THE TRANSPORTATION COMPANY: AN ECONOMIC ARGUMENT FOR THE INTERMODAL OWNERSHIP

TRANSPORTATION COMPANIES ARE DEFINED AS FOR-HIRE, COMMON CARRIES WHICH OWN AND HAVE THE RIGHT TO UTILIZE ANY OR ALL MODES OF TRANSPORTATION FOR THE INTERCITY MOVEMENT OF FREIGHT. ANY MODE OR COMBINATION OF MODES COULD BE USED FOR A PARTICULAR SHIPMENT IF IT WERE THE LEAST COSTLY ALTERNATIVE AT A DESIRED LEVEL OF SERVICE. PRICE AND QUALITY OF SERVICE MUST BE CONSIDERED TOGETHER AS THE TRANSPORTATION OFFERING WHERE QUALITY OF THE SERVICE IS A FUNCTION OF THE LANDED CONDITION OF THE GOODS AS WELL AS THE TIME INVOLVED FOR THE GOODS TO REACH THEIR DESTINATION. THE ADVANTAGES AND DISADVANTAGES ARE DISCUSSED OF INTERMODAL OWNERSHIP. THE DISCUSSION CONCLUDES THAT THE PRESENT REGULATORY SYSTEM SHOULD BE CHANGED TO ALLOW INTERMODAL MERGERS AND THE RESULTING FORMATION OF TRANSPORTATION COMPANIES TO BEST SERVE THE PUBLIC INTEREST. SHIPPERS WOULD RECEIVE EQUAL OR IMPROVED SERVICE IF THEY COULD DEAL WITH ONLY ONE FOR-HIRE CARRIER FOR ALL OF THEIR TRANSPORTATION NEEDS. THE BENEFITS OF ONE-STOP TRANSPORTATION PURCHASING WOULD BE FURTHER AMPLIFIED AS CONTAINERIZATION USE INCREASES. A TRANSPORTATION COMPANY WOULD ALLOW RESPONSIBILITY FOR MOVEMENTS TO BE HELD TO THE MINIMUM NUMBER OF FIRMS, THUS PROVIDING GREATER COORDINATION AND EFFICIENCY. COMPETITION AMONG CARRIERS SHOULD INCREASE. TRANSPORTATION COMPANIES COULD EXTEND INTO ONE ANOTHER'S TERRITORY THROUGH INTERMODAL MERGER. LONG-HAUL AIRLINES MIGHT COMPETE WITH TRUCKS AND RAIL THROUGH NEW COORDINATED MOVEMENTS. RESTRICTIONS ON OPERATING RIGHTS AND THEIR ATTENDANT MONOPOLY POWERS COULD BE REDUCED TO ACCOMMODATE THE COMBINATIONS. RAILROADS COULD THEN COMPETE WITH ONE ANOTHER INSTEAD OF BEING HELD TO EXCLUSIVE TERRITORIES. A CONTROLLING AGENCY SHOULD BE SET UP TO PREVENT MONOPOLY ABUSES AND TO PROMOTE INCREASE COMPETITION. THIS CONTROL COULD BE MINIMIZED THROUGH THE USE OF ANTITRUST LEGISLATION WITH REGARD TO MERGERS AND ENTRY AND EXIT AND CURRENT RATE REGULATION COULD BE REDUCED TO MINIMUM PRICE CONTROLS.

  • Availability:
  • Supplemental Notes:
    • Vol 46, No 3, PP 275-286, 1 FIG, 3 TAB
  • Authors:
    • Suelflow, J E
    • Hille, S J
  • Publication Date: 1970-8

Media Info

  • Serial:
    • Land Economics
    • Publisher: University of Wisconsin Press
    • ISSN: 0023-7639

Subject/Index Terms

Filing Info

  • Accession Number: 00201925
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 28 1970 12:00AM