Deregulation And It’s Impact On The Trucking Industry
The Trucking Industry is a vital component of commerce in the United States largely because such a huge portion of all the goods transported in the United States moves by truck. “68.5 percent of all the freight transportation tonnage moved in the United States according to Costello, B. (2013); and trucking accounts for 84 percent of all revenue spent moving freight in the transportation industry according to Bennett, A. (2010). Truck drivers facilitate one of the modes in intermodal transportation that has in effect created a spatial bridge across the United States. “Trucks are the only mode of freight transport that services 100 percent of the communities in America, with 80 percent
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(cite 9) Before deregulation there was, and still is regulation in some areas of business and commerce as it relates to transportation. “Regulation consists of requirements the government imposes on private firms and individuals to achieve government’s purposes. These include better and cheaper goods and, protecting existing firms from unfair competition, and economic regulation that limits who can enter a business”. Litan, R. (2008). Regulation in the transportation industry gained momentum in the 1800s after the civil war. The monopoly created by railroads at that time gave birth to many rail carrier abuses and unfair business practices such as the bribing of elected public officials and showing favoritism to preferred customers. They even went so far as to manipulate the price of stocks and bonds on the market by Stifling or eliminating competition. According to Talley, W.(2001) the regulatory periods can be further broken down into three periods; “the Monopoly Era (1800s), the Competition Era (1930s) and the Reform Era …show more content…
It also laid the pathway for the formation of the Interstate commerce commission (ICC) to oversee compliance with the new law. In 1935 the Motor Carrier Act was passed to regulate the trucking industry due to pressure from the railroads. In 1980 a subsequent Motor Carrier act was passed to deregulate the trucking industry. This laid the path for many trucking companies to enter the market. In 1994 the Trucking Industry Regulatory Reform Act was passed; motor carriers were no longer required to submit tariffs with the Interstate Commerce Commission. In 1995 the Interstate Commerce Commission Termination Act was passed. It eliminated the ICC and created what is known today as the Surface Transportation board. In addition to these regulatory acts that have been passed, there have been several others that apply to other modes of transportation such as rail, air and sea
“For example, the federal government regulates the quality of food and water, the safety of workplaces and airspaces, and the integrity of the banking and finance system.” (Bianco, Canon 2011, p 582) Regulations find out if the product is a market failure. There are two types of regulations, which are economic and social. “Economic regulations sets prices or conditions on entry of firms into an industry, where as social regulation address issues of quality and safety.” (Bianco, Canon 2011, p 582) Economic regulations are concerned with the price regulation of monopolies.
Before the Deregulation Act of 1978, the airline industry was federally regulated in regards to
Over-the-road, or long-haul, truck drivers carry merchandise over state lines. In some cases, these drivers travel a consistent route, but others may work a variety of routes all over the country. Some commercial drivers specialize in carrying uncommon cargo, such as hazardous materials or cars. According to the U.S. Bureau of Labor Statistics (BLS), jobs for drivers of heavy and tractor-trailer trucks (including commercial trucks) were projected to increase 11% during the 2012-2022 decade. In May 2013, the BLS noted that the median annual salary for the field was $38,700. Commercial truck drivers must obtain a commercial driver's license to operate vehicles over 26,001 pounds of gross vehicle weight, according to the U.S. Department of Transportation's Federal Motor Carrier Safety Administration (www.fmcsa.dot.gov). Drivers of vehicles transporting hazardous materials or oversized cargo must also obtain special endorsements and a commercial driver's license (CDL) in their home state. The hazardous materials endorsement involves a knowledge test as well as a TSA (Transportation Security Administration) threat
The railroad monopolies were the first to be targeted by the government. Small customers and businesses were taking huge hits from the outrageous overcharge and prices set by the monopolies. State legislatures attempted to fix this issue creating maximum rate laws, however the Supreme Court would later rule these state laws as unconstitutional in Munn v. Illinois. This ruling further enraged the public as many of these railroad monopolies were giving
In 1887, Congress passed the Interstate Commerce Act, making railroads the first industry subject to Federal regulation. This law was passed by the Congress largely in response to the public demand that railroad operations be regulated. A five-member enforcement board knowns as the Interstate Commerce Commission was also established by the act.
