JUSTICE STEVENS delivered the opinion of the Court.Trailer-on-flatcar (TOFC or "piggyback") service, a form of mixed train and truck transportation, enables a carrier to transport a trailer and its contents over rail on a flatcar and then to haul the trailer on the highway.  The goods need not be unloaded and reloaded when they move from the rail mode to the truck mode; the shipment remains within the trailer or container during the entire journey.  Various forms of Page 479 U. S. 452 TOFC and container-on-flatcar (COFC) [Footnote 1] service have been offered to the public by railroads, motor carriers, and freight forwarders since the 1930's. [Footnote 2]  These cases concern the extent of the State of Texas' jurisdiction over what is known as "Plan II TOFC/COFC service," which has long been defined as follows:"Plan II (All-Rail):""Door-to-door service performed by the railroad, which moves its own trailers or containers on flatcars under open tariffs usually similar to those of truckers."See American Trucking Assns., Inc. v. Atchison, T. & S. F. R. Co., 387 U. S. 397,  387 U. S. 403 (1967).The ICC's statutory authority includes jurisdiction to grant exemptions from regulation as well as to regulate.  In 1980, Congress enacted the Staggers Rail Act, 94 Stat. 1896, 49 U.S.C. § 10101 et seq., which authorizes the ICC to exempt from state regulation "transportation that is provided by a rail carrier as a part of a continuous intermodal movement."  See § 10505(f).  It is undisputed that the ICC may grant an exemption from regulation to interstate TOFC/COFC transportation provided by a rail carrier.  The question Page 479 U. S. 453 presented is whether the grant of authority to the ICC under § 10505(f) encompasses the motor freight portion of a Plan II TOFC/COFC shipment entirely within the State of Texas.IIn 1981, the Commission adopted a regulation exempting Plan II service from state regulation. [Footnote 3]  The regulation unambiguously covers both the motor portion and the rail portion of Plan II service. [Footnote 4]  In a separate case involving interstate Plan II shipments, the Court of Appeals for the Fifth Circuit upheld the regulation, specifically rejecting an argument that the Commission had no authority to exempt the motor portion of the intermodal service.  It held that "rail-owned truck TOFC/COFC service is transportation that is provided by a rail carrier.'"  American Trucking Assns., Inc. v. ICC, 656 F.2d 1115, 1120 (1981).On September 27, 1982, Missouri-Kansas-Texas Railroad Company, Missouri Pacific Railroad Company, and Southern Pacific Transportation Company (Railroads) petitioned the Railroad Commission of Texas (RCT) to apply the ICC's exemption to their Texas intrastate TOFC/COFC traffic. App. 7-10.  The RCT took the position that it retained the authority to regulate the motor carrier segment of intrastate transportation provided by an interstate rail carrier.  The Staggers Rail Act provides that a state commission may regulate intrastate transportation provided by a rail carrier, but Page 479 U. S. 454 only to the extent that it conforms with the federal Act, and only if the ICC determines that the State's proposed regulatory standards and procedures are consistent with federal standards and procedures. [Footnote 5]  The RCT granted a partial exemption which covered the rail, but not the pre-rail and post-ex-rail, truck service portions of the intrastate TOFC/COFC service.  Id. at 11-12.The Railroads petitioned the ICC under 49 U.S.C. § 11501(c) to review the RCT's decision and to grant the full TOFC/COFC exemption.  The ICC held that the State Commission's assertion of regulatory jurisdiction over "incidental pre-rail and ex-rail over-the-road movements" of Plan II TOFC/COFC service was inconsistent with the federal standards contained in its 1981 regulation. [Footnote 6]  The State of Texas sought review of the ICC's order in the Court of Appeals for the Fifth Circuit.  The Railroads intervened as respondents.  That court reversed, holding that the truck portion of the intrastate movements at issue was not "transportation . . . provided by a rail carrier" within the meaning of § 10505(f), [Footnote 7] Page 479 U. S. 455 but rather was "transportation provided by a motor carrier" within the meaning of § 10521(b)(1). [Footnote 8]  Texas v. United States, 770 F.2d 452 (1985).  The Court of Appeals distinguished American Trucking Assns., Inc. v. ICC, supra, as limited to TOFC/COFC shipments that at some point in their journey crossed a state boundary.  When the service is purely intrastate, the Court of Appeals held, the motor portions of TOFC/COFC service by railroad-owned trucks constitute transportation provided by a motor carrier under § 10521(b)(1), and for that reason are expressly reserved for state regulation.  We granted the petitions for certiorari of the ICC and the Railroads, 476 U.S. 1157 (1986).  