Motor Carrier Regulation and Last Mile Delivery: Have we Come Full-Circle with Carrier Practices?

Abstract

The focus of logistics has been to deliver products to customers as quickly and consistently as possible without a severe loss in profit. The growth of multichannel retailing in connection with the recent surge in on-line ordering, has forced the logistics industry to evaluate current transportation practices and make innovative adjustments. In our work, we reflect on the changes to motor carrier transportation over time through the lens of regulation. Concerns about rates, entry to markets, and the safety of carriers were common around the Great Depression. Policy makers took notice and imposed economic and social regulation. Motor carrier strategies changed to meet these new policies and the motor carrier industry settled into decades of stability. Midway through the 20th century many began to question the efficiency of the industry. Entry was difficult, rates were considered high, but safety issues were of little concern at the time. Deregulation became widely popular with policy makers, and the industry changed its strategies again to comply with deregulated policies. Today, technology has become a prominent tool for all. Together, e-Commerce, Omni-Channel Distribution, Last Mile Delivery and Gig Delivery are poised to change motor carrier practices again. So, where does the industry go from here? Some think that it is headed back to economic and social regulation policies of the past. We examine the impact of previous legislation on the transportation industry, specifically motor carriers, which led to deregulation of motor carriers in the 1990’s. Considering the growth of on-line sales, we attempt to look forward, using the past, to hypothesize how they may operate in the future.