Regulations in the Transport Industry

Introduction

Transportation refers to the transfer of people and commodities from one geographical location to another. Transportation system involves the objects being transported, vessels used to transport the objects and mode for movement of the vessels. The objects being transported can either be people or goods, the transportation vessels are mobile devices in which the objects are put. The vessels such as vehicles and airplanes among others are used for the movement of the objects being transported.

Mode of transportation on the other hand refers to the medium on which the transportation vessel moves, for example road or rail among others. This paper seeks to discuss the topic as to whether or otherwise “there should be more regulation in the transport industry”. The paper will look into regulations that are operational in the transport industry, the inefficiencies of the existing regulations and possible inclusions that can be added to the transport industry regulations to improve its effectiveness.

Transport Regulations

The transport industry is normally under direct monitoring of governments. In most cases, more attention is given to regulations of the transport system as compared to governments’ general involvements in other sectors of their economies.

One of the reasons for involvements in regulation of transport services is the nature of sensitivity of the industry. Issues such as government policies and consumer utility are some of the reasons why attention is paid to further regulating the transport industry more than when compared to other industries. The need to ensure that illegal commodities are not sneaked into a country or transported within a country for example, calls for the task to scrutinize and regulate the industry. Measures to ensure that transport systems meet standards for safety as well as consumers’ satisfaction have also called for extra effort by governments to protect citizens from investors in the transport industry.¹

Road Transport Regulations

Quite a number of measures have over time been exercised to ensure control of the road transport system. Measures to ensure safety standards and to reduce environmental pollution are some of the common initiatives that have been put in place to protect other people from pollutions that would be caused by vehicles roads. The European Union, for example, had taken measures to monitor and reduce dangers that are caused by pollution of vehicles as a result of exhaust gases produced by vehicles. In achieving this step, the European Union developed basic standards that are to be met by vehicle construction companies.

These steps have led to increased care being taken by car designer companies regarding the amount emissions produced by vehicles into the environment. A significant positive change has for example been realized regarding the objective of a clean environment that is free or safe from pollutions from road transport gas emissions. Emission rates were successfully reduced in the period ranging from 1993 to the year 2005 with carbon monoxide emission being reduced from a scale of 4.9 in the year 1993 to a scale of 1.5 in the year 2005. Particles’ emissions were also reduced from a scale of 0.4 in the year 1993 to a scale of 0.02 in the year 2005.

A review of the amount of decrease in the exhaust emissions showed success in the move to regulate the road transport in terms of these omissions. Other measures have also been taken by the same body to ensure that people’s safety is taken care of. Regulations of driving hours by the same body have also been taken to help control issues of people driving at odd hours under influence of drugs. These rules on driving times are also put to apply to drivers of international transit vehicle effective from their entry into the European Union territory. The regulations on driving time are however not applicable to some category of vehicles including some transit vehicle as well as military owed vehicles. The implementation of such rules is also reported to be facing challenges.²

Regulations of road transport have also been undertaken in a more basic way that is commonly recognized among a majority of countries. The use of signs on roads to communicate messages to road users has been a strategy in controlling the usage of roads. The regulations by use of road signs are effective in the sense that they give road users orders that are to be followed. In issuing the commands, the road signs act as controllers to the usage of the roads thereby being a regulatory element.³

Air Transport Regulations

Air transport has also been under strict regulation to ensure security as well as the safety of passengers aboard the planes as well as safety of planes from accidents and hijacking. A time long regulation of air transport has for example existed in the United States and its positive effects have been immensely felt. Successful regulations in the American domestic air transport have been credited with increased investment in the air transport industries in the country. Many airline companies have put more planes in the industry thereby giving customers a wide variety of product choice and an increased satisfaction in the services that they obtain from air transport industry. Another benefit of regulation of the air transport industry has been the stability that it has instilled in investing companies in the industry.

Before establishment of regulatory measures in the American airline industry, the mode of transport was run by individual small firms that were prone to economic instability. This led to occasional cases of bankruptcy that would be coupled with a number of losses to both the investors and customers. By eliminating small scale investing companies in the industry through motivated mergers and acquisitions, regulations ensured that investing companies in the air transport were in appropriate financial position to ensure that the airplanes in flight were in perfect conditions that were safe from accidents.

Organizations into stable companies in the air transport industry also enhanced their abilities to offer satisfactory services to customers. Regardless of reports of challenges and inefficiencies that the American airline regulations faced, a recommendable success was realized in their implementation such as the ones mentioned above.⁴

The power of the United States federal government to regulate the air transport system that is linked to the United States ports has significantly been effective in obtaining objectives of regulatory measures. Measures such as safety requirements, control of the air traffic and subsidies into the industry have been instrumental in ensuring stability in the American air transport industry, enhancing safety standards of people and goods aboard transit planes as well as controlling the issuance of government subsidies to airline companies.⁵

Specific regulations in air transport have also been established in individual countries subject to the countries’ regulations. In Canada, for example, airline regulatory legislation provide that any airline career company must have an insurance cover for any service that the company offers. Insurance covers are expected to include matters that pertain to “war, hijacking, noise, and pollution and aviation radioactive contamination among others”.⁶

Regulations in Canada also ensure that parties that wish to have their airlines operate in the country are subjected to financial scrutiny that is required to meet minimum requirements. It is also a regulatory requirement that any issuance of an aircraft by a party must be accompanied by a crew for that aircraft. The aim of the regulations such as necessity for insurance cover and financial disclosure is similarly to ensure that safety, ability to ensure that safety as well as the capacity to compensate customers in case of any loss. These again benefit consumers in terms of protection from poor services by flight companies.⁷