We are persuaded that the Court of Appeals erred.IIIt is undisputed that the Commission's power to grant these exemptions from state regulation is coextensive with its own authority to regulate, or not to regulate, these intermodal movements by rail carriers. [Footnote 9]  We therefore focus our Page 479 U. S. 456 review on the extent of the Commission's jurisdiction over the trucking segment of intrastate TOFC/COFC activities.  Since all of the railroads interested in this proceeding are engaged in interstate commerce, the Commission has authority over the intrastate transportation, as well as the interstate transportation, provided by such carriers. [Footnote 10]  All of the elements of the Plan II TOFC/COFC service at issue are provided on equipment owned and operated by a rail carrier over which the ICC has jurisdiction.  Thus, the plain language of § 10505(f) unambiguously supports the ICC's position. [Footnote 11]It is true, of course, that the text of § 10521(b)(1) can be read to support the contrary result, because it is possible to Page 479 U. S. 457 regard the rail carrier as a "motor carrier" during the truck portion of the intermodal movement.  We believe, however, that the correct, and certainly the more natural, reading of the statute is that all of the TOFC/COFC service provided by interstate rail carriers on equipment which they own is "transportation provided by a rail carrier" subject to the jurisdiction of the ICC. [Footnote 12]The position urged by respondents encounters three serious difficulties.  First, it is inconsistent with the agency's historical treatment of Plan II TOFC/COFC service as "provided by a railroad."  In Ex parte 230, Substituted Service Charges and Practices of For-Hire Carriers and Freight Forwarders (Piggyback Service), 322 I.C.C. 301, 304-305, 309-312 (1964), the Commission stated:"Under plan II, the railroad holds out to provide a complete door-to-door service under a single bill of lading.  Neither the shipper nor the consignee intervenes in any way in the overall transportation activities or does anything beyond tendering the shipment to the railroad at origin or at the shipper's loading dock."Id. at 311.  The Commission.recognized that the distinctive element of Plan II service was not the use of trailers or containers to offer door-to-door pickup and delivery service via rail and Page 479 U. S. 458 highway, but rather the identity of the carrier offering this service:"[A]ll three -- rail carrier, motor carrier, and freight forwarder -- are even today providing, through the use of piggyback, services which in physical characteristics are substantially similar.  Any one of the three can offer a transportation service which includes door-to-door pickup and delivery, movement of loaded trailers between a shipper's premises and a rail yard, and line-haul transportation of the loaded trailers by rail.  The railroad does this under its plan II TOFC tariff; the trucker does it under plan I, in which it is encouraged by the railroads . . . and the freight forwarder does it through use of plans III and IV rail tariffs."Id. at 330.  In none of the plans was a rail carrier treated either as a hybrid or as a motor carrier during the truck segment of the intermodal movement.  Presumably, in enacting § 10505, Congress was aware of the Commission's consistent practice of regulating railroads as "rail carriers" even when they performed Plan II intermodal service.Second, the State's interpretation of § 10521(b)(1) would make that section authorize state regulation of TOFC/COFC services in areas where it has already been rejected.  The term "intrastate transportation provided by a motor carrier" must refer either to the intrastate motor portion of any TOFC/COFC movement or to the entire intrastate movement when a portion of it is performed by truck service.  If the term refers only to the motor portion, the State's reading of the statute would preserve the State's power to regulate the intrastate motor portion of an interstate Plan II TOFC/ COFC shipment.  But Texas acknowledges that it has no such power. [Footnote 13]  Alternatively, if the term refers to every intrastate Page 479 U. S. 459 shipment that includes a motor segment, the railroad must be regarded as a "motor carrier" even during the rail portion of the intermodal movement, and the RCT would retain the power to regulate the entire intrastate movement.  Again, Texas does not claim that authority.  