Intermodal Transportation in the European Union and the United States

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Table of Contents

Introduction
Regulation
Deregulation
Conclusion
References

Introduction

In both economies, the European Union and the United States, transportation services immeasurably contribute to the economy. With manufacturing and service sectors relying on transportation, network efficiency assumes a critical role in achieving optimal value. Intermodal transportation brings competitiveness by playing a significant role in how the E.U. and the U.S. promote attractiveness in their production. The impact attributed to the legal environment associated with intermodal transportation networks resonates in other sectors of the economy. The case study focuses on both the positive and negative impact of regulation or deregulation in the E.U. and the U.S. on intermodal transportation growth.

Regulation

The impact of intermodal transportation regulation has varied in the U.S. and several E.U. countries. To some extent, regulation has limited competition in intermodal transportation. The transport sector has encountered massive public expenditure based on limited competition. Growth has been stalled at national levels, in both regions, due to the inefficiencies attributed to public entities. For example, in the United Kingdom, the bus industry encountered heavy resource waste in the years leading to 1980, resulting from high-level government engagement in the transport sector. Nonetheless, the U.K. government saw the need to control waste and passed the 1980 and 1985 Transportation Acts to monitor the role of the government in the transportation industry (Tudorica & Banacu, 2017). However, there are benefits associated with regulation that cannot be ignored. One positive control regulation aspect in intermodal transportation is the reduction of operation costs (Achahchah, 2018). In the U.S., for instance, the 1991 ISTEA Act was established to promote intermodal transportation (Achahchah, 2018). The act singled out corridors that helped avail funds for improvements resulting in greater efficiency and decreased delays to achieve the promotion.

Deregulation

Similar to regulation, deregulation has positive and negative aspects as well. One advantage of deregulation is that it freely facilitates market demand and supply forces to act. With the two forces interacting, the market experiences efficiency in outcomes, which benefits the well-being of the economies of the two regions. In the E.U., associated policies have an intermodal transportation network that fulfills member state objectives (Tudorica & Banacu, 2017). Tremendous improvements have been encountered in E.U. member states regarding goods and services movements between states. The efficiency linked to the movement of goods and services has resulted in improved economic activities in the E.U., with the economies in the member states significantly growing. Nonetheless, with deregulation, there has been a spurring, to a great extent, of cartel activities that have resulted in the loss of control of some major players in the transportation industry (Achahchah, 2018). For example, many individual careers have gone bankrupt, with others losing much of their labor due to unstable economic and political clout. In the U.S. and the E.U., cartels gained control of the transportation infrastructure when the respective governments privatized transportation activities.

Conclusion

Positive and negative impacts associated with the regulation or deregulation of intermodal transportation growth in the E.U. and the U.S. cannot be denied. Even with deregulation promoting market competition, intermodal transportation vulnerability to cartel-based activities results in unhealthy economic practices. Regulation directs resources to economic sectors that depend on intermodal transportation services to develop. However, with this comes limited competition that leads to public sector inefficiencies. With the inefficiencies, the growth of intermodal transport has been curtailed. Based on the impacts of regulation and deregulation of intermodal transport, stakeholders from both regions must put in place measures that ensure a state of balance between regulating or deregulating the transport sector. The significance of such measures will help achieve intermodal transportation growth.

References

Achahchah, M. (2018). Lean transportation management: Using logistics as a strategic differentiator. Milton: Productivity Press.

Tudorica, A, & Banacu, C. S. (July 01, 2017). The potential of intermodal transport projects in Romania. Proceedings of the International Conference on Business Excellence, 11, 1, 649-659.

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Intermodal Transportation in the European Union and the United States

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