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The European Intermodal Rail-Road Freight Transport Case Study


Not so long ago intermodal transportation attracted enormous attention with the development of supply chains that can be seen all over the world. Since the previous century, it has changed greatly due to the technological evolution. With the focus on centralization and deregulation that was observed at the end of 20th century, intermodal transportation started to be treated as a driver of growth (Rodrigue, Comtois, & Slack, 2012).

As the US and Europe applied regulation and deregulation, they affected various industries greatly as well as promoted economic growth. The desire to improve intermodal relationships triggered the implementation of deregulation. With its help, governments wanted to increase price and competition in the sphere so that the development of the intermodal transportation can be streamlined.

The first steps of such changes were seen in the 1940s already, with the appearance of the Transportation Act. Still, more substantial alterations were made in a decade starting with the 1970s, and included the US recognition of the Motor Carrier Act and the Staggers Rail Act of 1980. As a result, intermodalism started to grow and logistics improved. New multimodal transportation organizations appeared as it was cheaper to maintain inventories.

Those companies that used to be competitors started cooperating with the desire to market their capacity. A range of intermodal operating agreements was made, which provided an opportunity to expand a range of services and adapt them to various clients. As a result, the price of the services lowered while their quality reached higher levels (Engelke, 2016). Due to the cooperation between rail, trucking and shipping organizations, “intermodal traffic has grown from 3.1 million trailers and containers in 1980 to 8.8 million in 1998” (Bureau of Transportation Statistics, 2000, par. 9).

The US transportation system was in poor condition in the 1970s because there was not enough funding to buy new equipment and make it less dangerous. Still, with the implementation of the Regulatory Reform Act that was followed by the Staggers Act the situation started to improve, and “seven bankrupt rail lines” were replaced by Conrail (Bureau of Transportation Statistics, 2000, par. 7). The railroads received an opportunity to define and apply rates they believed to be appropriate.

Moreover, they got a chance to stop working at some lines if considered them to be unprofitable. Class I railroads started to grow rapidly so that today there are more than five of them only in the US. The fact that regulations provided rail lines with a possibility to stop working in particular locations turned out to have negative consequences for those people and organizations that represent them, as transferring became more complicated for them.

The deregulation of rail transport triggered the decline in trucking rates, which seemed to be a disadvantage for this industry but in fact provided an opportunity to implement efficient improvements and enhance operations. In addition to that, the logistics system which used to be extremely complex was improved and became simpler. Railroads and trucking organizations started to cooperate. They used a single container source, which leads to consolidation and simplified the procedure of product delivery.

However, the implementation of some regulations made it more complicated for the intermodal transportation to develop because the organizations had to follow strict instructions. For example, the Federal Law made it more difficult for the start-up firms to operate. According to it, they are to obtain “certificates of public convenience and necessity” (Justia, 2013). In this way, organizations tend to face difficulties on the initial stages of working.

In addition to that, a great obstacle can be seen in the existence of regulations and policies that differ from one state or country to another. It means that the companies need to conduct a sufficient research and implement a range of changes to adapt to the rules of a new location if they are willing to expand and reach new market populations. The same can be said about the cooperation between different companies, as their operations and the way they maintain business need to be aligned for the agreement to come into force and bring success to both organizations.

Thus, it can be concluded that regulation and deregulation lead to the improvements in the intermodal transportation. They enhanced the quality of the services, broadened their range, and urged the competition in pricing. All in all, the usage of intermodal transportation became much more frequent as the US and European governments accepted appropriate acts. Still, some regulations turned out to have an adverse impact on the intermodal transportation and its growth.

They lead to the necessity to obtain new certificates and follow the policies that differ in different states and countries. In addition to that, individuals and companies that are located in the territories abandoned by the rail lines tend to have difficulties with reaching their destinations even though such alteration allowed the rail lines to reduce their expenditures. Still, regulation and deregulation tend to have more positive influence on the transportation industry regardless of some drawbacks, as they gave it more opportunities for development and enhancement.

References

Bureau of Transportation Statistics. (2000). Growth, deregulation, and intermodalism. Web.

Engelke, L. (2016). Factors affecting freight demand. Web.

Justia. (2013). . Web.

Rodrigue, J., Comtois, C., & Slack, B. (2012). The geography of transport systems. New York, NY: Routledge.

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IvyPanda. (2020, October 11). The European Intermodal Rail-Road Freight Transport. Retrieved from https://ivypanda.com/essays/the-european-intermodal-rail-road-freight-transport/

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"The European Intermodal Rail-Road Freight Transport." IvyPanda, 11 Oct. 2020, ivypanda.com/essays/the-european-intermodal-rail-road-freight-transport/.

1. IvyPanda. "The European Intermodal Rail-Road Freight Transport." October 11, 2020. https://ivypanda.com/essays/the-european-intermodal-rail-road-freight-transport/.


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IvyPanda. "The European Intermodal Rail-Road Freight Transport." October 11, 2020. https://ivypanda.com/essays/the-european-intermodal-rail-road-freight-transport/.

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IvyPanda. 2020. "The European Intermodal Rail-Road Freight Transport." October 11, 2020. https://ivypanda.com/essays/the-european-intermodal-rail-road-freight-transport/.

References

IvyPanda. (2020) 'The European Intermodal Rail-Road Freight Transport'. 11 October.

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