Institution Study Of Highway Freight Transportation Market Structure Evolving

After the establishment of PRC,the governments operated the highway freight transportation industry monopoly.The highway freight transportation companies of province level were in charge of the transportation plan formulation,organization,and operation of city and county level companies.Under the economy regulation,the LTL developed quickly and formulated highway freight transportation network national level and regional level step by step.Since the 1980s,the entrance of private cartier destructed the pure planning economy system.Different kind of carriers of economy style promoted the prosperity of highway freight transportation industry.With the disaggregation of big and specialty transportation companies,the ability of taking advantage of scale economy and network economy is decreasing.The carriers are so many,so small,so unconcentrated,and disordered that the TL carriers are the mainly operators.The LTL networks established in the past have disappeared and modern logistics develop slowly.By contrast,since the deregulation in the 1980s,the market structure of American highway freight transportation had become more and more concentrated.The top 3 enterprises have an 80 percent share of total cargo volume and 90 percent share of total revenue.At the same time,there are lots of small companies, the freight transportation market structure are blending.Highway freight transportation is an industry with network economy characteristic and will develop towards concentration and scale economy under the promotion of technology and market power.But after the reform and opening up,China's highway freight transportation market structure is evolving in the counter direction to USA with same characteristic of big country economy.According to the new-classicality economics,economy of scale is the only factor to determine the market structure.From the point view of the practice of China's highway transportation,with ceaseless development of economy,the transportation demand is growing greatly,highway infrastructure network is formulated,transportation vehicle is improved,information technology is applied,more and more human resource are put into the industry,but the market structure of highway freight transportation do not evolve towards scale economy, or in other words,the speed of evolving is slow.What is the key factor to determine highway freight transportation market structure?The institution analysis method is applied in the paper to study highway freight transportation market structure changing.Main contents and conclusions are as follows.First,the paper make an evaluation to methods applied in highway freight transportation market structure changing study abroad and in domestic.In abroad,most studies focus on analysis of characteristic of scale economy.They apply cost function, production function to study the relationship between input and output,and then determine whether there is scale economy.Later some experts begin to study the relationship between company scale and transportation quality,service,development strategy,operation model.This expands the study scope,however,it is still the study style of new-classicality economics,and institution change is not included in the analysis of market structure changing.In domestic,there are few researches in the institution area.But viewing from the practice of highway freight transportation abroad and in domestic,regulation is the key factor determining LTL carriers to establish transportation network and take advantage of scale economy.So the institution factor must be included in the highway freight transportation market structure study.The paper introduces some main theories about new institution economics.Second,the paper analyses the network modality of highway freight transportation. On the basis of analyzing industry characteristic of highway freight transport,the paper analyses the network economy characteristic of TL an LTL through scale economy and scope economy theory,density economy and size economy theory.And then the paper analyses the network modality of highway freight transportation including integrated transportation product,transportation resource,and network economy characteristic.Third,the paper establishes a model to analyze the highway freight transportation market structure evolving.Before the reform and opening up,China's regulation policy of market entrance bring very huge transportation network establishing cost.Few carriers can enter transportation market,so supply is not enough.After reform and opening up,the private carrier with low transportation establishing and maintenance cost,full cargo information in a small area,self-supervision capacity,and low transaction risk,developed quickly.But with the carriers growing bigger and bigger,the transaction cost also grow bigger and bigger,and become the obstacle to company scale expanding.The conclusion shows that transportation demand and transportation supply are only the base of market structure evolving.The transaction cost caused by institution is the critical important factor in highway freight transport market structure changing. The transaction cost includes the cost of transport network establishing and maintenance, cargo seeking and information,supervision and control,transaction risk,etc.The four kinds of cost work differently in different time.Some time only one kind of cost work, other time maybe all the four kinds of cost work together.The fourth,the study of analyzing highway freight transportation market structure of USA shows that transaction cost caused by institution is the critical important factor in the market structure changing during different time.The regulation policy set up truck route,cargo type,and price.It makes the trucks empty-load in the return way,so transportation cost is very high.At the same time,if a company wants to open a new route or transport new kind of cargo,it must show the ICC that the new transportation service will be convenient to the public and not a threat to the existing companies.A existing company wants to extend service area,it must cooperate with the existing companies,so it is difficult in scale growth.After deregulation,companies can extend the scale easily by using social resource.Thus they can realize low price and good service by taking advantage of network economy.The fifth,the paper analyses the role of transaction in China's highway freight transportation market structure changing by contrasting state-owned transportation enterprises reform and private carrier development.The reason highway freight transportation developed so fast after reform and opening up is that transaction caused by institution change decrease.But when the transportation enterprises reach a big scale, laking of market faith system,transaction risk growing bigger and bigger,lead to low operation efficiency of trucks including working rate and cargo-load rate,so it is a waste of transportation resource.The real reason of China's highway freight transportation development is that governments establish a sound institution environment to encourage private carriers development other than state-owned enterprises reform.The sixth,to the problem of highway freight transport,there are two kinds of proposed solution.One is depending on the market.They believe the highway freight transport is a competitive industry and do not need the governmental regulation and interference.The freight transport market can reach a structure balance by itself.The other idea is by the government regulation.They believe there are so many operators in the highway freight transport market and over-competition,so the important thing need to do is controlling the entrance to the highway freight transport market.The research shows that they are not the real solution to the problem.Now the dead competitive is beyond the capacity of self-adjusting of market,so it can not solve the problem by itself. Government regulation can decrease the problem of over-supply in the short term,but in the long term,it can cause more efficiency lost.Future development of freight transport is still depending on the market-oriented growth,and at the same time the government should establish the necessary institution,strengthen market supervision,establish market faith system,and then decrease the transaction cost of transportation operators.