Page 421 - Foundations of Marketing

388 Part 5 | Distribution Decisions

Intermodal Transportation
Containers facilitate intermodal
transportation because they can
be transported by ships, trains,
and trucks.

© iStockphoto.com /narvikk

delivery time and the likelihood of shipment damage. Freight forwarders also have the insight
to determine the most effi cient carriers and routes and are useful for shipping goods to foreign
markets. Some companies prefer to outsource their shipping to freight forwarders because the
forwarders provide door-to-door service.
Another transportation innovation is the development of megacarriers , freight transporta-
tion companies that offer several shipment methods, including rail, truck, and air service. Prior
to the development of megacarriers, transportation companies generally only specialized in
one mode. To compete with megacarriers, air carriers have increased their ground-transpor-
tation services. As the range of transportation alternatives expands, carriers also put greater
emphasis on customer service in order to gain a competitive advantage.

LO 6 . Explore legal issues in LEGAL ISSUES IN CHANNEL
channel management.
MANAGEMENT

The numerous federal, state, and local laws governing distribution channel management in the
United States are based on the principle that the public is best served by protecting competi-
tion and free trade. Under the authority of such federal legislation as the Sherman Antitrust
Act and the Federal Trade Commission Act, courts and regulatory agencies determine under
what circumstances channel management practices violate this underlying principle and must
be restricted. Although channel managers are not expected to be legal experts, they should be
aware that attempts to control distribution functions may have legal repercussions. When ship-
ping internationally, managers must also be aware of international laws and regulations that
might affect their distribution activities. The following practices are among those frequently
subject to legal restraint.

Dual Distribution
Earlier, we noted that many companies employ dual distribution by using two or more
megacarriers Freight marketing channels to distribute the same products to the same target market. Courts do not
transportation firms that consider this practice illegal when it allows for competition. A manufacturer can also legally
provide several modes of open its own retail outlets. However, the courts view as a threat to competition a manufacturer
shipment that uses company-owned outlets to dominate or drive out of business independent retailers

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