During the building of the Transcontinental Railroad, the railroads themselves created a large market for the steel and iron industries.4 The steel and oil industries were booming and corruption was rampant. Andrew Carnegie had cornered the market in the steel industry and John D. Rockefeller had cornered the oil market. Rockefeller bought up his competition after essentially putting them out of business by flooding the market with refined oil bringing down prices and profits. He was determined to pay no one a profit because he wanted it all for himself. He created a plan called vertical integration which consolidated his businesses into one by creating The Standard Oil Trust.5 These two men became known as barons and got rich beyond belief. In 1890, the Government enacted the Sherman Anti-Trust Act to prevent large firms from controlling one single industry and finally put a stop to these monopolies and trusts, 6 but it was not rigorously enforced until the 1900’s. This act was designed to restore competition and
Esch-Cummins Transportation Act of 1920 encouraged private consolidation of railroads and Interstate Commerce Commission would guarantee their profitability;Merchant Marine Act of 1920
The Federal Trade Commission Act of 1914 (which also includes an Amendment known as the Wheeler-Lea Act of 1938)
Commerce Act: this This act was designed to regulate the railroad industry.This forced railroad rates to be reasonable and
During the depression of the 1870s, farmers protested against railroaders who ran the farmers into bankruptcy. Many Midwestern legislatures tried to regulate the railroad monopoly. In 1887, Congress passed the Interstate Commerce Act. It prohibited rebates and pools, required the railroads to publish their rates openly, forbade unfair discrimination against shippers, and outlawed charging more for a short trip than for a long trip over the same line. It also created the Interstate Commerce Commission (ICC) to administer and enforce the new legislation. The new laws provided a forum where competing businesses could resolve their conflicts in peaceful ways (instead of engaging in price wars). Congress passed the Sherman Anti-Trust Act of
Before a series of antitrust acts and laws were instituted by the federal government, it was not illegal for businesses to use any means to eliminate competition in late nineteenth-century America. Production technology was now advanced to the point that supply would surpass product demand. As competition in any given market increased, more and more companies joined together in either trusts or holding companies to bring market dominance under their control (Cengage 2). As President Theodore Roosevelt was sworn into office in 1901, he led America into action with forceful government solutions (“Online” 1). Roosevelt effectively regulated offending business giants by the formation of the Department of Commerce and Labor, the Bureau of
Competitive analysis main objective is to research, analyze, and compare the competition in relation to the company. Analytical tools used for competitive analysis include the five forces framework, value net, driving forces, strategic groups, competitor analysis, and key success factors are analytical tools. The competitive analysis will enable the trucking company to understand more about the industry and the competition, to be able to develop a competitive strategy that will give the company a competitive advantage by taking into account the actions and responses of the competitions (Thompson, Peteraf, Gamble & Strickland, 2016).
The domestic US airline industry has been intensely competitive since it was deregulated in 1978. In a regulated environment, most of the cost increases were passed along to consumers under a fixed rate-of-return based pricing scheme. This allowed labor unions to acquire a lot of power and workers at the major incumbent carriers were overpaid. After deregulation, the incumbent carriers felt the most pain, and the floodgates had opened for newer more nimble carriers with lower cost structures to compete head-on with the established airlines. There were several bankruptcies followed by a wave of consolidation with the fittest carriers surviving and the rest being
On October 24, 1978, President Carter signed into law the Airline Deregulation Act. The purpose of the law was to effectively get the federal government out of the airline business. By allowing the airlines to compete for their customers' travel dollars, was the thinking, that fares would drop and an increased number of routes would spring up.
One of the major disadvantages of driving is the risk of death due to fatal car accidents in the United States, which was around 32, 719 highway deaths in 2013. However, for public transportation, such as trains, there have been on average 876 deaths due to a rail incidents in 2013 in the United States ("Crossing Collisions & Casualties by Year."). Although these numbers seem high, light trucks, vans, and passengers compose a majority of the highway deaths and only a mere 6 rail passengers were a part of the 891. Although these statistics are on a national level, these statistics show how much safer it is for a person to travel by train rather than by car, and even more, if the number of cars decreased in the Atlanta Metropolitan area and people used other forms of transportation, such as public transportation, air pollution’s health risks and effects would not harm the urban population as much as they do