Impact of Regulation/deregulation on U.S. and Europe
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Regulation and deregulation has had positive impact on the continued growth of intermodal transportation in both the U.S. and Europe.
Regulation and deregulation by the United States and Europe governments has had both a positive impact upon the growth of intermodal transportation. To promote economic growth, governments have attempted to develop and implement cohesive intermodal transportation policies both nationally and internationally with regulations and deregulations.
With the continued growth of a global economy, businesses seek to develop better methodologies of integrating product sourcing, production, and distribution. In the United States, changes in transportation and logistics, particularly changes in the trucking industry, came about as a result of trucking deregulation with the Motor Carrier Act of 1980 (Muller). Once the Motor Carrier Act became law, it did not take long for new trucking companies to appear. Thomas Moore, a senior fellow at the Hoover Institution at Stanford University and was a member of President Reagans Council of Economic Advisers stated in an article “Trucking Deregulation”, that “One of the economys major gains from trucking deregulation has been the substantial drop in the cost of holding and maintaining inventories”. He further argued, “Without the partial deregulation that resulted from the 1980 act, these changes would not have been possible”.
The implementation of rail deregulation from the Staggers Rail Act of 1980 led to decline in trucking rates and created a more sophisticated trucking industry with improvements in operations. This also reduced governmental red tape by opening the door towards a more simplified logistics system. Railroads and trucking companies were able to develop a compatible trailer-on-flatcar network providing easier delivery of products using a single container source. Since then, the companies have experienced falling prices and consolidation among suppliers.
The positive impact of regulation and deregulation has been demonstrated in the increase in efficiency, additional services, and the competition in pricing. In addition, the use of intermodal transportation through combined partnership agreements with trucking and railroad has dramatically increased since the enactment of the Motor Carrier Act and Railroad Act.
However, the negative impact is that some of the left over regulations still haunt the industry today. One example is that Federal Law requires new carriers must obtain and file with the government certificates of public convenience and necessity rates. Most of these regulations exist within individual states and are enforced by strict price control on the carriers (Moore).
At the same time of the Motor Carriers Act and Railroad Act