Predatory Pricing and Antitrust Enforcement in the Trucking Industry

GAO discussed predatory pricing and antitrust enforcement in the trucking industry. GAO found that, in 1980, Congress adopted a new more pro-competitive approach to the regulation of the trucking industry. Despite the fact that the Motor Carrier Act clearly prohibited predatory pricing, carriers continued to raise concerns about predatory pricing. Some carriers were concerned that, at the time that the act was being considered, large carriers would use their new pricing freedom to set prices below cost so as to drive smaller trucking companies out of business. GAO found that there was a substantial amount of discount pricing but no conclusive evidence relating to the existence of predatory pricing. Some carriers set prices below cost either inadvertently, as a promotional device, or to secure possible spillover benefits from winning a large shipping account. GAO found that all U.S. regions have experienced some increase in the market shares of the largest firms in the trucking industry since 1980. This increase in concentration may reduce competition in the industry, although it may also increase efficiency. The concentration levels in the less-than-truckload trucking industry are about the same as those in American manufacturing generally. GAO found that there were no court cases in which predatory pricing was alleged in the trucking industry in recent years; however, there were two formal complaints of predatory pricing which the Interstate Commerce Commission dismissed for lack of evidence.