Competition Issues in Road Transport

The road transport sector, an essential mode of transport in OECD economies, is conventionally divided into two, largely unrelated, parts – the road freight industry and the road passenger industry. The sectors under discussion – trucking, buses, and taxis – have quite different characteristics and scope for competition, which reflect inter alia differences in the timeliness and economies of scale and scope in operations. Trucking can sustain high level of competition and to some extent buses as well while there is some debate as to how and what form of competition can be introduced in taxis. As in the air transport industry, international trucking is governed by restrictive bilateral treaties. Most countries have liberalised their domestic trucking sector, removing controls on entry and prices. In the bus industry, long-distance bus services are liberalised in some countries while intra-city or local buses are very rarely liberalised. The taxi industry appears at first sight to be competitive with many buyers and many sellers.