New approaches to regulating transport in Finland: Case study on the Transport and Communications Agency (TRAFICOM)
Context
The Finnish Transport and Communications Agency (Liikenne-ja viestintävirasto, TRAFICOM) is the national licensing and certification authority, as well as the registration and oversight authority in the field of transport and communications in Finland. TRAFICOM also issues technical and operational regulations complementing national legislation. TRAFICOM has as an objective to promote traffic safety and the smooth functioning of the transport system, and to ensure that everyone in Finland has access to high quality and secure communications connections and services. For TRAFICOM, the relevant transport market is very wide, encompassing driving license holders, car owners, sea captains, aerodromes, railway undertakings, etc.
Issues
For a very long time, different modes of transport have been regulated separately on all levels. At global level, there are the United Nations’ framework for road transport, the International Civil Aviation Organization (ICAO) for aviation, the International Maritime Organization (IMO) for maritime issues and the Intergovernmental Organization for International Carriage by Rail (OTIF) for rail. The same separation continues regionally and most often also nationally. Yet, the approach to market regulation is very similar in all modes of transport: licensing and certification, registration, oversight, and passenger rights. In addition, the trends that initiate changes are the same: safety and security of the services, environmental challenges, digitalisation, automation, congestion in densely inhabited areas, etc.
Transport network is the backbone of societies. People and companies need transport services in their daily lives. The efficiency and sustainability of the transport services is an important time and cost factor for the industry as well as individuals. Often, end-users of transport services use combined services (travel chains). Companies delivering their products to the market may use road, rail, sea and/or air carriage; and people use their own car, bicycle or combinations of bus, metro, train, taxi travel, etc.
Finland has been an advocate and a spokesperson for the concept of “Mobility as a Service” (MAAS). The idea is to look at the transport system from the perspective of the end-users: What is, to the end-users, the easiest and most efficient way to access the transport services they need? How can they compare and combine different services, also taking into account the different motivations that guide their choices: time, cost, comfort, environmental values and so on?
Looking at the transport system as a whole, infrastructure matters a lot: the roads, the railways, the ports and waterways, as well as airports and airspace management. Additionally, the different services connected with transportation should be given particular attention: parking facilities, weather services, ticketing systems, etc.
Approach and intervention
The first step towards a transport system wide governance was the decision taken by the Finnish government to merge the different transport authorities. This decision led to the establishment in 2010 of two transport authorities:
the Finnish Transport Safety Authority (Trafi), responsible for most licensing and certification tasks, transport registers, oversight and regulatory work in all modes of transport; and
the Finnish Transport Agency, responsible for road, rail and water transport infrastructure and traffic management.
The significance of digitalisation, digital services and communication networks in transport became more and more evident. Therefore, when developing its organisational model, Trafi chose in 2012 a matrix model recognising the importance of data. Data was considered as the fifth mode of transport.
Source: information provided by TRAFICOM. 2019.
The most dramatic change, from the perspective of the personnel and of the customers, was to organise themselves according to the processes: one sector concentrating on oversight tasks, the second on certification and the third on registration, all covering all modes of transport. In addition, rule-making activities in different modes of transport were brought together. This change aimed at having experts from different modes of transport working side by side and learning from each other.
However, to maintain a transport mode oriented approach in such a process-oriented solution, directors general were nominated for all modes of transport, with their own staff. They were, in particular, responsible for international relations and relations with stakeholders, as well as making sure that all aspects of the authority responsibilities in their field were covered. As the role of data and digitalisation had also been recognised as an essential and overarching factor in all transportation, a director general for data issues was also nominated.
The challenge of this model was, however, the requirements it set for the “middle-management level”. Heads of unit and other operative management level representatives had mostly experience from only one mode of transport. Consequently, they could not support and lead all experts in their unit, covering all modes of transport, in the same manner. From the perspective of customers, managers with a background in just one field, and yet responsible for activities in all modes of transport, lacked credibility, at least to a certain degree.
