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SECTION 2 Freight Transportation Decisions and Considerations Decisions That Affect Freight Transport and Which Sector Makes the Decisions There are many areas of decision making that affect the freight transportation industry. Deci- sions must be made regarding infrastructure planning and maintenance; economic, safety, secu- rity and environmental regulations; operations of equipment and personnel; mode of shipment; choice of carrier; and other operations and investments. Different Types of Decisions The public sector is responsible for planning, owning, and maintaining infrastructure. The one exception is railways, which are privately owned and operated. The public sector also creates the economic environment in which private entities operate by issuing various regulations. The pri- vate sector, in turn, largely makes operating decisions as well as company-specific investment deci- sions. Which sector leads is a function of ownership, incentives, and organizational objectives. Decision Type Typical Lead Sector (1) Policy and Regulation Public sector led (2) Technology Private sector led (3) Infrastructure Public sector led (4) Operations/Maintenance Public sector/private sector shared (5) Non-transportation (behavioral) Public sector led Public policy making is by definition a public function, though the private sector has incentive to influence some policies to its advantage. The division of policy making across national, state, regional, and local agencies is ultimately determined by the political process. The multiple levels of policy making can add to the challenges faced by both public and private sector decision makers. Technology in transportation is typically led by the private sector, which invests to develop it, adopt it, and expand markets for it worldwide. Government regulation or funding sometimes influences the development and adoption of technology by the private sector. Infrastructure decisions, with the exception of most of the freight rail system, are made by the public sector, as the owner and principal funding source. Innovation in infrastructure finance and operations by the public sector has drawn more private participation but the overall frame- work is still led by the public sector as the ultimate owner. Operations and maintenance of infrastructure is chiefly performed by the public sector (again with the exception of freight railroads) but the private sector leads decisions affecting the oper- ations and maintenance of equipment, subject to government regulation. 13