OMGT 2103 - Analyzing the Impact of Changing Freight Regulations

This essay examines the implications of changing regulations and policies in freight transportation, focusing on both domestic and global contexts. It discusses the historical responsibilities of governments in freight transportation, the impact of policy changes on freight capacity, and the challenges faced by the industry in Australia. The essay also addresses issues such as truck size and weight regulations, rail market power, international air cargo competition, border congestion, and external costs of freight transportation. Recommendations are provided to improve efficiency, reduce barriers to market entry, manage external costs, and increase competition in the global air cargo system. The analysis concludes that government programs and policies significantly influence freight capacity, and critical issues extend beyond infrastructure spending to include operating practices, regulation, and fee structures. Desklib provides access to this essay along with a wealth of study resources to support student learning.

Running head: FREIGHT MANAGEMENT
Freight Management
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Abstract
Freight transport is one of those concepts that has gained much research attention in
the last few decades and more often they are from the perspectives of the transport buyers.
The domestic and the global regulations and policies in this field too keeps on changing and
they do influence the overall business a lot. The main aim of this paper is to explore the
implications of the changing regulations and policies in the freight transportation.

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Table of Contents
Abstract......................................................................................................................................1
Background................................................................................................................................3
Introduction................................................................................................................................3
Implications of the challenges and discussions..........................................................................3
Recommendations......................................................................................................................6
Conclusions................................................................................................................................7
References..................................................................................................................................8

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Background
Freight transport refers to the physical process of transporting the merchandise goods
and commodities and the cargo. It refers to the complete movement of the goods and
commodities by making use of the inland transport on a provided network (Liimatainen et al.
2014). The Freight transportation in Australia is a mixed private and public enterprise- the
government of the country construct and operates the infrastructure of the inland waterway
systems and the highway along with the major components of seaport and airport
infrastructure. It regulated the transportation companies. The private sector companies
provide rail infrastructure as well as the parts of the other infrastructure of the modes and
most of the vehicles and then sell the services to the shippers (Liu, Wang and Wilkinson
2016). In such a complex environment, it becomes very vital to define the scope of the
responsibility of the government as well as to analyse how the actions of the local
government impact the provision of the capacity by the public and the private sectors.
Introduction
As discussed above, the Freight transportation in Australia is a mixed private and
public enterprise. This report shall present a brief analysis of different regulations and
policies in the industry of freight transportation, both globally and domestically. The paper
shall further discuss about the challenges that this business faces being in Australia and its
overall implications.
Implications of the challenges and discussions
The disputes over the public policy issues in regard of the freight transportation
basically begins from the difference in the perceptions of proper role of the government in the
sector. The 1998’s TRB study- “Policy Options for Intermodal Freight Transportation” have
examined the responsibilities of the government in the freight transportation (Gong, Nault

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and Rahman 2016). It has described the historical responsibilities of the government for the
purpose of operation, construction, finance of the transport facilities as well as the regulations
of the private sector transportation companies have also differentiated among the freight
modes and also have evolved with the passage of time. The former TRB committee has also
analysed the issue of defining the government responsibilities.
Freight transportation is a continuous joint venture of the private sector firms and the
government. The adequacy of the freight capacity as well as the performance of the system in
the coming years would both depict the results of the decisions of the government on many
regulatory, operational and spending issues which takes place in the course of administering
the already developed programs (Lim 2017). The continuous changing of the policies and
regulations by the government globally has often seem to in script the narrow concerns as
well as are directed by the short run considerations. The authorities of decision making is
dispersed and the decision are both federal and state responsibilities. At the federal level, they
comprise the programs that are been administered by different agencies and are been
governed through the numerous legislative acts.
As per the recent regulations, the limits of the carrier has been increased and it is
unacceptable as because the accident and the cost of the maintenance and highway
construction gets increase in such and the railroads have weakened. With the same, the
comfort and the convenience of the motorists too have been reduced by this. The earlier DOT
and TRB studies have concluded that the liberalisation would yield the total benefits
(McAleer, Suen and Wong 2016). The weight regulations and the truck size have directly
affected the capacity of the freight of the highway system. Increasing the limits have allowed
a given quantity of the ton miles to be produced with lesser truck miles. With the same, the
differences in the standards of the truck among the Australia and all its trading partners have
hindered the international or the global commerce.

