SCM 373 Lecture Notes - Lecture 4: Staggers Rail Act, Freight Forwarder, Dangerous Goods

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6 Feb 2017
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Transportation: Infrastructure
Agenda
Regulations
Modes
Evolution of Transportation
Transportation Infrastructure- Participants
Shipper and consignee have a common interest in moving goods from origin to destination
within a given time at the lowest cost
Carriers desire to maximize their revenue for movement while minimizing associated costs
Agents (brokers and freight forwarders) facilitate carrier and customer matching
Brokers
Freight forwarder
Government desires a stable and efficient transportation environment to support economic
growth
Public is concerned with transportation accessibility, expense, and standards for security, safety
and the environment
Transportation Infrastructure-Regulation History
I 8’s, rise of steaships ad railroads reated iese ealth ad oopolies
e.g. Coodore Vaderilt ad the railroad aros 
Interstate Commerce Commission (ICC) created in 1887 to oversee regulation of interstate
transportation
To stop the railroad monopolies
By 1970, ICC had oversight on 100% of rail and air, 80% of pipeline, 43% of trucking and 6% of
water carrier operations
Transportation Infrastructure-Deregulation History
Motor Carrier Act of 1980 deregulated the motor carrier industries
Entry restrictions for new businesses were relaxed
Restrictions for types of freight and range of services were abolished
Individual carriers were given the right to price their services
Trukig idustry’s olletie rate-making practices were abolished
Staggers Rail Act of 1980 deregulated the rail industry
Provide railroad management with freedom necessary to revitalize the industry
Rail carriers were authorized to use selective pricing to meet competition and cover
operating costs
Carriers given increased flexibility with respect to surcharges
Contract rate agreements between individual shippers and carriers were legalized
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Rail management given liberal authority to proceed with abandonment of poorly
performing rail service
Government Regulation
DIRECT. Economic Regulation: Seeks to make transportation equally accessible and economical
to all (Declining)
Government created (and maintains most) infrastructure (roads, canals, ports)
Intended to prevent carriers from taking advantage of shippers while ensuring long-
term financial stability for carriers
International Transportation still heavily regulated
INDIRECT. Social Regulation: Measures to protect public safety and environment (On the rise)
US Department of Transportation (DOT) (1966) has active role in hazardous material
safety and driver safety
HAZMAT Transportation Uniform Safety Act (1990) took precedence over state and local
regulations
HOS Regulations: Driving-Time Limits/Hours-on-Duty Limits) Compliance July 2013)
Transportation Regulation Today
Stimulated by technology and global issues
Electronic Signatures in Global & National Commerce Act (2000)
Gave digital signatures legal status
Patriot Act of 2001
Increased inspections at ports, airport security, and increased security at border
crossings
Continued Dumping and Subsidy Act
Fies for artifiial uderpriig ad dupig of foreig goods i U“ arkets
Jones Act
Only US-built ships operating under a US flag with US crews can ship goods directly from
a US port to another US port
Transportation Structure
Consists of rights-of-way, vehicles, and carriers operating within five basic modes
A mode identifies a basic transportation method or form
Rail
Highway
Water
Pipeline
Air
Transportation Infrastructure-Rail
Track mileage has declined by over half since 1970
Traffic shifted from broad range of commodities to hauling specific freight in traffic segments
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