Deregulation and privatization
Deregulation of public services in the fields of communication and transport
The past two decades have been characterized by a worldwide trend towards deregulation of public services, especially in the field of communication and transport services. Modern economic and government development has expected these services to be made available to all citizens and companies at the same quality and price - this has also been true of water and electricity supplies, hospitals and "security services" provided by the police and military.
The classification of communication and transport services as a state-owned responsibility provided to the public justified the state being both owner and monopolist, e.g. for postal services, railroad and air transport systems or, at the very least, for the public regulation of rates, access rights and public service obligations via concessions and licenses.
In 1958, the Treaty of Rome created the European Community but it also stipulated that state regulation should not be permanently maintained in the modern economy. The American and English governments under Carter, Reagan and Thatcher eagerly began to implement deregulation and liberalization processes in the 1980s. After some delay many other countries followed suit, Germany among them.
Revolutionizing the service sectorsThe phasing out of publicly set prices and access rights not governed by free market competition in transport as well as the postal and telecommunication services revolutionized the service sectors. Dramatic price reductions in parcel and other cargo transport services led to strong rationalization pressure in these markets. The traditional service providers began to restructure, creating new quality products supported by aggressive marketing. Individualization and innovation became key to survival. New providers with new ideas began penetrating markets, often facilitated by the new possibilities of e-commerce in the years between 1998 and 2002. New business models and structures, in particular contract logistics and 3PL/4PL services (discussed in greater detail later on), established themselves and created new opportunities for rationalization, quality enhancement and increased flexibility in industrial and commercial enterprises.
Modern logistics is not just being shaped and driven by the changing demands of the global economy, it is also beginning to provide concepts and act as an enabler for innovation.
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