Discuss the Advantages and Disadvantages of Motor Carriers (Term Paper Sample)

Motor Carriers: Advantages and Disadvantages
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Motor Carriers: Advantages and Disadvantages
Abstract
This study analyzed the role played by transport in business in relation to logistics. It laid emphasis on motor carriers as the chief transport mode. The researcher looked at various print and online sources at length to bring out the advantages and disadvantages of motor carriers. From the study, the researcher observed that transport of goods for business through motor carriers continued to grow, encouraged by government policies. However, it was noted that barriers to entry into the transport and logistics business do exist.
Finally, the researcher in conclusion, recommended that the state and federal governments need to put in place policy measures so small business persons can enter the market with ease. In addition, more recent studies need to be conducted to generate a more updated factual study of the topic
Introduction
One of the most common means of transport since is by road. There have been several improvements to this mode of transport. In the process of conversion of resources into useful goods, transportation plays a connective role. The concept of business logistics is constituted by planning of all transport functions in a system of goods movement in order to minimize costs and maximize service to customers (Tseng & Yue, 2005). Demand for transport is a derived demand, as noted in Hazen and Lynch (2008), for there to be a demand for transportation, a demand for the products to be transported has to exist. In the transportation of goods, apart from railway, trucks have been the dominant mode of transport for goods on land. Hazen and Lynch (2008) observe that by the time motor carriers arrived in the mid 1930s, there were significant improvements in the trucking industry. The US government moved in to control the commercial transport industry first through the Interstate Commerce Act of 1887. This Act regulated transport by rail and later on truck and air transport. President Carter signed the Motor carrier Act in 1980 which promoted independent pricing and open entry in order to encourage competition in the trucking industry. Eventually, the country witnessed a sharp increase in trucking operators. The Motor Carrier Act, in essence, brought deregulation to the industry. A prime objective of deregulation as noted by Coyle, Novack Gibson and Bardi (2010), was to ensure that prices of transportation services were driven by the market and would be free from regulatory intervention.
Literature review
Tsang and Yue (2005) observed transport to be the most important economic activity among the components of business logistics systems. In 2003 alone, motor carriers transported 1,264 billion revenue freight ton-miles which represented 31 percent of the ton-miles transported by all modes (Coyle et al., 2010). The authors go on to emphasize that these figures demonstrate the significant role played by motor carriers in the US and the dependence of the country’s companies on it. The US spent a large sum of money in constructing the interstate highway system and as Coyle et al. (2010) found, the country has become increasingly dependent on the highway for the movement of freight. Motor carriers slowly replaced railroads as the preferred transportation mode as the interstate system developed. Businesses turned to motor carrier transport because they found it efficient in transporting finished and unfinished manufactured products.
The primary advantages of motor carriers as a form of transport are illustrated by its dominance of the short-haul and local delivery markets and its recent dominance of several long-haul markets (Magee, Copacino, & Rosenfield, 1985). Motor carriers are extremely effective in the transportation of goods over a short distance. More improvements have been made on trucks to improve their handling and maneuvering capabilities. Companies and individuals can now choose whether to lease or buy their own trucks for business. Improvements have also been made on the loading systems and terminals to achieve a faster, more efficient process.
Rail transport offers the lowest transport cost among all other forms. Magee et al. (1985) noted that the greatest advantage of rail is the ability to transport high-density products between major distribution centers where minor tasks of sorting are required. Railways are quite reliable and are not hindered by traffic or whether. It is very economic for a business to move large quantities of goods over long distances using rail road especially if the goods are of low value. Magee et al. (1985) discredit the use of railroads to motor carriers. They point out that the main reason for this disadvantage is the fact that trains operate from terminal to terminal while siding deliveries as a separate purpose. Advancements in technology have made trains much faster than cars. Electric trains, for example can travel at speeds higher than 100mph. This speed counts for very little when it comes to logistics because trains operate on terminals rather than from point to point, unlike trucks.
A distinction exists between motor carrier transportation means. The two main players are truckload (TL) and less- than- truckload (LTL). Truckload carriers give transport to shippers who offer a high volume that meets minimum weights that are required for shipment of truckloads and truckload rate or who will pay the difference. Less-than-truckload carriers service shippers who deal with shipments that are lower than the minimum truckload quantities. A disadvantage therefore arises with regard to entry into the motor carrier transport business which is capital needed to enter the TL industry. This explains the reason for small carriers being concentrated in the LTL industry (Coyle et al., 2010).
Repeal of the interstate Commerce Act saw the abolishment of operating authority issued by federal or the state authority. The repeal resulted in the removal of all motor carrier regulation and restricted the state from controlling the motor carrier industry (Coyle et al., 2010). State and the Federation were allowed to scrutinize the transport of household goods. The only registration that is now required for carriers is that of the Federal Motor Carrier Administration and to show an insurance certificate as proof of the same.
A major disadvantage of motor transport is that "they transport less of commodities such as grain, primary nonferrous metal products, motor vehicles and equipment, and paper and allied products" (Coyle et al., 2010). The main goods transported by motor carriers are manufactured and products of high value. Specific commodities include both consumer and manufactured products. Transport through motor means is expensive for these products mainly because they must be moved over long distances and in relatively large quantities. Also, transport by road is prone to risks such as accide...