State OKs New Rules for Trucking Industry

The California Public Utilities Commission on Wednesday adopted a wide-ranging new approach to the regulation of the state’s trucking industry that is designed to improve highway safety and industry stability while promoting competition.

For the most part, the commission increased regulation of the industry, which it began to deregulate in 1979. But a few of the policies adopted Wednesday actually loosened some trucking industry regulations.

Seeks Balance

In its ruling, the commission attempted to strike a balance between those who believe deregulation has fostered intense competition that has driven some carriers out of business and reduced highway safety and others who believe that deregulation is healthy for the industry, has not increased the number of truck accidents and has saved consumers $500 million a year, said Vic Weisser, chief of the PUC’s transportation division.

Among other things, the commission voted to establish base rates for carriers at whatever rates they are charging on Oct. 1.

In 1980, the commission abandoned a system of minimum rates and established “transition tariffs,” but it allowed carriers to raise or lower rates much more easily than before.

Under the new policy, carriers must justify rate changes based on their costs rather than by using the “me too” approach, which the commission adopted in 1980 and which allowed a carrier to attach itself to another carrier’s rate change without justifying the change on its own.

Some Flexibility Granted

In addition, many carriers whose rates are below the transition tariffs will be ordered to raise their rates 10% on May 5.

But truck companies were granted some flexibility through a limited “rate window,” which allows them to adjust their rates up or down by as much as 5% every three months without approval from the PUC.

Any other rate changes must by justified by cost.

The commission also exempted from rate regulation contracts of 30 days or more between profitable carriers and shippers for the use of dedicated equipment--that is, the exclusive use of certain trucks and drivers--during the contract.

Base rates will be adjusted annually by a truck freight cost index system.