Intermodal transportation entails the use of two or more modes of transportation in succession with the aim of accomplishing the entire process of transporting people and goods from one country/region to another. It is usually characterized by the use of rails, trucks, ship in succession for moving goods and people between destinations. Over the years, intermodal transportation has grown exponentially. Today, due to increase in demand for global supply chains, logistics and a new focus on deregulation, the intermodal transportation is expected to experience continued growth (Rushton, Croucher & Baker, 2014). In this paper, I will discuss both the negative and positive impacts of deregulation/regulation on the continued growth of intermodal transportation in USA and Europe.
Positive Impacts
One of the positive impact of intermodal’s transport deregulation is that competition has been established in the industry. This is mainly after the adherence to the Interstate Commerce Commission regarding the reduction of monopolistic powers particularly in sea transportation. As a result of this, this mode of transport has since experienced increased service delivery, competition and responsiveness thus boosting the economy of both countries. Additionally, the economies of both countries have been improved through the rapid development of industrial markets around/along the intermodal transportation routes (Finger, Holvad & Edward Elgar Publishing, 2013)
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The regulation of intermodal transport has also improved the efficiency of activities in the transport sector. For example, in the U.S., the generation of capital in order to facilitate transport operations and development has served as a great obstacle to the industry. Additionally, handling of congestion through simple approaches such as building additional infrastructures (such as footbridges and bypasses) have most of the time failed. However, through the introduction of regulatory structures such as new capacity systems and pricing systems, new directions in the transport sector have been observed (Slack, 2016).
The deregulation process has also resulted in environmental development characterized by efficient, affordable and innovative transportation services. As a result, the volumes of goods and number of passengers have increased thereby leading to the growth of the sector as well as the countries’ economy. For example, in Europe, the intermodal transportation has enabled pre-carriage and on-carriage services thus lessening the logistics involved. Additionally, the regulation of different modes of transport in the two countries as a way of liberalizing legislation has also eased the process of market entry and exit for all type of businesses. Also, it has allowed for both vertical and horizontal merging of transportation and logistics companies thereby improving delivery of services in the two countries (Kalašová, Kapusta & Toman, 2016)
Negative Impacts
On the other hand, negative impacts have been experienced through regulation and deregulation in both countries. To start with, deregulation has led to the introduction of large carriers and vessels in the sector. Also, the wage levels of transport employees in both countries have remained stagnantly low despite the increase in profits associated with the intermodal transport. The impact has to some extent influenced the growth of intermodal transportation due to lack of motivation among workers. This is mainly instigated by the inability of Motor Carrier Reform Act to deliver as promised concerning the issue of streamlining the welfare of transport stakeholders.
Although deregulation and regulation have led to numerous changes in policies that have enabled the sector to grow, some of the leftover regulations still pose a negative impact on the growth of the industry. A good example is the U.S. federal law that requires all new carriers to obtain and file the public convenience certificates as well as the necessity rates. These regulations are usually enforced by high and strict price control thus influencing the growth of the sector (Slack, 2016).
Conclusion
From the above information, the deregulation/regulation in both U.S. and Europe has allowed for the continued growth of intermodal transportation. In summary, the positive impacts include improved operations efficiency, the establishment of competition, increased range of services provided, reduced prices and congestion, enabling merging and environmental development. The negative impacts include; introduction of large carriers and vessels, stagnant employees’ wages and harmful leftover regulations. Clearly, it is evident that the positives outweigh the negatives and therefore, it can be asserted that deregulation/regulation has played a vital role in shaping the transportation systems in both U.S. and Europe.
References
Finger, M., Holvad, T., & Edward Elgar Publishing. (2013). Regulating transport in Europe . Cheltenham, U.K: Edward Elgar.
Kalašová, A., Kapusta, J., & Toman, P. (2016). A model of transatlantic intermodal freight transportation between the European continent and the United States. NAŠE MORE, Znanstveno-stručni časopis za more i pomorstvo , 63 (1), 5-15.
Rushton, A., Croucher, P., & Baker, P. (2014). The handbook of logistics and distribution management: Understanding the supply chain . Kogan Page Publishers.
Slack, B. (2016). Intermodal Transportation. Sustainable Railway Futures: Issues and Challenges , 219.
