Intermodal Transportation

Introduction

Intermodal transportation entails the usage of more than one transportation mode in a chain to accomplish the whole process of shipping goods and passengers from one region or nation to another. The modes, in this case, may include a ship, rail, and trucks in a chain. In both Europe and the U.S, deregulation and regulation have had both favorable and unfavorable impacts on the development of intermodal transportation.

Public policy is one of the significant factors that have affected the development of intermodal transportation. Since its inception back in the 1930s, the U.S’s rail industry had been under the ownership of industrialists and private firms (Rodrigue & Slack, 2013). By the late 1880s, the railroad industry became more of a monopoly. In response, Congress sanctioned the Interstate Commerce Act. In 1887, the act formulated a commission called Interstate Commerce Commission (ICC). By issuing extensive regulations, the ICC controlled the business operations of railroads in an indirect approach. An example of these regulations is the 1890’s Sherman Antitrust Act that prohibited monopolies of railroads. In 1906, the Hepburn act authorized the ICC to determine the maximum rates and thoroughly review the financial records of the companies in the industry (Rodrigue & Slack, 2013). The overall impact of all these regulations was the deterioration of the entire rail industry.

Moreover, the over-regulation of the industry by the government hindered innovations. Rates and costs increased significantly with the regulations while the service quality continued to deteriorate. The rules also influenced the trucking industry. The ICC would dictate the firms that would operate as interstate motor carriers as well as the fees to be charged.  Overall, the over-restrictive rules negatively influenced both the trucking and the railroad industries and almost drove them to bankruptcy.

Deregulation in the 1980s liberated many firms in the transportation sector from government regulators. Firms were not barred from having possession of across modes. This aspect served as a strong incentive for intermodal cooperation (Rodrigue & Slack, 2013). For instance, shipping lines prompted integrated road and rail services. The merits of each means were incorporated in the one-piece system. With deregulation, clients could no longer worry about modal barriers as they could purchase a single service to get their products transported to their doorsteps.

Privatization and deregulation trends also led to essential innovations in intermodal transportation. In efforts to offer the best services to their customers and outdo their competitors, shipping firms started to lease trains, manage rail terminals, and purchase trucking firms (Makkonen, & Repka, 2016). This made it possible for their customers to cut cost through their door-to-door services. Such advancements created crucial competitive gains for the sector and incentivized the establishment of more inland terminals.

Deregulation has also had negative impacts on the development of intermodal transportation. The enhanced growth of the sector has brought with itself comparatively lower working standards for the workers. Despite the higher profits realized by companies due to regulation, the companies have continued to offer lower wage levels for their employees (Rodrigue & Slack, 2013). For example, wages in the trucking sector have considerably remained low. This aspect has led to demotivated employees and negative publicity of the industry; hence, limiting the development of intermodal transportation. There have also been increased instances of considerably rigid management practices by intermodal transportation companies.

Over the last few decades, fears of containers beings utilized by terrorists have been raised. This concern, along with some other matters, has led to the formulation of more regulations to counteract illegal usage of the containers.  The U.S introduced new inspection requirements. The requirements made International Maritime Organizationuirem add new a rule to improve security at the port situates and facilitate inspecting of the workforce in the sector. Five years later, the U.S congress also passed a provision stating that every U.S. bound container should be inspected electronically before leaving from the port (Rodrigue & Slack, 2013). The negative impact of these kinds of regulations is that they have led to additional delays and costs that are unfavorable for the intermodal transportation industry. However, the apparent positive impact of improved safety measures cannot be ignored. Given that travelers consider intermodal transportation as a safer means to transport their goods, there has been increased demand for the services, which has greatly enhanced the growth of the industry.

Public policy in Europe is as well being used to regulate the intermodal transport sector. For example, some rules and policies that are meant to trigger a move of passengers and freight from the roads to the means that are considered ecologically more efficient (Makkonen, & Repka, 2016). A case example is in Switzerland where regulations require that all freight that crosses through the nation should be on the rail to minimize air pollution, especially in alpine valleys (Raitasuo et al., 2019). Moreover, the European Union has been aiming at promoting intermodal transport by increasing road user costs and subsidizing rail. These kinds of regulation have enhanced the continued development of intermodal transportation.

In conclusion, there needs to be the right balance of government control in intermodal transportation to ensure the continued growth of the sector. Whereas privatization and deregulation have been able to promote innovation and growth, they have also enhanced the unfair treatment of workers and stimulated rigid management practices. On the other hand, extensive regulation has hindered innovation and development of intermodal transportation. Some controls have enhanced safety and security within the sector. Therefore, in as much as deregulation and privatization is encouraged, some levels of regulation are also crucial in the continued growth of intermodal transportation.

References

Makkonen, T., & Repka, S. (2016). The innovation inducement impact of environmental regulations on maritime transport: a literature review. International Journal of Innovation and Sustainable Development, 10(1), 69-86.

Raitasuo, P., Bask, A., & Rajahonka, M. (2019). Sustainable Intermodal Train Transport. In Operations Management and Sustainability (pp. 195-222). Palgrave Macmillan, Cham.

Rodrigue, J. P., & Slack, B. (2013). Intermodal transportation and containerization. The geography of transport systems.