Getting a Handle on Regulations and Compliance

摘要

Q: How do regulatory changes impact capacity, service, and pricing? A: Numerous regulations and market dynamics have impacted the transportation industry. In North America, for example, the Moving Ahead for Progress in the 21st Century Act, which passed in 2012, resulted in the cancellation of nearly 9,000 bonds and freight forwarder licenses, removing 35 percent of the brokers and freight forwarders from the market. As a result, brokers have higher operating expenses due to increased bond costs, and freight forwarders who have operated without bonds now have higher operating costs. Carriers without a brokerage license have increased operating expenses or have decided to no longer commit to more freight than they can haul on their own assets, reducing effective capacity. In addition, smaller carriers who have traditionally relied heavily on brokers to utilize their capacity could be left with under-utilized backhaul capacity. This leads to carrier inefficiency and increased costs that eventually have to be passed on to the shipping community.