Regulation and Deregulation, Case Study Example

Holguin-Vergas, Paaswell, & Perl, (2008) state that the US government should be the catalyst for innovations in intermodal transportation. They base this argument on the fact that the industry, in a free market economy, has been limited in their ability to deliver these innovations. This paper will support the authors’ theories through use of historical examples, and development of new technologies for the DOD.

United States truck transportation accounts for approximately 71.7 per cent of yearly shipments in the states alone: this estimate further accounts for around 69.4 per cent of tonnage. In this business the revenue stands at about $6.9 trillion (1997 estimates). With these numbers, it’s no wonder that the American populace spends more money on “transportation, freight movement and commuting, than they do on clothing, operating the household, recreation and intercity travel put together” (p. 302). This further accounts for a job market in which one in every ten jobs in the states is occupied with transportation market in some fashion (p. 302).

With the above numbers speaking to a revenue base that’s not only attractive, and productive but also supplies a tenth of jobs in America, the expansion into international territory comes as no surprise. This expansion, however, has demanded innovative advances from an organization that has refused to grow under these new pressures. American transportation needs to not only grow in capacity but also must implement transportation in a “variety of services (p. 302) for the customer on not just the national, but the international scale. The lack of productivity and foresight in this department is staggering when the numbers speak volumes about this potentiality.

There is a definite strong need to implement innovative, creative, foreward thinking policies in the intermodal transport scheme. The amount of mileage, potential gain in revenue, and the dedication in the past the country has shown in this department merely strengthens the idea for freight in America to be “an agent of economic development” (p. 303). On both the national and the international front America is stunted in such innovative policies “with only a handful of good examples (for example Singapore, the Netherlands) where far-reaching freight transportation programmes, including the area of freight automation, have been in place for a long time” (p. 303).

There seems to be a lack of focus in the industry that is both inconsistent in its forward thinking as well as confused as to its potential growth. This is due, as the authors state, to the “institutional diversity and durability of American transportation finance, planning and operations. American transportation innovations have traditionally reflected” (p. 305). An example of this is when the private sector in America took over the railroad business during its apex (this would be the early nineteenth and twentieth centuries) it garnered quick revenue and public response because there was such a need for this kind of travel. The railroad effectively took the lead “in creating proprietary technical, and to a lesser extent economic, research that facilitated innovations

in moving freight and people by rail” (p. 305). When this boon translated itself into the construction of American road system in the form of byways and highways during WWII, the technical and socio-economic research, implementation and innovation was present, however “public dissemination of results became a means of diffusing technical and administrative innovations” (p. 305).  The authors suggest that this fragmentation of research, innovation, investigation paired with administrative on the state and national level formed a lack of coherency in the transportation programmes. This has stood as the main reason for lack of innovation in this high paying organization, throughout this second half of last century, well into this one.

The fragmentation witnessed during this time also combines “with the American propensity to create exceptionally durable transportation institutions, the ability to advance the understanding of systemic issues that cut across organizational boundaries and to integrate findings from disparate investigations into innovative results becomes limited” (p. 305). There is a strong sense of lack of leadership in this area as the fragmentation means there is no team building, collaboration going on; which leads to separate plans, loss of time, and a strong fragmentation in funding. The authors state that intermodal innovations are severely constrained by this “durability in transportation policy” (p. 305) because the habit in American government is to “lock in” both financial parties and administrative officials involved in the transportation business through “particular organizational arrangements and relationships between politics and technology” (p. 305).

There is hope, however, in the form of certain organizations such as the National Science Foundation (NSF) who in recent years has sponsored a myriad of researching projects in freight transportation. The hope is to have innovative contributions to come to fruition during this researching to add to the quickly growing, and revenue generating business. This research focuses on a multi-disciplinarian approach through a “partnership between the United States Department of Transportation (USDOT) and the NSF” (p. 306). These opportunities, however, are small in the big picture of intermodal transportation in which large assets are being ignored through administrative lock ins and lack of partnership between such administrations.

References

Holguin-Vergas, J., Paaswell, R., & Perl, A. (2008). The role of government in

fostering intermodal transport innovations: perceived lessons and obstacles in the United States. (ed.) Elgar, E. p. 302-323.