Freight Transportation Regulation And Challenges For NTC

Transport and Freight Regulations

Discuss about the Freight Transportation Regulation and Challenges for NTC.

Freight transportation is instrumental in playing a significant role pertaining to supply chain as it helps in the process of delivering of products along with services. The changes in the global platform has huge impact on the arena of logistics environment. Proper management of that of freight transportation has become imperative in the present age. Logistics services helps in supporting the movement of that of materials from inputs with the help of production to that of the consumers. It comprises of the physical activities like that of transport along with that of non-physical activity like that of supply chain design. This essay analyses how the changing regulations pertaining to freight regulation poses to be a challenge for that of current freight transportation.

The current regulatory approach across Australia makes use of direct government regulation with the help of prescriptive tools within the sector of road freight. The rules that apply to vehicles and they have different kinds of aims like safety along with that of asset protection. According to Hitchins, Castor and Freer (2015), the current methods pertaining to National Transport Commission (NTC) act as direct method pertaining to regulation. Direct government regulation can help in providing high level of that of control by making use of prescriptive methods. Direct government regulation will not need much from the industry and industry is supposed to abide by a standard set. The pricing in relation to road access is at the present age determined by Australian Transport Council (ATC) that follows the recommendations of that of NTC. The charges are on the basis of average of the road expenditure of the last three years. The charging instruments are that of registration charge along with that of fuel charge. The registration charge is paid to the Territory treasures and the fuel charge is paid to that of Commonwealth. It is paid by taking recourse to diesel excise. NTC is reviewing the pricing policy by the help of fourth pricing determination. It has been stated by SteadieSeifi et al. (2014) that the current pricing tools along with regulations can only help in providing partial solutions as the road infrastructure is neither costed nor is it priced on that of a comparative basis. There exist no linkage between that of pricing and that of the supply of infrastructure. The dearth of that of direct pricing system suggests that the road managers does not have much incentive to supply high productivity vehicles.

Direct Government Regulation

According to Ross et al. (2015), current prescriptive process pertaining to heavy vehicles occurs with the help of Australian Design Rules. This process is dependent on prescriptive standards that is combined with that of performance standard. The prescriptive standards are rigid in terms of definition. They can be applied to the generic type of the vehicles. The industry is continuously facing the issue of technology change along with that of high variable customer need. The road infrastructure is not at all homogeneous. It has been stated by Alexander and Merkert (2017) that the prescriptive vehicle standard result in different kinds of standards that does not allow maximum productivity. They have been designed for the protection of critical points pertaining to infrastructure. The prescriptive standards act as the proxies in relation to safety along with that of asset protection outcome. They help in providing clarity within the sophisticated industry. They may help in the process of effective enforcement but they are based on poor understanding pertaining to relationship between that of performance standard and that of desired outcome. According to McFallan and Higgins (2016) there are issues that involve progression pertaining to standard accreditation along with that of harmonisation. The operations within that of prescriptive framework ‘as of right’ can be carried out till a breach of standard is brought out with the help of an enforcement agency. It can be said that there are consistency in relation to the rules that apply that provide for seamless operation in between the state borders. It has been stated by Ghaderi, Fei and Cahoon (2015), that the reduced confidence can lower the incentives in relation to innovative solutions. It can be stated that beyond that of ‘as of right’ framework there will be less consistency along with that of limited mutual recognition. Dearth of the factor of consistency along with that of mutual recognition can pose restraints.

According to Liang et al. (2016), the NTC has stated that key weakness in relation to land transport regulation are related to that of process as compared to that of specific reforms. The weaknesses that exist in relation to regulations is on obtaining agreement on that of a reform that risk a low common denominator outcome. There are inconsistencies pertaining to implementation that can prove to be a hurdle in relation to regulations. The willingness of making joint decisions can help in the automatic recognition of processes. NTC model mainly aims at obliging to the jurisdictions but it does not have any power other than that of influence. It does not have much power so that it can ensure the approving of proposals. It has been stated by Bandeira et al. (2018) that the NTC can only report regarding any divergence to that of ATC and the ATC can take suitable action that can help in addressing the inconsistencies. This acts as a limitation in relation to the current reform process. According to Cui, Dodson and Hall (2015), the timing that is required for the implementation of national reforms can vary on account of difficulty in ensuring passage with the help of Territory parliaments. Local implementation can take a long time from six months to that of several years. The NTC agrees to the fact that divergence in relation to national model can help in retaining consistency within the arena of jurisdiction. National penalties can be proposed like that of model only but local variations can exist. It has been stated by Monczka et al. (2015) that the elements pertaining to enforcement reform can be designated as ‘desirable’ as compared to that of ‘essential’.

