U.S. Transportation Economic, Safety & Compliance Rules

Introduction to U.S. Transportation Regulation

The U.S. Department of Transportation is primarily responsible for implementing safety, economic, and compliance frameworks in collaboration with its constituent agencies. Regulation of the transport sector was first implemented through railway regulation in 1887 and later in 1906 following John D. Rockefeller's use of pipelines as a strategic resource to monopolize the oil industry. Regulation of the trucking industry was introduced in 1935 to provide stability in the sector's financial and operational management. Transportation, both locally and internationally, has a significant impact on the national and global economy due to its interdependence with the supply chain system. Ensuring safety across private and public means of transport is equally critical given the hazards that arise from inadequate regulation or compliance.

Economic Regulation and Compliance

In 1994, the National Road Transport Commission (NRTC) formulated compliance principles, strategies, and objectives focused on maximizing compliance cost-effectively and equitably. The objective of these compliance strategies is to examine areas where the standards stipulated in transport regulation fall short of optimal expectations in safety and cost-effectiveness. The government often attempts to pursue multiple objectives simultaneously in the public sector, including service coordination, multimodal transport coordination, safety, environmental protection, cost minimization, and the regulation of service quality standards (Perlman et al., 2021).

In the 1980s, the government held a monopoly over the provision of transport services — air, maritime, road, rail, and inland waterways — at the national, international, and regional levels. While railway and air transport were government-held and controlled, maritime and road transport were government-regulated but operated predominantly by private entities. Notably, the government still regulated prices, use of public infrastructure, and quality and safety standards in both the public and private sectors.

Government control was perceived to give the administration leverage to realize multiple policy objectives simultaneously. However, this approach proved uneconomical, as regulating prices to keep fares low may have worsened poverty by reducing the availability and quality of services (Rezapour Mashhadi et al., 2017). Consequently, strategic changes were made to the NRTC's principles, strategies, and objectives to establish independent mechanisms addressing economic goals — such as environmental impact — that the government had previously pursued through transport regulation (Savage, 2006). Regulation in such areas has since been achieved through technical and operational standards and the imposition of taxes rather than direct market control.

Deregulation, Market Control, and National Interests

While market control regulation has been lifted for railroads and trucking, it remains in place for ocean shipping. The international interface between national and international travel — particularly air transport — directly affects the economy, making all countries eager to regulate such modes of transport. Efforts to extend deregulation and achieve optimal economic outcomes are challenged by national interests in securing economic sovereignty (Perlman et al., 2021).

For marine transport, shipping carriers hold conferences to determine fixed rates, establish joint services, and pool cargo. Carriers are exempted from U.S. antitrust laws provided that agreements reached at such conferences are filed with the Federal Maritime Commission (FMC). However, the FMC retains the authority to review and challenge agreements and tariffs deemed harmful. These arrangements are governed by the Shipping Act of 1984.

Regulation of different transport modes serves as a critical mechanism for maintaining national economic function. In maritime transport, efforts to implement the Jones Act — supported by unions — were justified as necessary to maintain the national flag capacity required for national defense. However, shippers who benefit from greater freight capacity opposed the proposed act (Waycaster et al., 2017). The Transportation Research Board (TRB) committee suggested encouraging state-led projects to increase coastwise shipping, thereby reducing truck traffic across coastal cities. The deregulation of rail and trucking delivered strategic public benefits while simultaneously risking reductions in work opportunities for local communities and firms.

Safety Regulation and Enforcement

Safety across different modes of transport is a matter of paramount importance, as governments bear the responsibility of ensuring the safety of their citizens. Motor vehicle crashes are estimated to cost the United States $44 billion annually. The core concerns arising from inadequate safety regulation or compliance include death, property loss, and injury (Rezapour Mashhadi et al., 2017). For example, violations of traffic rules result in citations that are effective in some cases but ineffective in others at protecting motorists and pedestrians alike. Many accidents result from unsafe or illegal driver behavior — including speeding, following too closely, and distracted driving. Nevertheless, citations for poor driver behavior, such as failure to wear a seatbelt or speeding, combined with consistent enforcement by the relevant authorities, have significantly reduced the number of crashes.

The Department of Transportation considers safety its top priority. In coordination with the policy development office, performance coordination, strategic planning, and the federal agencies tasked with transport-related oversight, the DOT oversees the development and implementation of safety-related activities (Perlman et al., 2021). Core areas of focus include human behavior — through regulations designed to monitor and mitigate human error — as well as drivers' health and risky behaviors that could jeopardize the security of pedestrians and other road users (Waycaster et al., 2017). New technologies effective in monitoring, preventing accidents, and aiding motoring have been incorporated into regulations in a complementary manner. Enforcement is achieved through coordination among local, state, and federal governments by establishing statutory authorities that enable Operating Administrations to exert meaningful influence over safety outcomes.

Conclusion

The transport system works collectively towards realizing both the economic and non-economic benefits these systems provide to the nation. Consequently, a strategic approach to management, construction, regulation, operation, and enforcement of rules needs to be conducted in coordination with the relevant agencies to ensure the effectiveness and reliability of such systems.

Government control was perceived to give the administration the leverage needed to pursue multiple policy objectives simultaneously. However, this approach proved uneconomical, since regulating prices to keep fares low may have worsened poverty by reducing service availability and quality. Therefore, frequent reviews of the impact of regulations and government policy should be conducted to avoid compromising efficiency and safety.

References

Perlman, D., Bogard, D., Anita, K., Antonio, S., & Epstein, A. (2021). Review of the Federal Motor Carrier Safety Regulations for Automated Commercial Vehicles: Preliminary Assessment of Interpretation and Enforcement Challenges, Questions, and Gaps. Review of the FMCSRs for Automated Commercial Vehicles, 17(13).

Rezapour Mashhadi, M., Saha, P., & Ksaibati, K. (2017). Impact of Traffic Enforcement on Traffic Safety. International Journal of Police Science & Management, 19(4), 238–246.

Savage, I. (2006). Economic Regulation of Transport: Principles and Experience [Ebook]. International Handbook on Economic Regulation. Retrieved December 1, 2021, from https://faculty.wcas.northwestern.edu/~ipsavage/210-manuscript.pdf

U.S. Transportation Regulations. Joc.com. (2021). Retrieved December 2, 2021, from

Waycaster, G., Matsumura, T., Bilotkach, V., Haftka, R., & Kim, N. (2017). Review of Regulatory Emphasis on Transportation Safety in the United States, 2002–2009: Public versus Private Modes. Risk Analysis, 38(5), 1085–1101.