Intermodal transportation in the freight industry is continually getting weighed down by market monopolies. Interestingly, a majority of experts from the outside are not fully aware of this reality and they believe otherwise. It can be noted that the growth of containerization in the last two and a half decades is one of the most visible developments in the sector. It is a very remarkable growth defined by the cheaper and faster movement of cargo across the globe. One that when viewed from the outside, paints a deceptive picture that the intermodal freight sector is running smoothly and perfectly. Conversely, from the inside, the case is different. It is a system spawned with minimal innovation and extensive market dominance by a few companies which have gained roots in the industry. So yes, Holguín-Veras, Paaswell and Perl’s (2008) arguments that the intermodal freight industry in a free market economy is incapable of driving innovation are valid. I agree with them. The US government should step in and drive innovativeness in intermodal transport.
Economic regulation by the government will undoubtedly drive innovations in the intermodal transport sector. On top of initiating the construction of transport facilitates, the US government operates and maintains the roads, airports, ports, and waterways. The role of the government as the operator and of these facilities brings significant impacts on the efficiency of the intermodal freight sector. Improving the operation will result in an increased capacity of these facilities. Thus, better management by the government will become a substitute for individual capital spending by freight companies. The federal policies that govern these facilities also recognize the need for efficient management- efficient management is complementary to the investments made on the infrastructure. In the law, the federal Infrastructure investments provide that the proper use of infrastructure relies not only on the physical design of the facilities but also on the operational activities undertaken in them. To improve these activities, the industry will need to maintain high levels of service. These include direct investments, giving grants, and regulation policies to promote equity in the intermodal transportation market.
Delegate your assignment to our experts and they will do the rest.
One of the key areas to invest in would be communication. Communication is significant in logistics because the shippers, the carriers, and the receivers must keep in contact to ensure that the cargo is delivered through appropriate channels. The government can do this by extending the current progress in information technology to the freight industry. For instance, currently, there is an incomplete implementation of electronic data interchange and standard information-sharing platforms. This has reduced the efficiency of intermodal transactions. Other than communication, the government plays a role in monitoring other minor aspects of intermodal transport such as truck size, weight, and safety as well as zoning and wetlands preservation. Therefore, the government’s role in streamlining the intermodal sector is indispensable.
To better understand the practicability of the government’s participation in restructuring this sector, one would look at other external sectors where the government has been or not been involved over the years. Take, for instance, the Department of Defense (DOD). The United States has relied on technological innovations to keep it ahead of the game in terms of national security. From as early as 1950’s DOD has been free from federal interferences in terms of developing and procuring defense technologies. In fact, DOD runs on its own policies regarding the use of old technologies or foreign arms (Change, 2009). By operating in an open economy, the DOD is capable of making unregulated steps which are still beneficial for technological innovation regardless. However, DOD cannot compare to intermodal transportation. This is because the DOD is a single body, though with several units and sub-departments, but united in a common course of ensuring that the nation is secure from external threats. The intermodal sector is, on the other hand, highly competitive and commercial oriented. It means that companies will strive to make decisions that give them market advantage rather than those that benefit the entire industry.
Nuclear energy is another relevant sector from which comparisons can be drawn. The US Government, through the Nuclear Regulatory Commission (NRC), imposes heavy regulation the nuclear power generation industry. Federal agencies do not have direct contact in regulating the activities of the nuclear power plants, but the NRC conducts a comprehensive analysis to finance and measure the benefits of the government regulations (Walker & Wellock, 2010). The growth of the nuclear industry is limited by heavy government regulations. However, it should be noted that the rules are an exppression of safety concern because nuclear accidents are fatal. These regulations mean that nuclear developers have to overcome several regulatory obstacles to make significant development in the industry.
For the above reason, most of the nuclear power plants were constructed in the 1960s and their expansion has been very little (Walker & Wellock, 2010). The failure to regulate the nuclear sector would lead to rapid expansion but with severe consequences to the environment and the people. This is because there are no permanent facilities for disposing of nuclear wastes, not mention the dangers of radioactivity. In the freight sector, it is the exact opposite. Failure to regulate will not lead to growth but will limit growth by giving room to market dominances by veteran companies. Thus, the impact of government regulation varies from one sector to another.
References
Change, I. (2009). PHYSICAL SECURITY PROGRAM. Change , 1 , 5.
Holguín-Veras, J., Paaswell, R., & Perl, A. (2008). The role of government in fostering intermodal transport innovations: perceived lessons and obstacles in the United States. The future of intermodal freight transport , 302-324.
Walker, J. S., & Wellock, T. R. (2010). A Short History of Nuclear Regulation . Washington, DC: US Nuclear Regulatory Commission.
