Regulations in the Transport Industry - Essay Example

? Regulations in transport industry Introduction This research paper is focused on the importance of regulations in transport industry. In the modernworld, regulations in transport industry should be developed with regard to economical, social and environmental issues. There is a lack of regulations in air carrier industry, railroads, water carriers and pipelines. A protection of public interest is of primary concern for American government. Therefore, a social approach to transport regulations is chosen by American government as a guarantee of public interest protection. From the very beginning of transport industry development, there was a need to regulate this sphere of human activity. There is a necessity to develop new regulations in transport industry covering peculiarities of a modern society’s development. Therefore, the government is responsible for regulations in transport industry, because it is an integral part of any society. Public interests are protected under conditions of governmental regulations of transport industry. In case development of transport industry is protected by economical regulations and governmental protection, then public interest is in safety. Modern transport regulations are developed with regard to economical factors. Unfortunately, there is a lack of considerations about social and environmental factors. Consequently, it is necessary to consider properly about environmentally health vehicles development and exploitation. There is a direct connection between transport environmental safety and human health. Modern manufacturers often neglect this fact and their main goal is to gain profits hand over fist. This point should be corrected and regulated in favor of humans and public interest. A modern look on regulation in transport industry Regulation is developed in order to “balance concerns for the public interest within a competitive framework driven by private enterprise” (Coyle, 20011). What is the legal basis for economically regulating private sector enterprise? An economical aspect is one of the basic points of transport industry’s development. “As the economy improves from the sluggishness of recent years, it is important to remember that trucking plays a pivotal role in the recovery. Nearly every good consumed in the U.S. is put on a truck at some point. As a result, the trucking industry hauled 68.9% of all the tons of freight transported in the United States in 2003, equating to 9.1 billion tons” (The trucking industry). If to suppose that all regulations are based on a common law principle: “Businesses affected with the public interest” (Coyle, 2011), then a central focus on societal and individual needs should prevail. Thus, a modern paradigm of transport industry regulations is anthropocentric and focused on public interest. In spite of the fact that there are numerous regulations in transport industry, such as Aviation and Transportation Security Act (2001), Creates Transportation Security Agency (TSA), Maritime Transportation Security Act (2002), Homeland Security Act of 2002 etc, there is a need to focus on deregulation acts. There is such kind of deregulation acts, as 4R Act (1976), Airline Deregulation Act (1977), Motor Carrier Act and Staggers Rail Act (1980) and others. Thus, economic regulations are violated in trucking industry. Surface Transportation Board (STB) is responsible for all surface mode regulation. Nevertheless, railroads are deregulated as well as air carrier industry, water carriers and pipelines. In order to protect public interests, there is a need to introduce anti-trust laws. In the transportation industry there is especially important social factor. Transportation industry is significant for social unity and economic and national defense of the country is on behalf of this industry. Transportation industry requires essential capital investments and different resources allocation (Martland, 1997). STB regulation of modes considers the following issue: to protect advantage of each mode. The development of regulation of transportation industry fosters sound economic conditions among the carriers; is focused on reconsideration of common carrier obligations. A need for development of regulations of transport industry is proven by the necessity to eliminate “reasonable charges, unjust discrimination, undue preference, unfair competitive practice” (Martland, 1997). Moreover, internal structure of transport industry requires perfection of working conditions for employees and guarantee fair wages. Public interest in new transportation regulations Public promotion of further development of transport industry regulation needs public sector’s planning. In case planning is introduced and current prospects of transportation industry development are made public, then there is a need to develop special programs and policies. Public interest is usually focused on safety regulation in transport industry. For example, the motor carrier section requires “development in the area of safety and size regulation, the motor carrier industry differs from the railroads by easiness of entry and exit from the transport industry” (Gomez-Ibanez, 1992). At the initial stage of development, a motor carrier firm needs less capital investments than a railroad. In the motor carrier industry a perfect competitive marketing model is reflected. A drawback of motor carrier industry is traffic competitiveness with railroads constraining rail rates. Consequently, it may be difficult to “re-regulate economic side of the motor carrier industry” (McCrudden, 1999). “Imported goods from overseas have to be moved multiple times from port to final destination. But, perhaps even more important, is the role that trucks play in the enormous amount of trade that flows over our northern and southern borders.  Canada and Mexico are now the U.S.?s largest trading partners” (The trucking industry). A future of the railroad industry is more complicated. For example, “deregulation allows rail mergers with less regulatory oversight,” as a result, “the industry has shrunk to four primary (and several lesser) Class I carriers”. Therefore, the issue if reregulation is being vividly discussed. In accordance with Martland (1999), “the industry should consider the possibility of supporting reregulation as a means of increasing profitability” (McCrudden, 1999). The attention of shippers is focused on the fact that the decrease of potential carriers number, e.g. “for bulk commodities, has resulted in abuses of market power in case there is only one dominant market carrier” (McCrudden, 1999). And many other issues create a turbulent atmosphere for carriers. “Before the motor carrier industry was initially deregulated by the Motor Carrier Act of 1980, there were fewer than 20,000 interstate motor carriers in the U.S. By July 2004, there were more than 524,000 U.S. carriers on file with the U.S. Department of