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Furthermore, since the Staggers Rail Act 1980, the economic regulations of the
railroads have highly decreased but government has retained the lapse of the rates of rail for
preventing the railroads from practising monopoly pricing power in the markets where the
competition is very weak (Burton 2015). The merger of the Railroad are also subject to the
Surface Transportation Board review. As the passage of the act, the disputed have taken place
in between the customers and the railroads over the level of requirement for protection of the
shippers from the rail market power. It is also to mention that the recent ensuing service
issues and rail mergers have increased the visibility of this problem. There are some shippers
and some competitors who have successfully opposed the proposal of the recent major rail
merger. The federal regulatory policy have high implications for the rail freight capacity.
With the same, the global air cargo is likely the most regulated major freight market.
The global competition is directed as well as governed by the system of bilateral treaties
which regulated the passenger traffic. These treaties restricts the landing rights, the sabotage
and the nationality of the ownership as well as the other aspects of the operations (Ehie and
Gilliland 2016). Also, the growth in the freight traffic among the Australian regions has
resulted in serious congestion at the border crossings as well (Williams 2016). Facilitating the
freight flows at the boarders would demand more administrative changes in the various
jurisdictions and agencies comprising of the immigration authorities and customs as well as
the state regulatory agencies and the private and public infrastructure improvements.
Moreover, the comparisons of external costs of the different modes of fright have
taken on expanding the eminence in the discussions of the government freight policy. The
external costs of the fright transportation are the costs that the carriers and shippers do not
basically bear but that are borne instead by the others (Austin 2015). The external costs of the
freight shipment comprise of the cost of congestion, accidents and pollution that are formed
by the shipment beyond the portions of the costs borne by the carrier as well as the shipper.

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Recommendations
 If the Australian limits were liberalised, an efficiency gain will be then assured only if
each of the user fees of the truck would cover the cost of the use of the roads by them.
Or else, increasing the limits can give rise to the uneconomic demands on the
Australian road system and would also render the highway agencies less able to afford
the construction and maintenance.
 Governing the national cargo could be a better alternative, as is trade in the other
international services like that in banking and telecommunications, by multilateral
free trade agreement.
 The international agreements for reducing the barriers to the market entry, ownerships
and sabotage would flourish the competition. A proposal for these kinds of
agreements have been made by the International Chamber of Commerce and the other
international business groups. In such proposal, the international air cargo could be
liberalised without changing the prevailing rules for governing the passenger
transport.
 The external costs are pertinent to the capacity problem of the freight in many ways.
If these costs were managed in better ways, by means of more cost effective
regulation, through internalising the external costs through the technological or
pricing breakthroughs. In this way not only the freight transportation would become
more effective but also the pattern of the future development along with the increase
of the system would be changed side by side.
 Increased competition and increase in the carrier flexibility would yield the same
progresses in the efficiency in the field of global air cargo system as they have in the
other transportation sectors. The increase in efficiency means that there would be
better use of the prevailing capacity. Furthermore, the lower costs would result in

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more air cargo, but the system will be better able to respond to the growing and
increasing demand.
Conclusions
Hence, from the above discussion it can be concluded that the system of freight
transportation is influenced by the different government programs that are housed in different
federal agencies and in the state governments. The forthcoming decisions on the
management, funding levels and the structure in these programs would have vital
consequences for the progress and growth of the freight capacity. The challenges in the
management of freight transportation ranges from the technical program details to the most
basic question of the actual role of the government in this sector. However, it is also to state
that the above discussion is not confined only to infrastructure spending. Instead the critical
issues also added in the operating practices, regulation and the fee structures. The Australian
policy on the domestic and international trade do affects the freight capacity since the
infrastructure supplement and the foreign carriers and would compete with the Australian
capabilities.

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References
Austin, D., 2015. Pricing freight transport to account for external costs. Congressional
Budget.
Burton, M.L., 2015. Existing Railroad Oversight and Proposed Policy Change: An
Application of Results-Based Regulation. Transp. LJ, 42, p.153.
Ehie, I.C. and Gilliland, D.L., 2016. Use of quality management tools to analyse delivery
exceptions in the motor carrier industry: a case study. International Journal of Productivity
and Quality Management, 19(1), pp.1-20.
Gong, F., Nault, B.R. and Rahman, M.S., 2016. Research Note—An Internet-Enabled Move
to the Market in Logistics. Information Systems Research, 27(2), pp.440-452.
Liimatainen, H., Kallionpää, E., Pöllänen, M., Stenholm, P., Tapio, P. and McKinnon, A.,
2014. Decarbonizing road freight in the future—Detailed scenarios of the carbon emissions
of Finnish road freight transport in 2030 using a Delphi method approach. Technological
Forecasting and Social Change, 81, pp.177-191.
Lim, L.Y., 2017. The evolution of Southeast Asian business systems. Business, Government
and Labor: Essays on Economic Development in Singapore and Southeast Asia, p.243.
Liu, T., Wang, Y. and Wilkinson, S., 2016. Identifying critical factors affecting the
effectiveness and efficiency of tendering processes in Public–Private Partnerships (PPPs): a
comparative analysis of Australia and China. International Journal of Project
Management, 34(4), pp.701-716.
McAleer, M., Suen, J. and Wong, W.K., 2016. Profiteering from the Dot‐Com Bubble,
Subprime Crisis and Asian Financial Crisis. The Japanese Economic Review, 67(3), pp.257-
279.

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Williams, M.J., 2016. 11. Multimodal freight transportation security in Brazil. Multimodal
Transport Security: Frameworks and Policy Applications in Freight and Passenger
Transport, p.160.