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Transportation experts say few government actions have reshaped modern America more than the transportation deregulation laws signed by President Jimmy Carter in the late 1970s.
The changes transformed airlines, trucking and freight rail, helping create the transportation network that powers today’s economy.
“We’re chopping down the thicket of unnecessary federal regulations, by which government interferes in our personal lives and in our business,” Carter said in a speech to Congress. “There is a limit to the role and function of government.”
Carter pushed through Congress three major pieces of legislation that dramatically altered transportation.
The Airline Deregulation Act of 1978 phased out the Civil Aeronautics Board, which controlled routes and fares and allowed airlines to compete freely. The law helped create the modern hub-and-spoke system and opened the door for low-cost carriers, fundamentally changing how Americans travel.
The 1980 Motor Carrier Act deregulated trucking, opening a highly regulated industry to greater competition. The legislation encouraged the growth of thousands of smaller and specialized trucking companies, laying the groundwork for the vast freight network that supports today’s e-commerce economy.
DePaul University transportation professor Joe Schwieterman said innovation unleashed nearly 50 years ago continues to fuel economic growth.
“Deregulation transformed stodgy industries into highly innovative and customer-driven enterprises,” Schwieterman said. “It ushered in an era of fast-paced transportation that completely changed how we live.”
Freight rail was transformed by the Staggers Rail Act of 1980, which gave railroads greater freedom to price services based on market demand and negotiate confidential contracts with customers. The law helped revive an industry that had been struggling financially for decades.
Schwieterman said while the economic benefits are clear, the transition brought significant disruptions. Companies that lacked the resources or expertise to compete often disappeared. Some trucking industry veterans argue drivers no longer enjoy the respect they did decades ago and contend that safety standards have eroded. Today, the Department of Transportation is conducting a highly visible enforcement effort targeting unsafe carriers.
In the freight rail industry, consolidation has reduced the number of major carriers, and federal regulators are reviewing a proposed $85 billion merger between Union Pacific and Norfolk Southern that would create the nation’s first coast-to-coast railroad. Critics argue the deal could reduce competition.
Small independent trucking companies faced intense price wars, while many rural communities lost air service as airlines concentrated on their most profitable routes.
Even some Democratic leaders embraced the push for deregulation. California Gov. Jerry Brown argued that government control had limits.
“The idea that government is omnipotent is completely absurd,” Brown said during an appearance on the television program “Firing Line.”
Today, the Department of Transportation focuses primarily on safety, compliance and infrastructure rather than economic regulation.
“It’s just a different time,” Schwieterman said, noting that Carter and later President Ronald Reagan likely had little idea how profoundly deregulation would reshape transportation and the broader economy.
“Deregulation set off a tidal wave of innovation that lowered transportation costs and spurred enormous economic growth,” Schwieterman said.
He said Carter likely could not have foreseen today’s e-commerce economy, but the transportation network that emerged from deregulation helped make companies such as Amazon possible.
In some transportation circles, Carter has even earned an unofficial nickname: the “Father of Amazon.”
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