Reference no: EM133048070
Case Study 12-1 Who Pays the Price
P. 431 of Transportation, a Global Supply Chain Perspective textbook - Novack/Gibson/Suzuki/Coyle
Overview
Municipal, provincial and federal governments in every county of the world must make extremely expensive and potentially contentious decisions every day about how to manage their international supply chains. The Case study below could have taken place in any country in the world. Both of these new safety and security issues were hotly contested by industry when rolled out.
Case Study 12-1 Who Pays the Price?
Over the last ten years, the federal government has dramatically increased the number of regulations pertaining to transportation safety and security. Two such regulations are presented below. Review and answer the case questions.
Transportation Safety - December 18, 2017, is set as the implementation day for electronic logging devices (ELDs) in trucks. ELDs will replace paper logbooks for truck drivers to provide better control over their compliance with Hours of Service regulations that are designed to combat driver fatigue. It is believed that paper logbooks are subject to fraud and allow drivers to exceed 11 hours of driving per day and more than 60 hours in a seven-day period (cycle). On the other hand, drivers will not easily exceed the limits as ELDs are not easily manipulated. The cost of ELD purchase, installation, and operation is the responsibility of the trucking company or the independent truck driver.
ELD critics believe that, at a cost of $2,500.00 per unit, the expense of ELD adoption is excessive for smaller companies and independent truckers. They also project productivity decreases of 15% fewer miles traveled per day and nominal rate increases of 5-10 percent for loads booked on the spot market. Proponents indicate that ELDs will improve the accuracy of HOS logs, improve HOS compliance, reduce falsification that occurs with paper logbooks, and reduce crashes over 1,800 annually.
Transportation Security - After the terrorist attack on the United States on September 11th, 2001, the Transportation Security Administration (TSA) was established and tasked with implementing regulations to protect the safety of passengers using the USA airline industry. TSA manages Secure Flight, a risk-based pre-screening program to identify high-risk passengers; conducts passenger screening for illegal items before they enter the secure area of airports, and screens checked bags for explosives and other dangerous items. The TSA has implemented congressionally mandated security fees to help finance the increased cost of securing the nation's aviation transportation system. The passenger paid fee was increased to $11.20 per round trip ticket in 2014.
Critics of TSA screening programs complain that these policies increase travel time, invade privacy, are of limited effectiveness, and increase costs for passengers and airlines. Proponents of these policies argue that the safety of air passengers is more important than delays or increased costs.
Case Questions:
- In each of the scenarios presented in the case, opponents and proponents have divergent views of government regulations. One view is on the public benefit, the other is on the cost to individuals and/or private industry. How do you decide which view to accept?
- In each of the scenarios earlier, identify the benefits versus the costs for both viewpoints.
- Should the government intervene in setting regulations to increase transportation safety and security? Or should the private industry take on this role?
You will be assessed on your achievement of the following course learning outcomes:
- Examine the role that government plays in the development of transportation policy and a regulatory framework
- Assess issues and challenges for transportation and global supply chains
Additional Details for Assignments
This assignment may require additional research on these two topic areas on the web.