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CHALLENGES IN SUPPLY CHAIN MANAGEMENT

Regulation and deregulation determine how far the government and its policies can intervene in all aspects of the management of industries. When there is regulation, businesses are subject to government control and are required to comply with standards set by the government. Whereas in deregulation, government control is alleviated and industry regulation is often handed to private companies or the business sector. This is applicable to the transport industry. We have seen how regulation and deregulation have affected the growth of intermodal transportation in the European Union and in the United States. Intermodal transportation, in relation to supply chain management, involves the integration of different modes of transportation to meet the needs of the market in relation to the supply and distribution of goods and services. In the case of the United States, it involves the transport of goods and services through roads, railways, sea, and air. Among the European Union member states, it involves mainly the road-rail transport only.

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With the development of intermodal transportation in the United States, European Union, and other countries across the world, there is a need for enhanced information and communication technology to manage the supply chain. There is an increased demand for timely and cost-efficient delivery of goods and services. This means there is a need for more intermodal capacity to meet the increase in demand. The challenge now lies in creating better interconnectivity and interoperability across different modes of transportation in different locations for the shipment of goods and services all over the world. Optimization of the entire system is key. The focus is not just on the infrastructure but on the effectiveness of the whole process involved in supply chain management. Upgraded highway and railway services, airport and seaport infrastructure, as well as the integration of information and communication are all needed for efficient and effective intermodal transport service. There should also be international and inter-organizational cooperation and coordination to make the system work smoothly. Governments need to come up with policies that would protect not just the business sector but the consumers as well. In the end, the intermodal transportation industry is expected to provide optimum performance and quality service even while maintaining their business profitability.

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HOW REGULATION AND DEREGULATION HAVE AFFECTED THE TRANSPORTATION INDUSTRY

Prior to the 1980s, the transportation industry in both the United States and European Union countries was regulated. In the US, the government directly influenced pricing and controlled entry and exit of all types of vehicles. This was meant to safeguard society from price discrimination and give stability and protection to the transportation business in the country. The downside of regulation was the added burden to businesses to comply with government regulations to get their permits and approval of operations. Since different countries had different policies governing the transportation industry, freight passage from one country to another would depend on bilateral agreements and quota arrangements between the countries involved. Businesses such as those involved in the haulage of goods also experienced regulatory constraints and strict border controls. The competition was almost eradicated. With the respective governments exercising regulatory control, the actors, activities, and resources in the trade and business operations of intermodal transport sector among countries and states were limited.

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With the passage of the Motor Carrier Act and Staggers Rail Act in the United States, regulatory control over trucks and railroads were reduced and eventually paved the way for elimination of federal regulation for airfreight and deregulation in other modes of transportation. The European Union followed after a decade through the development of bilateral, cabotage, and cross-trade operations. European intermodal road-rail transport increased by almost 50% from 1990 to 2000. These were because of the growth of business operations covering the Alpine crossing and seaports to land. Structural changes benefited the business sector. Deregulation brought about commercial freedom. Different actors and players took advantage of the trade liberalization among different states and countries. Globalization opened a new and vast market which required businesses to extend the scope of their services. Intermodal transport services have a very crucial role in the supply chain management in terms of the production and distribution of goods and services across the world. In the United States, carriers such as FedEx and UPS have diversified and expanded their businesses to meet the growing domestic and global demand for freight movement. In the European Union countries, container shipping lines and their agencies wanted to extend their services to include port operations and land transport. Clearly, deregulation spurred the growth of the intermodal transportation industry and this is the way to go moving forward to be able to compete globally.

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THE HAZARDOUS MATERIAL TRANSPORTATION ACT

Hazardous materials can cause serious damage to health, property, and the environment. But these materials are being transported from one place to another for different purposes that they serve. As the Federal Railway Administration says, “the production, transportation, and use of hazardous materials are essential to the economy of the United States and to their technology-dependent societies.” According to the Department of Transportation, approximately four billion tons of regulated hazardous materials are transported each year. These hazardous materials present risks while they are being carried through the land, water, or air. In any event that damage happens, there has to be accountability.

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The Hazardous Materials Transportation Act underscores the need for proper communication. Coordination with different government agencies, organizations, and businesses guarantees that the main goals of the law are met. This law also presents a challenge to businesses to come up with more efficient means to handle compliance both for the company and their customers. Concerned agencies and organizations must make use of research and development to increase the safety and efficiency of carrying hazardous materials across all modes of transportation. Most importantly, this research on HMTA highlights the value of accountability not only for one’s self but for others. Businesses are responsible to their employees, consumers, the environment, and the rest of the society. It is the duty of business owners to comply with the law. Hazardous materials present risks and businesses should see to it that those risks are mitigated. The culture of safety is heightened. These are proactive measures to avert damages and accidents. It is necessary to go back and reiterate the purpose of HMTA which is to protect against the risks to life, property, and the environment. In the end, businesses have stewardship of making this world a safer place to live in for everyone.