The Impact of Regulation and Deregulation on the growth of Intermodal Transportation in Europe and the United States

The Impact of Regulation and Deregulation on the growth of Intermodal Transportation in Europe and the United States
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The Impact of Regulation and Deregulation on the growth of Intermodal Transportation in Europe and the United States
Introduction
A renewed focus on intermodal transportation is expected to be seen in the 21st century manly driven by the rapid changes occurring in global supply chains (Rodrigue & Slack, 2012). Intermodal transportation has undergone numerous technological evolution functioning separately through a modal based regulatory framework in the 20th century. Introduction of centralization and the new focus on deregulation towards the end of the century also supported by a new wave of increased demand for logistics and global supply chains, intermodal transportation is set for a continued growth in the 21st century (Rodrigue & Slack, 2012). This paper seeks to discuss the impact of regulation/deregulation on the growth and continued growth of intermodal transportation in Europe and the United States.
In the U.S. the issue on capital generation to facilitate development and operations of the transport industry continues to be a major force shaping the industry. For instance, in the U.S. seaports are capitalized by local authorities which is the same for airports but funded by federal owned trust funds which aid in building and improving the facilities (Dewitt & Clinger, 2010). Simple approaches such as additional infrastructure as a way to reduce congestion in the transport sector have many times failed calling for stringent management strategies through regulations such as pricing systems and new capacity systems. All these regulatory structures and struggles that were influenced by engineering and management forces as ways to improve efficiency in the transport section has however in the past 20 years received a new direction (Woxenius & Barthel, 2002).
The regulatory structure has taken a reversed and redirected in how various modes of transport are governed. Since 1070s, the US and European countries shifted to being net importing nations which resulted to increased costs in transportation, high energy costs, high interest rates and heightened security concerns due to terrorism activities. New ways to regulate different transportation modes were therefore set up in the two regions as a way of liberalizing legislation. This was to ease market entry and exit for businesses, increase freedom for transport rates, and allowed both horizontal and vertical mergers. These efforts of deregulation have increased interaction between modes and created new opportunities for reorganization between mode (Winston, 2009).
Through deregulation, focus has shifted from that of identity of firms to the number of firms in a market which determines the intensity of competition. In the U.S. through deregulation of the Airline industry, competition in the past 30 years has increased due to introduction of carriers competing on routes of given distances opening up for low cost carriers into the market such as the Southwest Airlines. As the U.S. deregulated the less than truck load system, the trucking industry experienced tremendous growth d...