Q: I know you’ve been writing the Q&A column for about 50 years, and I guess you’ve been in the transportation industry for longer than that. From what I know of the industry’s history, there have been a lot of changes over that time.
I’m wondering what you think about all those changes. Was the industry better off before (as a lot of the older guys in my office are always telling me), or do you think it’s in better shape now? Have the changes, in other words, been an improvement or not? I’d like to know what an elder statesman in the industry, such as yourself, thinks.
A: What a provocative question!
It’s odd for me to hear myself called an “elder statesman,” because it seems only a short while since I was the youngest guy in the room most of the time. But having reached the third of the stages of man’s lifetime denoted by the Sphinx’s famous riddle, I suppose I at least qualify for the “elder” part of your description.
For a young person, you certainly seem to have an open mind. Most of today’s youth has a tendency to regard what has gone before as “the bad old days” without giving it much thought. You seem at least willing to consider that maybe those who lived in the past knew a thing or two more than you, although I’m not sure that in this case I’d say that was necessarily so.
Back when I began writing this column (which was in fact 42 years ago, not 50-plus), we indeed were living in a very different era. Economic regulation of transportation was maintained tightly by the old Interstate Commerce Commission, Civil Aeronautics Board and the still-extant Federal Maritime Commission, without the permission of which no carrier could enter the industry or significantly alter rates or practices, and so on. The commercial marketplace functioned within those parameters.
The deregulation that took place mainly in the final two decades of the last century has eliminated virtually all such restraints on the market, with vast changes to the industry. I wouldn’t call all of the changes good, nor would I call them universally bad. As with most change, it’s been a mixed bag.
On the plus side, transportation is a lot cheaper without the regulators to hold pricing high. When I entered the industry in the early 1960s, freight transportation accounted for about 10 percent of gross domestic product. Today, it’s around 6 percent, some of which can be attributed to technological gains, but much unquestionably resulting from curtailment of artificial regulatory restrictions.
On the other side of the coin are those who opposed deregulation at the time — their fear being that it would lead to instability. That, too, has come to pass. All sectors of transportation are a lot more wobbly than they were in my younger days. Among other things, there has been massive consolidation in the industry, resulting in diminished competition, most noticeably in the air and rail sectors and continuing elsewhere. Carriers still come and go unpredictably.
A second consequence has been the unevenness of the economic benefit to shippers. Large shippers, of course, have the greatest leverage in the market without the regulatory protection that extended equal status to buyers of transportation service regardless of size. Smaller shippers have been obliged to pool their buying power through third parties and otherwise to gain economic parity, diluting their savings.
And there has been what I consider an unhealthy emphasis on dollars and cents at the cost of service. This has been paralleled by a shift in the legal underpinnings of the industry; the specialized legal standing of transportation has been diminished to the point that it rarely is decisive in resolving disputes or problems arising between shippers and carriers.
I won’t say that these things are necessarily bad, because they simply place buyers and sellers of transportation service on the same footing as buyers and sellers of other services and commodities in the economy, but they do complicate the situation as opposed to the clarity that existed in pre-deregulatory days. I have to confess that I do miss that clarity.
However, I still haven’t reached the age where I hark back to the world of my youth as the ideal world. It wasn’t. Nor, though, do I consider today’s world ideal, either. So to answer your question, I don’t think things are either better or worse today than they were before; they’re simply different. And because we live today, the only thing to do is to make the best of things as we find them — as did our forebears.
Consultant, author and educator Colin Barrett is president of Barrett Transportation Consultants. Send your questions to him at 5201 Whippoorwill Lane, Johns Island, S.C. 29455; phone, 843-559-1277; e-mail, BarrettTrn@aol.com. Contact him to order the most recent 351-page compiled edition of past Q&A columns, published in 2010.