power.

References (APA Style)

Moore, T. G. (2024). Trucking deregulation. Econlib: The Library of Economics and Liberty.

U.S. Department of Justice & Federal Trade Commission. (2007). Trucking deregulation in the United States: Submission to the Ibero-American Competition Forum.

Viscusi, W. K., Harrington, J. E., & Vernon, J. M. (2005). Economics of regulation and antitrust (4th ed.). MIT Press.