Intermodal Transportation in the US and the EU

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Intermodal Transportation in the US and the EU

Table of Contents

Introduction
Regulation
Deregulation
Conclusion
References

Introduction

Transportation services contribute immensely to the economies of both the European Union and the United States of America. Other sectors of the economy such as the service and manufacturing industry rely heavily on the efficiency of the transport network in realizing their optimal value to the economy. The competitiveness of intermodal transportation plays a vital role in promoting the competitiveness of U.S and European Union products (Dempsey, 2011). The legal environment of the intermodal transportation network affects the efficiency of other sectors of the economy. This paper seeks to explore the impact (positive and negative) of regulation/deregulation on the growth of intermodal transportation under the European Union and in the U.S.

Regulation

Regulation has had a varied effect on intermodal transportation in the U.S and member countries of the European Union. Regulation has to some extent limited competition in intermodal transportation. This factor is responsible for massive public expenditure on the transport sector. Inefficiencies associated with public entities have stalled growth at the national level. For instance, the United Kingdom experienced heavy wastage of resources in the bus industry in the years prior to 1980 due to the high-level involvement of the government in the sector. The government saw the need to reduce its involvement. In 1980, it passed an Act followed by another one in 1985 both of which reduced the role of the state in the transportation industry. However, the regulation also has its benefits that one cannot ignore. One such positive aspect of control is a reduction in operating costs (Dempsey, 2011). For instance, the ISTEA Act of 1991 in the United States was intended to promote intermodal transportation. It singled out corridors considered to be vital in helping to avail funds for various improvements. The Act has led to a decrease in delays and greater efficiency.

Deregulation

Deregulation, on the other hand, also has both positive and negative aspects. The advantage of deregulation is that it gives way to the market forces of supply and demand to act freely. The interaction of the two forces helps in achieving an efficient outcome that is beneficial to the health of the European and American economies. The EU policy aims at having an intermodal transport network that helps in fulfilling the objectives of the member states (Harbeson, 2010). Deregulation has seen member states experience tremendous improvements in the efficiency of the movement of goods and services among them. The efficiency has significantly boosted economic activities, and as a result, spurring economic growth in the region. However, deregulation has to a great extent also promoted the activities of cartels who have gained control of some of the crucial transport infrastructure during privatization efforts by the American government and the European Union.

Conclusion

There is an impact (positive and negative) of regulation/deregulation on the growth of intermodal transportation under the European Union and in America. Despite the fact that deregulation promotes competition in the market, it increases the vulnerability of intermodal transportation to the activities of cartels that are unhealthy in most cases. Regulation, on the other hand, helps in the direction of resources to areas deemed crucial in the development of intermodal transportation. However, this limits competition leading to the inefficiencies associated with public entities and, as a result, curtailing the growth of intermodal transport. There is a need for stakeholders under the European Union and in the United States to put in place measures that will ensure a careful balance between regulation and deregulation. Such measures will assist in achieving an optimal outcome in the growth of intermodal transportation.

References

Dempsey, P. (2011). Symposium on Intermodal Transportation: The Law of Intermodal Transportation: What It Was, What It Is, What It Should Be. Transportation Law Journal, 27(1), 367-367.

Harbeson, R. (2010). Recent Trends in the Regulation of Intermodal Rate Competition in Transportation. Logistics Management (Highlands Ranch, Co.), 53(11), 30-30.

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