Challenges in relation to prescriptive vehicle standard

Difficulties in relation to consistency of the implementation can give rise to considerable frustration for NTC along with that of road transport industry of Australia. It is found that even when the reforms are implemented on consistent basis, the regulatory burden can prove to be onerous. It will require administrative process and other decisions that should be duplicated across that of jurisdictions (Silvestre 2015). This can cause to be an issue for the road vehicles along with that of the rail freight sector. Efficient process of decision making can improve the consistency of implementation.

Growth in that of the rail sector within Australia is dependent upon the factor of the government prioritising that of infrastructure investment. North-south rail corridor can be said to be uncompetitive on account of the factor of poor reliability. 20 % of the overall goods is transported with the help of rail specially between that of Melbourne along with that of Sydney (Hitchins, Castor and Freer 2015). The operators face challenges pertaining to the funding of infrastructure that can help in meeting the growth pertaining to rail freight. The GFC has resulted in distressed state of the shipping industry. A large number of vehicles has resulted in a competitive market that has a bearing on the margins of the operators. Market challenge has been created because the wages have forced the operators to register the vehicles in that of overseas jurisdictions (Silvestre 2015). The management of the industrial relations can pose to be a challenge for the operators. An accident that took place in Sydney in October 2013 involved that of Cootes fuel tanker. It clearly showed that safety concern can have effect on that of the operator of the revenue. The large operators can defray the compliance cost across that of an asset pool. The small operators face the compliance cost and they do not have the ability of recovering them with the help of higher rates.

Conclusion:

The pricing tools of the present in Australia can help in the process of providing of solutions on a basis that is comparative. It can be stated that there does not exist any kind of relation between pricing and that of supply of infrastructure. Lack of direct pricing system means that the managers of the road cannot provide incentive to the high productivity vehicles. The different regulations and standards that exist does not facilitate the process of maximum productivity. The regulations have been designed for protecting critical points in relation to infrastructure. The primary aim of NTC is abiding by the jurisdictions and it only has influence. It cannot approve the different kinds of proposals. Divergence pertaining to ATC can be reported by NTC and suitable measures taken by ATC can address different kinds of inconsistencies. The difficulties in association with implementation can cause frustration for the NTC. It can be said that even when the reforms are implemented consistently but the regulatory burden can be burdensome. Administrative process along with that of other decisions being duplicated through the jurisdictions can help in dealing with the changing regulations.

The conditions pertaining to competition along with pricing of the freight forwarders should be regulated that can help in dealing with the changing regulations. Common carrier obligation in relation to railways should not be practiced in freight transportation. The attainment of economic efficiency will need both regulation along with competition which can help in removing some of the barriers. The non-economic regulation in relation to road transport should be confined to the absolute minimum to overcome of the challenges pertaining to freight transportation.

References:

Alexander, D.W. and Merkert, R., 2017. Challenges to domestic air freight in Australia: Evaluating air traffic markets with gravity modelling. Journal of Air Transport Management, 61, pp.41-52.

Bandeira, R.A., D'Agosto, M.A., Ribeiro, S.K., Bandeira, A.P. and Goes, G.V., 2018. A fuzzy multi-criteria model for evaluating sustainable urban freight transportation operations. Journal of Cleaner Production, 184, pp.727-739.

Cui, J., Dodson, J. and Hall, P.V., 2015. Planning for urban freight transport: an overview. Transport Reviews, 35(5), pp.583-598.

Ghaderi, H., Fei, J. and Cahoon, S., 2015. The impediments to the competitiveness of the rail industry in Australia: the case of the non-bulk freight market. Asia Pacific Journal of Marketing and Logistics, 27(1), pp.127-145.

Hitchins, D., Castor, T. and Freer, D., 2015, July. Understanding the Queensland freight challenge and why our national highways will continue to be an essential part of the overall freight solution. In Australian Institute of Traffic Planning and Management (AITPM) National Conference, 2015, Brisbane, Queensland, Australia.

Liang, K.Y., van de Hoef, S., Terelius, H., Turri, V., Besselink, B., Mårtensson, J. and Johansson, K.H., 2016. Networked control challenges in collaborative road freight transport. European Journal of Control, 30, pp.2-14.

McFallan, S. and Higgins, A., 2016. Transit-Road Transport Tool for Mapping Freight Movements.

Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.

Ross, C.L., Amekudzi, A.A., Guhathakurta, S. and Welch, T.F., 2015. Freight Impacts on Small Urban and Rural Areas.

Silvestre, B.S., 2015. Sustainable supply chain management in emerging economies: Environmental turbulence, institutional voids and sustainability trajectories. International Journal of Production Economics, 167, pp.156-169.

SteadieSeifi, M., Dellaert, N.P., Nuijten, W., Van Woensel, T. and Raoufi, R., 2014. Multimodal freight transportation planning: A literature review. European journal of operational research, 233(1), pp.1-15.