TRANSPORTATION DEREGULATION AND LOGISTICS COSTS

The costs of regulation fall under two main categories: (1) costs of running regulatory agencies, paid by taxpayers; and (2) costs of compliance with regulations, incurred by carriers, shippers, and ultimately by consumers in the form of higher prices. It is widely estimated that deregulation of freight transportation saves U.S. shippers billions of dollars in total logistics costs annually. These logistics costs savings evolve mainly from lower freight rates and inventory levels. Using the total cost analysis (TCA) theoretical framework, this article reviews current literature on transportation deregulation and logistics costs and provides suggestions for future study.