Page 186 - DMGT523_LOGISTICS_AND_SUPPLY_CHAIN_MANAGEMENT

Unit 8: Transportation

8.3.2 Transport Infrastructure Notes

Transportation infrastructure consists of the rights-of-way, vehicles, and carrier organizations
that offer transportation services on a for-hire or internal basis. The nature of the infrastructure
also determines a variety of economic and legal characteristics for each mode or multimodal
system. A mode identifies the basic transportation method or form.

Self Assessment

Fill in the blanks:
7. Transport transactions are often influenced by …………………… parties.
8. …………………… desire to maximize their revenue associated with the transaction while
minimizing the costs necessary to complete the transaction.
9. The …………………… maintains a high interest level in the transaction because of
transportation’s impact on the economy.

8.4 Regulations in Transportation

Various documents are prepared and submitted for smooth movement of goods from one
country to another country. In this unit, you will learn about various perspectives, kinds and
functions of export – import documents. You will also learn about the documents needed for
fulfilling the commercial obligations of an exporter and importer and various legal and other
documents involved in export – import trade. Since transportation has a major impact on both
domestic and international commerce, government has historically taken special interest in
both controlling and promoting transportation. Control takes the form of federal and state
government regulation as well as a wide range of administration and judicial administration.
With the passage of the Act to Regulate Interstate Commerce on February 4, 1887, the federal
government became active in protecting the public interest with respect to performance and
provision of transportation services.

8.4.1 Types of Regulation

Government transportation regulation can be grouped into two categories: economic regulation
and safety and social regulation. Regulatory initiatives have historically focused on economic
issues; however, recent regulatory initiatives have increasingly been directed toward safety and
social issues.

Economic Regulation

Regulation of business practices is the oldest form of government control. To provide dependable
transportation service and to foster economic development, both federal and state governments
have actively engaged in economic regulation. For over 100 years, government regulation
sought to make transportation equally accessible and economical to all without any
discrimination. Regulatory policy has attempted to foster competition among privately owned
transportation companies. To encourage economical and widespread transportation supply,
government invested in public infrastructure such as highways, airports, waterways, and deep
water ports. However, to actually provide transportation service, the government supported
and regulated a system of privately owned for-hire carriers.

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