We think it clear that the only way to square the words of the statute with those aspects of the ICC's jurisdiction that the State does accept is to hold that the ICC's authority over intrastate transportation provided by an interstate rail carrier encompasses the entire movement, even when it includes a truck segment under Plan II. [Footnote 14]Third, the special statutory authority of the Commission to determine the proper interrelationship of different modes Page 479 U. S. 460 of transportation supports its interpretation of the Staggers Rail Act. [Footnote 15]  The statute was a response to the concern that differing state and federal standards applying to the industry and excessive governmental regulation by both federal and state authorities had contributed to the financial difficulties of major railroads. [Footnote 16]  In its statement of rail transportation policy, Congress unambiguously expressed its interest in allowing free competition, to the maximum extent possible, to govern the financial health of the railroad industry. [Footnote 17]  The importance of that policy is confirmed by the fact that the Page 479 U. S. 461 statement of general transportation policy applicable to all types of carriers, which generally prescribes the impartial regulation of all competing modes of transportation, is introduced by an exception providing that the special policy statement endorsing competition in railroad transportation shall prevail when transportation policy has an impact on rail carriers. [Footnote 18]  Even if the question of the extent to which § 10521(b)(1) restricts the Commission's power under § 10505 in these cases were in doubt, the statutory statement of policy priorities would lead us to agree with the ICC's view that the ambiguity should be resolved in favor of competition, rather than partial state regulation of Plan II TOFC/COFC service.The judgment of the Court of Appeals is reversed.It is so ordered
U.S. Supreme CourtICC v. Texas, 479 U.S. 450 (1987)Interstate Commerce Commission v. TexasNo. 85-1222Argued December 10, 1986Decided January 20, 1987479 U.S. 450SyllabusSince the 1930's, railroads, motor carriers, and freight forwarders have offered both trailer-on-flatcar (TOFC) and container-on-flatcar (COFC) services, forms of mixed train and truck transportation whereby loaded truck trailers or containers to be placed on truck trailers are transported on railroad flatcars and then hauled by trucks on the highways.  A provision of the Staggers Rail Act of 1980, 49 U.S.C. §10505(f), authorizes the Interstate Commerce Commission (ICC) to exempt from state regulation "transportation that is provided by a rail carrier as a part of a continuous intermodal movement."  In 1981, the ICC adopted a regulation exempting from state regulation, and covering both the motor and rail portions of, "Plan II TOFC/COFC service," which involves door-to-door service by a railroad that moves its own trailers or containers on flatcars.  In 1982, petitioner railroad companies petitioned the Texas Railroad Commission to apply the ICC's exemption to Texas intrastate TOFC/COFC traffic.  The State Commission granted a partial exemption covering the rail portion, but not the truck portion, of intrastate Plan II service.  The railroad companies then petitioned for review of that decision by the ICC, which held that the State Commission's assertion of regulatory jurisdiction over the truck portion of Plan II service was inconsistent with the ICC's 1981 regulation.  On review of the ICC's order, the Court of Appeals reversed, holding that the truck portion of the intrastate movements at issue was not "transportation . . . provided by a rail carrier" within the meaning of § 10505(f), but rather was "transportation provided by a motor carrier" within the meaning of 49 U.S.C. § 10521(b)(1), which reserves such intrastate transportation for state regulation.Held:  The grant of authority to the ICC under §10505(f) encompasses the motor freight portion of a Plan II shipment entirely within the State.  Since all of the elements of the Plan II service at issue are provided on equipment owned and operated by a rail carrier over which the ICC has jurisdiction, the plain language of § 10505(f) unambiguously supports Page 479 U. S. 451 the ICC's position.  Although § 10521(b)(1) can be read to support a contrary result, the correct, and more natural, reading of the statute is that all of the Plan II service provided by interstate rail carriers on equipment that they own is "transportation provided by a rail carrier" subject to the ICC's § 10505(f) jurisdiction.  A contrary result would be inconsistent with the ICC's historical treatment of Plan II service as "provided by a railroad," and would make § 10521(b)(1) authorize state regulation of TOFC/COFC services in areas where it has already been rejected.  Moreover, the ICC's special statutory authority to determine the proper interrelationship of different modes of transportation supports its interpretation of the Staggers Rail Act.  In its statement of rail transportation policy, Congress has unambiguously expressed its interest in allowing free competition, to the maximum extent possible, to govern the financial health of the railroad industry.  Pp.  479 U. S. 455-461.770 F.2d 452, reversed.STEVENS, J., delivered the opinion for a unanimous Court.