carriers threatened legal action to reverse the sunsetting of
the regulatory system. Also, the usage of class rates may be
convenient for those shippers and carriers having both unregu-
lated intrastate and regulated interstate freight. Indeed,
many carriers may be employing rates published by rate bureaus
in neighboring states or for interstate runs as guideposts for
their intrastate rate policies. The second reason is that in
both states the general freight carriage industry is highly
concentrated. While no exact data exist, it is evident that 80
or perhaps 90 percent of intrastate freight in each state is
hauled by the top 10 or 12 carriers. Taken on a route by route
or area by area basis, it is not uncommon to have virtually all
traffic handled by one, two or three carriers. This industry
structure raises the possibility of tacit or overt collusion.
While no evidence exists of collusion in these markets, the
possibility must be recognized. Moreover with so few firms,
even without collusion, sufficient monopoly power may be pre-
sent to facilitate price discrimination.

 To obviate the preceding problems, what is needed is a
competitively structured, never regulated market. Only here
would a value-of-service rate structure due to price discrimi-
nation be impossible. Therefore, evidence of the existence of
such a structure would indicate cost differentials in the
transport services given for low and high valued cargoes. In
the remainder of this bulletin a study will be described of
such a transport market: the Florida-origin produce and orna-
mentals interstate truck market.




 EMPIRICAL MODEL


 The competitive structure of the industry suggests that
 rates (PT) are likely to correspond closely to costs. There-
 fore, for the empirical analysis, PT is specified as being a
 function of the variables related to costs. This modeling