Operations Management
Positive and Negative Influences of Legislation and Regulation on Intermodal Transportation
Intermodal transportation is seen where goods, or people, travel across different forms or modes of transport. There are many influences on this type of transportation; the development of containers increased the demand for intermodal transportation, and technology that support longer supply chain has also increase demand. Another influence on the industry has been legislation and regulation, which has had both positive and negative impacts. This paper will look at the general concept in terms of the way regulation may impact both positively and negatively on intermodal transportation, and consider some specific examples of legislation or regulation and their potential influence.
Legislation and/or regulations have impacted directly and indirectly on intermodal transportation. Legislation has included statues to support the development and maintenance of a competitive environment, as well as controls on the movement of goods as standards for health and safety. Regulations have been implemented at different levels, many of the measures have helped to protect the industry, facilitating ongoing competition between carriers and eliminating price fixing. These may be generally seen as positive, but the perspective may vary depending upon the individual company, and whether they are an incumbent holder the strong position, or new entrant (Mintzberg et al., 2011). Invariably, strategies to protect the competitive environment are more likely to benefit newcomers, reducing the potential barriers to entry, protecting against the potential power of the incumbent supplier. However, it may also be argued that the presence of competition is usually good food industry, as it helps to stimulate innovation as firms seek new ways of competing, a move which can be good for the entire industry (Mintzberg et al., 2011). Regulations and legislation may also protect the industry, and the environment in which the companies operate.
A good example of beneficial regulation is the U.S. Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) (Nolan, Ritchie, & Rowcroft, 2002). This was a Federal...
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