Transportation, including for-hire, private fleets, and owner-operators. While this is a significant amount of trucking companies, the vast majority of them are small businesses” (The trucking industry). A modern situation of the transport industry is on the road of regulation development worked out by STB. With regard to the fact that transport industry is on the right way to development, the main regulations introduced in this industry covered human resource working conditions, benefits, salary, economic growth etc. On the one hand, these regulations have positively influenced on the internal structure of transport industry, but on the other hand this approach resulted in “severe air and water pollution; accelerating land consumption; worsening traffic congestion; record expenditures of public funds for road projects and far-flung development; isolation of senior citizens and others who cannot drive etc” (McCrudden, 1999). ‘Smart’ transport industry A new paradigm of transport industry development is focused on reduction of subsidies for driving, providing possibilities of transportation choices, providing a balanced relation between transportation, development of land use, environmental safety and community protection (Pollard, 2002). “Smart growth” is a policy directed on development of alternative means of transport. This policy is directed on preserving benefits of transport and decreasing negative effects of it. Public interest in this paradigm is protected with the help of propagation of a more cost-effective means of transport usage and protecting land. In such a way, transport industry is on the way of redirection of its environmentally-destructive image to environmentally and economically sound and effective industry (Bereskin, 1996). Moreover, it is evident that currently there is a great need for redirection of road-centered approach. Congestion should be dealt with in a different way, because surplus road building is not effective anymore. In accordance with Commission on the Future of Transportation in Virginia: "congestion increases as people move outward from urban centers, and additional lane miles of roads to accommodate the people lead to more development, and more people, and more congestion, and more lane miles, and around it goes"(Pollard, 2002). At this point an induced demand occurs: every road induces people to drive. Thus, in spite of the fact that transport industry strives for reaching environmentally sound transport, transport industry in practice doesn’t follow this direction. This is only a prospect vision of the transport industry future. What is obvious today is that transport industry pollutes environment and devastates natural resources. American government puts all its efforts to decrease the level of carbon monoxide in the air, but still 141 million Americans live in the areas where the level of harmful air pollution is great (Humphrey, 2000). The only way out of this complicated situation is the necessity to propagate smart growth policy. This policy shouldn’t be considered as preventive policy of transport industry growth (Bardou, 1982). This policy “seeks to capture the benefits of growth while minimizing the costs by reducing subsidies for sprawl and guiding development in ways that are less environmentally destructive, more efficient, and that create healthier, more vibrant communities”( Moraglio, 2007). Another relevant approach is sustainable transportation efforts. A less environmentally damaging transportation system, beneficial for the community, is of the primary concern for this policy (McCrudden, 1999). Conclusion Economic aspect of transportation industry development is barely covered by governments of different states. In previous epochs the importance of transport was approved by ancient societies. Transport industry has propelled development of America in 19th and 20th centuries. Next to fostering of cultural and economic development of the country, national defense was strongly supported by transport industry. The focus of transport industry should be re-regulated from ‘transportation as an end in itself’ to ‘transportation as a means to mediate societal and individual needs’. Therefore, a broader approach to transport industry requires additional development of regulations. Unfortunately, current governmental regulations do not support alternative means of transportation. There is a need to propagate bicycle, pedestrian projects and to make them safe and effective for the society. Thus, transport industry will be more favorable for the society and community. In such a way, it is possible to suppose that transport manufacturers are responsible for environmental pollution and public interest is endangered by daily subjection to environmental health hazards. Transport is an integral part of the modern community and it may work for the favor of the community and not only satisfy greedy intentions of transport manufacturers (Coyle, 2011). Therefore, there is a need to develop regulations that will shift accents of environmentally hazardous transport industry to economically and environmentally efficient industry. References 1. Bardou, Jean-Pierre et al. The Automobile Revolution: The Impact of an Industry. University of North Carolina Press, 1982. 2. Bereskin, C.G. “Econometric Estimation of Post-Deregulation Railway Productivity Growth.” Transportation Journal 35 (4) (Summer 1996): 34–43. 3. Button, K., and Pitfield, D. Transport Deregulation, an International Movement. Houndmills. U.K.: MacMillan Academic and Professional Ltd., 1991. 4. Coyle, et al. Transportation. Seventh Edition. Cengage Learning, 2011. 5. Gomez-Ibanez, J. A., and Meyer, J.R. Political Economy of Transport Privatization: Successes, Failures, and Lessons from Developed and Developing Countries. Harvard University: Taubman Center for State and Local Government, John F. Kennedy School of Government, 1992. 6. Humphrey, J., Lecler, Y., Salerno, M.S. Global Strategies and Local Realities: The Auto Industry in Emerging Markets. Macmillan, 2000. 7. Martland, C.D. “Productivity and Prices in the U.S. Rail Industry: Experience from 1965 to 1995 and Prospects for the Future”. Journal of the Transportation Research Forum 38 (1) (1999): 21+. 8. Martland, C.D. “Sources of Financial Improvement in the U.S. Rail Industry, 1996 to 1995.” Proceedings of the 39th Annual Meeting of the Transportation Research Forum 1 (1997): 32+. 9. McCrudden, C. Regulation and Deregulation: Policy and Practice in the Utilities and Financial Services Industries. Oxford University Press, 1999. 10. Moraglio, M. “Between Industry and Tourism: the Turin-savona Motorway, 1956-2001”. The Journal of Transport History 28 (2007): 52+. 11. Pollard, Oliver A. “Growth and Sustainable Transportation: Can We Get There from Here?” Fordham Urban Law Journal 29 (4) (2002): 1529+. 12. The trucking industry. American Trucking Trends. Alexandria, VA: American Trucking Associations,Inc, 2004 Read More