Regulatory measures in air transport are also used to determine the quantity and even type of services that are offered by flights in a given country. This way, a country can ensure “adequate levels of high quality, safe and secure airport facilities”.⁸ Regulations also take necessary steps to ensure that only safe commodities are allowed into airplanes on flights. Measures such as putting safety standards, ensuring effectiveness and efficiency in the application of set regulations together with knowledge of goods that are not safe for air transport has been identified as fundamental measures in the success of regulation of the air transport.⁹

Marine Transport Regulations

Regulations in the water transport system are equivalently broad to cover the safety of passengers and goods on board of a ship on transit. Measures such as requirements of adherence to weather conditions are meant to ensure the safety of the vessel against harsh marine conditions. A strict observance and adherence to these conditions ensure safe transportation and even docking of vessels. The same application of observation is essential in weather “restricted operations, motion response as well as strength and stability of marine transport vessels”.¹⁰ Regulations in marine transport are similarly oriented towards the safety of people on board and commodities being transported together with the ship itself.

Other reasons for regulations within countries are also meant to control the flow of specific goods into the countries based on the illegality or quantity control of the flow of the goods. Regulations in other modes of transport can be conclusively said to follow the same security trend as the objectives of the three discussed modes of transport. Other regulations in marine transport include a process of approving the “building and registration of ships”¹¹ licensing and the provision of marine zones.

Inefficiencies in Transport Regulations

Regulations are necessities that are fundamental in ensuring protection and security measures in the transportation sector. It has, however, been noted that just as the transport sector needs checks to ensure its efficiency, regulations of the transportation industry also needs to be balanced with economic demands that surround the transport sector. Over-regulation of the transport industry without considering other factors in the economy can downplay the security and other positive control objectives and lead to a collapsed or compromised industry. Regulatory measures, for example, make operations harder when the processes involved in regulation are costly and time consuming.

A step or a measure established to regulate a transportation industry may be too costly to an extent that it forces out some player in the industry due to economic infeasibility. A regulatory step that is not time considerate can also play a role in reducing transportation to a given destination which might in the long run ruin particular transportation vessel if the goods they were transporting are shifted to other destination following hectic bureaucracies in its original destination.

Such a case has been realized in “Europe’s air transport industry”.¹² Lack of uniformity in transport policies from one country to another is also a setback to transport regulations in the global sense. Differences in policies from one location to another can make the whole regulatory process to be confusing. A transporting agency will for example be required to understand all regulatory requirements in its entire destinations which might be as well hectic.¹³

The transport regulations have their net effects passed to other stakeholders such as brokers among others in the transport industry. Increased regulations in the industry could limit the operations these stakeholders or even face them out of the industry in measures to streamline the industry. The loss of these middle men will then have the effect of lost job opportunity for the brokers as well as the expertise that brokers offer in the industry. The customers or transport companies may not be well acquainted with statutory requirements in foreign countries, a fact that could make brokers a necessity.¹⁴

Possible Improvements to Transport Regulations

Regulations in the transport industry have received their success as well as a portion of failure. Great achievements have been made in the industry by the use regulatory measures that have so far ensured security and safety issues. Just like attempts in the United States to amend an act that regulates rail transport, policies governing modes of transport can be comprehensively revised and harmonized in a way that a uniform set of policies can be established to govern the transport industry.¹⁵ It has also been established that many countries and states have not yet developed substantial policies and steps to ensure security of their transport systems and industries. A move to develop anti-terrorist policies and measures to further enhance security in the transport industry would be a positive step to the industry.¹⁶

Conclusion

Even though significant measures have been taken to regulate the transport industry with great success in ensuring security and safety of people and goods being transported, there is still some inefficiency encountered as a result of these regulations. Some developments can be achieved if uniform and comprehensive regulations are established to complement the current regulations in the transport sector. More regulations should therefore be made in the industry to improve its services.

Bibliography

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Braithwaite, John & Drahos, Peter. Global business regulation. Cambridge, UK: Cambridge university press, 2008.

Coyle, Novack & Gibson, Bardi. Transportation: A supply chain perspective. New York, NY: Cengage Learning, 2010.

Department of Justice. “Air transport regulations (SOR/88-58).” Canadian government, 2011. Web.

European Conference of Ministers of Transport. Regulatory reform in road freight transport: proceedings of the international seminar. Paris, France: OECD Publishing, 2002.

Iata. “Dangerous goods.” IATA, 2011. Web.

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Mackenbach, Peter & Coolen, Michiel. “Study of the impacts of possible European legislation to improve transport security.” DNC CONSULTING, 2005. Web.

McKinnon et al. Logistics: improving the environmental sustainability of logistics. New York, USA: Kogan page, 2010.

Noble, Denton. “Guidelines for marine transportation.” Nobel Denton publication, 2009. Web.

Peachey, Kimberley. “over-regulation is stifling air transport”. Eera publications, 2009. Web.

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Footnotes

1. Iles, Public transport in developed countries, 403.
2. European Conference of Ministers of Transport, Regulatory reform in road freight transport, 25-29.
3. Braithwaite, Global business regulation, 438.
4. Wensveen, Air transportation, 46-47.
5. Ibid.
6. Department of Justice, Air transport regulations (SOR/88-58), 1.
7. Ibid.
8. AIC. Air transport regulation, 1.
9. Iata. Dangerous goods, 1.
10. Noble, Guidelines for marine transportation, 1.
11. Queensland. Transport operation, 1.
12. Peachey, Over-regulation is stifling air transport, 1.
13. McKinnon and others, Green logistics: improving the environmental sustainability of logistics, 287.
14. Williams, Challenges facing transportation logistics, 1.
15. Coyle & Gibson, Transportation, 195.
16. Mackenbach & Coolen, Study of the impacts of possible European legislation to improve transport security, 4.