From 1950 until September, 1980 I was employed in a regulated transportation environment.  Then the Staggers Rail Act became law, followed by the Motor Carrier Act.  The remainder of my career, from 1980 until 1993, was in the deregulated field.  I learned something about the advantages and shortcomings of each. 

I ask the question “has deregulation really worked?”  As we approach a quarter of a century since its inception, I say it hasn’t.  Before you laugh, hear me out.  Remember the uproar Bud Adams caused when he said that Houston needed two stadiums, one for football and one for baseball?  That was just before he was run out of town.  He had hardly cleared the city limits, before the Mayor began the movement to build two new stadiums!!  The point is, what sounds ridiculous is not always so.

The recent Bayport dispute is an example of one of the shortcomings of deregulation.  Prior to the Staggers Rail Act, Bayport producers were competitive.  Their freight rates were Houston rates, plus a differential to recoup additional cost such as intra and inter-terminal switching.  Even though Bayport was served by only one carrier, the law required it to have equitable rates. The day deregulation became law all that disappeared.  Overnight, Bayport and thousands of other shippers became captive and non- competitive.  There is no better example of the captive shipper’s problems than Bayport.  Exorbitant rates are assessed.  Sadly, the Surface Transportation Board, or whoever is supposed to be watching the store, has never understood, or either has ignored, the problems of captive shippers.  In the regulated environment, the recent Bayport situation did not exist.  Bayport producers have been forced to pay millions of dollars in excessive freight rates; not to mention lost business and possibly lost jobs.  

All shippers used to know their competitor’s rates.  Secret deals could not be made that provided advantages to one shipper over another shipper.  As an example, all producers of ethylene glycol on the Gulf Coast from North Seadrift, TX to Plaquemine, LA shipped on competitive rates.  The law required rates to be published in tariffs.  If a rate discrepancy was discovered, by law the carrier(s) had to adjust the rate. Deregulation did away with that.  Freight rate tariffs became obsolete.  The shippers are at the mercy of the carriers.  A shipper may think they have competitive rates, or an advantage, but they can’t be sure.  Shippers have no way of knowing who is getting the mine or who is getting the shaft.  One thing they can be sure of, they are not paying the lowest rates.