Freight Management: Pricing, Transport, And Regulations

Discuss about the Freight Management for Pricing Freight Transport.

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.

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 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.

Recommendations

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.

• 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 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. 

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.

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.