Discuss the nature of the competition in the motor carrier industry since the Motor Carrier Act of 1980

Answer 1

Since the Motor Carrier Act of 1980 the motor carrier industry has become increasingly competitive. Deregulation removed the controls and restrictions on rate levels and allowed more carriers entry into the markets. That increase in carriers (supply) has had strong influence on reductions in rates.

The reduction in for hire rates caused many companies that had private fleets to reconsider if such fleets were still economical. Companies such as Kimberly Clark, who had historically had private fleets, decided to outsource their transportation service and utilize for-hire carrier service.

The companies that provided for hire services many often had as good or better service and flexibility at a more economical costs toe the shipper. From the corporate perspective private fleets were considered a burden on investment and during the 90s many firms outsourced their transportation service..

During the 21st century, increasing rates and driver shortages led firms to reconsider their private fleet. This was particularly true of those companies that had predictable routings, potential for back haul and demanding customers.

Many experts anticipate a resurgence in private fleets in the future.