Economic Safety and Compliance Regulations in the Transportation Sector

Transportation Economic, Safety, and Compliance Regulations

The U.S. Department of Transportation is primarily responsible for implementing safety, economic, and compliance in collaboration with the respective departments. Regulation of the transport sector was first implemented through the railway regulation in 1887 and later in 1906 after John D. Rockefeller’s use of pipelines as a strategic resource to monopolize the oil industry. Regulation of truckers was regulated in 1935 to provide stability to regulate the industry’s finance and operational management. Transport locally and internationally impacts the national and global economic impact due to its interdependence with the supply chain system. Further, ensuring the safety across private and public means of transport due to the accrued hazards for the lack of regulations or compliance.

Economic Regulation and Compliance

In 1994, the National Road Transport Commission (NRTC) formulated compliance principles, strategies, and objectives focused on maximizing compliance with cost-effectively and fairly compliance. The objective of the compliance strategies is to examine areas where the standards stipulated in the regulation of transport do not meet the optimal expectations in safety and cost-effectiveness. The government often attempts to secure different objectives simultaneously in the public sector, such as service coordination, multimodal transport coordination, safety, environmental protection, minimizing costs, and regulating the standard quality of service (Perlman et al., 2021). In the 1980s, the government held the monopoly of providing transport services, air, maritime, road, rail, and inland water, across the national, international, and regional levels. However, while the railway and air transport were government-held and controlled, the government-controlled maritime and road transport but these modes operated predominantly privately. Notably, the government still regulated the prices, use of public infrastructure, quality, and standards in both public and private sectors.

Government control was perceived to render the administration leverage that aided in realizing multiple objectives in government policy implementation. However, this strategic approach was uneconomical since the regulation of prices to keep fares low may have accentuated poverty by reducing the availability and quality of services (Rezapour Mashhadi et al., 2017). Consequently, there have been strategic changes to the principles, strategies, and objectives stipulated by the NRTC to establish independent strategies to address some of the economic objectives that the government attempted to achieve through regulation of the transport sector, such as environmental impact (Savage, 2006). Regulation in such areas has been achieved through technical and operational standards and imposition of taxes, or lack thereof, rather than use market control.

While the regulation employed in market control was lifted for railroads and trucking but are still existent in ocean shipping, the international interface between national and international means of travel, such as air transport, directly impacts the economy; thus, all counties are keen to regulate such modes of transports. Efforts to lift the deregulation to achieve the optimal economic effects that are limited due to some regulations that limit the efficacy of air and marine travel are challenged due to the national interest to secure their economic interest (Perlman et al., 2021). For marine transport, similar carriers conduct conferences to determine their fixed rates, establish joint services, and pool cargo. Carriers are exempted from the American antitrust laws if the requirements to file the agreements made at conferences are filed with the Federal Maritime Commission (FDC). However, the FDC still controls the nature of agreements and tariffs if they find they could be harmful. These regulations are governed by the Shipping Act of 1984.

Regulation of different modes of transport serves as a critical measure towards maintaining national economic functions. In maritime transport, attempts to implement the Jones Act, which was protected by unions, were justified to maintain the national flag capacity required for national defense. However, shippers benefiting from higher freight capacity opposed the proposed act (Waycaster et al., 2017). The Transportation Research Board (TRB) committee suggested encouraging state projects that would increase coastwise shipping to reduce the truck traffic across coastal cities. The implementation of deregulation of the rail and trucking transport had a strategic benefit for the public and risked the decrease in the work opportunities for local communities and firms.

The TRB and Congressional Budget Office (CBO) review of the taxes imposed on highway users reported that the gathered revenue could be used to maintain high infrastructure standards and effective use of highway use. Regulation of the motors designs and carrying capacity was made a core and strategic area to manage the expenses incurred by the government in the maintenance of the infrastructure. According to Savage (2006), the regulation of the railway industry has been lagging, which has resulted in chronic financial deficits as a result of the archaic pricing strategies. Poor examination and revision of the regulation and the lack of community representatives in the rail company boards resulted in the lack of an equitable pricing strategy. Vertical separation and competitive access were suggested by Savage (2006) as strategic approaches to ensure they were run as companies to recoup the investment capital and generate revenue to maintain the infrastructure and meet the operational expenses.

Safety Regulation and Enforcement

Safety across different modes of transport is an issue of paramount importance since it is the government’s responsibility to ensure the safety of its citizens. Motor vehicle crashes are estimated to cost the U.S. $44 billion annually. Core concerns about the hazards accrued to the lack of safety due to ineffective regulation or compliance are death, loss of property, and injury (Rezapour Mashhadi et al., 2017). For example, the violation of traffic rules results in citations that, in some cases, are effective. At the same time, in other instances, they are ineffective in enforcing the safety of motorists according to pedestrians. Notably, many of the accidents that occur result from unsafe or illegal driver behavior. For example, overspeeding, keeping a lower distance than recommended, and distracted driving. However, citations for the poor behavior of motorists, such as failure to wear a seatbelt or speeding and the enforcement of the issuing of the appropriate citations by the relevant authorities, resulted in a reduced in the number of crashes significantly.

Department of Transportation considers safety as its top priority. In coordination with the policy development office, performance coordination, strategic planning, and the federal agencies tasked with oversight over transport-related oversight, they oversee the development and implementation of safety-related activities (Perlman et al., 2021). The core areas of focus by the organization are human behavior, where they have developed regulations to monitor and mitigate human error, drivers’ health, and risky behavior that could jeopardize the security of the pedestrians (Waycaster et al., 2017). The new technologies that are effective in the monitoring and prevention of accidents and aid motoring have been adopted in regulations in a complementary manner. Regulation enforcement is enforced through coordination between local, state, and federal governments by establishing statutory authorities that facilitate Operating Administrations to have a powerful impact on safety.

Federal agencies that are critical in the enforcement of regulations play a critical role in realizing safety across different modes of transport by ensuring compliance with the stipulated regulations. For example, the Federal Highway Administration (FHWA) supports local and state governments during national highway infrastructure design, construction, and maintenance.

The Federal Maritime Commission (FMC) purposes of enforcing a competitive and reliable international ocean transportation supply system that supports and protects the U.S. economy and citizens, respectively (“U.S. Transportation Regulations,” 2021). This objective is accomplished by reviewing the agreements made among common carriers and the Marine Terminal Operators (MTOs). FMC also monitors Non-Vessel-Operating Common Carrier (NVOCC) arrangements to protect the nation against a negative impact on the maritime. In coordination with Maritime Administration (MARAD), it foresees the continuous interoperability of the national transport system and enforces compliance with the stipulated design of marine vessels.