Regulation vs. Deregulation

Regulation Vs. Deregulation Student’s Name Professor’s Name Institutional Affiliations Course Name and Number Due Date Regulation Vs. Deregulation The United States transportation industry has experienced diverse regulatory changes over the decades. According to Shin (2023), the regulation history dates back to 1887, when Congress established the Interstate Commerce Commission (ICC) as the nation’s regulatory agency for the transportation niche. This institution outlined diverse laws guiding aspects ranging from safety and operations to price limitations. Its presence triggered particular influences on the American transportation sector for years before continued demand for changes ushered in the era of deregulation characterized by diverse Acts and capped by the 1995 ICC Termination Act (Shin, 2023). A review of the two approaches in the industry confirms that they focused on improving services, promoting economic growth, and customer protection. Thus, this research investigates the effects of regulation and deregulation on the American transportation industry, assesses the impact of globalization, and the benefits enjoyed by the customers. Regulation of the United States transportation sector significantly influenced the economics and service pricing during the time. For instance, Fischer (2018) reports that the ICC’s work in the industry ensures that railroads and other sectors do not integrate monopoly-inclined practices while delivering their services. As a result, the regulators charged this institution with responsibilities such as rate controls, cost and service values, and discrimination elimination. Many other regulatory efforts to enforce similar guidelines in other sectors led to the formulation of the 1935 Motor Carrier Act covering the intercity bus and trucking industry. Fischer (2018) adds that the 1938 Civil Aeronautic Act regulated the aviation sector’s safety, economics, and traffic control. Ellig (2020) indicates that although these regulations streamlined the industries and maintained control and safety, they triggered varied shortcomings. For instance, the author flags the gradual rise in prices and costs due to these laws. The firms struggled with rising resource misallocation and cost inflations while finding it difficult to attract new investors. Such aspects indiscriminately disadvantaged the transportation sector and the customers. Thus, the rigidity during the regulation era pushed the need for deregulation across the industry. The demand for deregulation across the various transportation sector niches rose from the need to revolutionize the industry rather than keep it limited under the regulation laws. Montero and Finger (2020) recognize that the increased control by ICC and other Acts reduced the capacity of railroads, aviation, trucking, or intercity bus sectors to tailor their services to the needs of their areas. As a result, these concerns shifted the perspective towards creating a more deregulated transport industry. According to Peterson (2018), the advocacy by different players led to fundamental changes in the rise of the contemporary transportation environment. For instance, the author indicates that Congress passed the 1978 Airline Deregulation Act, facilitating companies to gain control over rates and fares. Montero and Finger (2020) also suggest that the 1970 Rail Passenger Service Act eased business operations in the railway niche. Rastatter (2018) adds that the Motor Carrier Act also boosted competition and efficiency in the trucking industry. Thus, deregulation triggered sweeping operational advantages in the transportation industry. The recorded ch...