Impacts of Transportation Regulation vs Deregulation


Regulation and deregulations have significantly affected the transport sector, especially in business logistics (Hazen & Lynch, 2008). Regulations are measures put in place by the government that are used to protect the wider public from any exploitative activities by transport companies and other players in the private sector.  The government puts up laws that prevent any violation of consumers’ rights. Deregulation usually involves the removal of various legislation and rules that affect the operations of companies especially those that are private. Therefore, regulation of transport, especially about business logistics, means putting in place measures to protect the consumers while deregulation is the removal of those laws and therefore government involvement is removed.

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Regulation mostly deals with the issues affecting the social and economic fabric of a country. One such factor is transportation. The transport sector covers a larger section of the country and, therefore, deals with a lot of goods and services that come into the country or that are moved into the country from state to state for example. The regulation thus is made to protect the consumer and to ensure that they obtain only those goods that benefit them and not those that harm them (Coyle et al., 2012). As such, the government has the initiative of setting up laws to ensure that transportation in the country follows the laid down procedures and as a result, protect the public. The regulation further comes in place, especially where various transportation companies limit other competitors create monopolies that further hurt consumers especially rail and air transport. Therefore, the government steps in to ensure that it prevents different companies from taking over the whole market and further protect the consumers from high prices.

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Deregulation, on the other hand, helps the transport sector pick up especially when it was doing dismally. The poor performance is therefore boosted because of the deregulations that help the businesses involved to expand. Some regulations may, therefore, hurt some industries especially when an unfavorable climate is created by the regulations indirectly. As such major transport like railroads, trucking and airlines to name a few were deregulated to ensure that they did not depend on the government for subsidies and as such have more independence in their operations to ensure that they help build the economy. Furthermore, the consumers would get lower prices because of the competitive environment created by deregulation. Better quality is assured due to the existing competition and as such, consumers benefit further. In addition, deregulation removes the involvement of the government in the private sector. The private sector can thus set up transport system and expand their operations to other countries or within the country. The sole purpose of deregulation is to provide a boost to the economy of the country.

Globalization has had varying effects on regulation. Globalization in business logistics encompasses enormous transport of goods (Coyle et al., 2015). Transportation in global terms is vast as various means of transport are used which include air, road, water and rail transport. The transport systems are in different countries since the goods move through different countries before they reach their destination. Different countries have varying laws that they set to control business operations of international companies.

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The international companies further come from countries that operate differently from the various branches that belong to the business. Countries, therefore, have to change on how they make the regulations to ensure that they do not make global companies shun away while at the same time protecting their citizens from any exploitation by the companies. Moreover, Globalization has changed regulation versus deregulation in various countries. It is hard to adapt to different regulatory measures in the different countries as the company may either suffer under regulations that limit its activities due to the fear of monopolization, or deregulation, which may deny an ailing business support from the government.

Various countries have different ways of regulating the transport sector, and therefore, a company will have to adapt or leave doing business in the country eventually. Different deregulations may further create more space for the firms that are in foreign countries especially in places where operations are cheap to carry out (Ross, 2015). Transportation is thus made accessible as the companies are given more space to expand and thus further help to grow the economy as a result. Deregulation further helps the company to stretch itself to the limits and, therefore, study the market to come up with measures that will help in ensuring that the business is not left in shambles but is stable. Regulation, on the other hand, may help protect the consumer but affect the business operations and the potential to expand.

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Consumers have significantly benefited from regulation and deregulation. Business logistics are significantly affected by the transportation in place. Therefore, any disruption, especially by regulation, can be catastrophic to various companies especially those that rely on individual businesses that have expanded over time and edged out others. Regulations have benefited the respective consumers by ensuring that they can access different transportation according to service and quality.

Regulations may be put in place to prevent any expansion due to the fear of such a company becoming a monopoly. Consumers, as a result, may miss goods services and products, which would have significantly helped the consumers largely. Regulation, for example, ensures that the various companies especially those dealing with foodstuffs ensure that they do not provide dangerous substances in the products. Some of the products, therefore, have to be checked by the various regulatory bodies before they are allowed into the public domain. Regulations, therefore, protected the consumers from unscrupulous behavior that companies may engage in especially in making speedy profits and therefore compromising on the products and the lives of the consumers. Deregulation helps the consumers greatly in that as the private sectors expand with no government intervention it has space to provide quality goods while at the same time having space for expansion and thus reaching to a larger part of the consumers than before (Manzini & Accorsi, 2013).

Regulation versus deregulation is thus necessary for that it helps in checking the various transport companies. Regulations and deregulations can be carried out simultaneously at different times to suit the various situations affecting the country at a specified period. As such, states and their respective governments should ensure that they only use the regulations and deregulations when the circumstances are dire. As such, the government can employ regulation to deal with exploitation of companies in the transport sector like airlines or deregulation in cases where the government wants to boost the economy. The government in such a case cannot put forth any regulations since they would still hurt the economy when it is time to deregulate. Governments concurrently employ the use of regulations and deregulations to ensure that the various issues that affect the economy and in particular, the consumers are dealt with accordingly.

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