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Deregulation and Shipping Industries Essay

Regulation in economy is a process characterized by control, monitoring and managing of rules, processes, operations and methods in order to obtain and yield more positive results and attain an environment that is more convenient to consumers and businessmen (Boyson). Deregulation, which is the opposite of regulation, when used in different aspects and sectors of business have affected directly and indirectly the various business industries and companies. For instance, transportation deregulation has greatly impacted the shipping industry here and around the world.

Changes are brought depending on how shippers used the systems of transportation. Globalization is a phenomenon the no one can deny is happening now. Industries and businesses are experiencing wide range of growth as they reach out different regions around the globe, and just like other businesses shipping and carrying industries have their eyes keen towards globalization. Thus a company, for instance, does not solely need to attend to its New York-Chicago transportation affairs, they now must also consider the inbound flow and tracking of ships from Asia and the outbound flow from other continents such as South America and Africa (Boyson).

For this reason, there now exists a growing complexity in the networks and channels of transportation systems. Furthermore a challenge to effectively manage and control the local goods combined with the imported products are also observed. The challenged that arises from the complexities of network transportation has then prompted authorities to regulate systems of transportations. The increasing number for international needs of inbound and outbound flow of logistics and shipments had yield to large number of trucks and carriers.

Authorities then deemed that a regulation that would minimize the increasing number of truckers and carriers that would enter and leave the US harbor is necessary and significant. Shipment and freight industries have seen enormous change and face lifts through the years. From the late 1970’s advocates of deregulation have called for the removing of federal economic regulation (Brenner). According to them by exposing freight and shipping industries to exit and entry regulation, industries failed to perform to their utmost potential. They are not able to maximize their resources as rate on inbound and outbound flow of shipments are controlled.

They call for a deregulation as they believed that industries can perform better with out these laws that hold and breathe down their neck. By lifting various regulations, competition industries can exists that eventually would leave to better service as they searched for different strategies and mediums that would satisfy their customers and followers. Attesting this claim was the significant growth experienced business growth in terms of volume by the shipment and trucking companies under the deregulated market, from 1982 up to 1997 (Brenner).

With deregulation, rates in which the companies provide their services are also lowered. This event happens as more ships are made available to travel and with ease of entry restrictions. Companies do not have to require large fees as the risks of inability to dock or set sail is stricken off. Circuitous routes made the shipping vessels are also eliminated which provides ease and convenience to the industries. Furthermore, deregulation encourages freedom in pricing. As a result, lower rates are observed. Deregulation laws in transportation have impacted the shipping industries greatly.

From the structure and functions in how companies delivered their services up to the vision they gladly want to fulfill. However, of all those encouraging results obtained from deregulation none could be more important to its affect to the flow of goods here and abroad. With the deregulation, sufficient supply of goods is stimulated locally and internationally which has major effect in international commerce. Work’s Cited Boyson, S. Managing Effective Third Party Logistics Relationships: What Does It Take? Journal of Business Logistics . 1999. Brenner, M. A. World Seatrade Service. New York, NY: McGraw-Hill Companies. 1999.


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