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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.

depth-of-field-empty-fog-210782 | HOW REGULATION AND DEREGULATION HAVE AFFECTED THE TRANSPORTATION INDUSTRY | Portec Rail

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.