The auto transport industry is big around the world, and the US economy is no exception. A free-market economy enables a market full of opportunities and thousands of companies competing for business. On the one hand, more options, mean competitive prices for the customers. Fewer companies, on the other hand, would mean more expensive car shipping services due to the market monopolization, with prices dictated by a handful of companies.
Information is Gold
A country progresses when there are fair market conditions. Therefore, governments should support small business owners (startups) and help them thrive. Many programs incentivize small businesses, no doubt about that. Yet with the signing of the new bill, MAP-21, small business owners felt a punch.
In the last few years, in the auto transport industry, companies grew by leaps and bounds bringing more and more options to the customer. The best price and service always won, and carriers and brokers alike worked hard to satisfy customers’ needs. This was a sign of recovering economy, according to many news sources.
The trucking industry has always been a thriving industry, despite the high turnover and government regulations. Not this time, though. This time the government hit the trucking and shipping industry hard.
An international example of market monopoly
In 2013, a civil class-action lawsuit was filed against a few international car shipping companies accusing them of price-fixing. These few companies control about 70 percent of the international car shipping market. The filed complaint explains how they are deliberately eliminating competition and inflating the prices. The automakers and, consequently, the final consumer absorb the overcharge cost fully.
A domestic example
In a similar manner big auto transport companies in the United States, with the help of the Transportation Intermediaries Association, will push out of business many small companies by raising the bar to enter and operate.
Raising the bar is good. But making companies and roads safer should not be at the expense of small business owners and, ultimately, the customer who will have to pay higher prices. The new bill clearly outlines the positives.
- Strengthen America’s Highways through the National Highway Performance System
- Doubles funding for infrastructure safety and road improvements nationwide
- Imposes more rigorous alcohol and controlled substances testing – removing the highest risk drivers and vehicles from the road
- Establishes a national driver registry for CDL holders to track history and performance
- Creates Unified Registration System making it easier for companies and carriers to register according to their authority
So, all the good things are laid out on the table for the media to feed on constantly. On the FMCSA website, you can find the complete bill with all the positives and negatives, as well as all the updates to the document.
The negatives are not as obvious, of course. However, the businesses that will be affected understand them the most. Companies and for-profit organizations that lobbied for this bill claim the industry standards have to improve and nothing else matters. We are open to discussion.
Do you think small businesses matter in America?