As a result, this process-based matrix organisation was after a while replaced with a “compromise” solution, which took into account the perspective of the customer, however, combining work in different modes of transport as much as possible.
The latest intervention in governance has been the establishment, in 2019, of the Finnish Transport and Communications Agency, or TRAFICOM, inheriting the tasks of Trafi, some of the tasks of the Finnish Transport Agency1 and the tasks of the former Communications Agency.
The primary goals of this reform were to improve the ability to respond to the changes in customer needs and the operating environment, to develop and strengthen the strategic management of the administrative branch and to achieve synergy benefits. Another goal was to further improve the productivity and impact of administration through more versatile and effective use of resources. The reform aims at better use of transport-related data in the private sector and at generating new business activities. The objective is to better utilise the data for the benefit of the whole society. Also, digitalisation, service orientation in transport and creation of transport markets with the support of new legislation are bringing the transport and communications sectors closer together.
This merger was facilitated by the fact that the Finnish Ministry of Transport and Communications had already all these agencies under its umbrella. However, the agencies were different in size, which had naturally impacted the organisational cultures. Therefore, combining the agencies also meant e.g. that practicalities in the administrative “routines” needed to be fine-tuned. In addition, the duties of personnel engaged in overlapping tasks needed to be reviewed.
The objective of the new Agency is to promote traffic safety and the smooth functioning of the transport system, and to ensure that everyone in Finland has access to high quality and secure communications connections and services. With the involvement of the whole staff, TRAFICOM has been defining what kind of organisational culture it wants to have basing the work on its values: trust, cooperation and capacity to change. Promoting the environmental approach and the development of the transport system and market is looked at in networks that cross the organisation horizontally, including both management and expert level.
Also national transport legislation has undergone a major change: principle rules for transportation of passenger and goods in all modes of transport have been gathered in the same national law, the Transport Code or Transport Services Act. The main drivers for this amendment were digitalisation and deregulation. Some chapters of the Code deal only with one mode of transport, but several chapters cover all modes, regulating access to information on transport services, passenger rights, etc.
Results, impact and lessons learnt
Looking at the transport system as a whole has benefitted the Finnish Authorities. They have been able to learn from technological developments and best practices in different fields, and set up solutions that benefit the whole system. For example, a digital driver’s licence has been developed, and the experience gained in that process is currently being used in projects preparing for digital pilots licences. Rules governing the collection and use of data relating to registration of vehicles, ships and aircraft, as well as personnel licences in different modes of transport where unified, which allows for better and more consistent service for customers, and facilitates work in the agency. Experts e.g. in data protection and cybersecurity are co-operating with all parts of the organisation, which gives them a wider view on developments in the sector.
To look for best practices and to take into account lessons learned in another domain is an approach that is visible in Finnish positions at international level, where issues having a wider impact are discussed: digitalisation, cybersecurity, automated vehicles, and environmental impacts of transport. The organisational changes in Finland have helped TRAFICOM in developing common approaches in many areas, such as transport registers, passengers’ rights, medical practitioners’ right and obligation to divulge information to the transport authority, etc.
Looking comprehensively at the transport system gives the Agency understanding on the differences between different modes of transport, as well as of the problems that these differences can create. Transport is a heavily regulated sector, where the basic rules are established at global level. Making changes requires work and agreement at global level.
Evidently, it is not easy to establish governance for such a wide field. To have a particular “cross-organisational” or horizontal approach to a particular phenomenon or common features of different systems, there are a variety of governance choices:
You can establish a matrix organisation, where different dimensions are crossing each other (like in the picture on the previous page). The challenge of this approach is the management of resources (who decides on the use of resources, the priorities, and the budget).
You can set cross-organisational teams. In a cross-organisational team, members dealing with similar issues are brought together from different parts of the organisation: they exchange information and best practices and can provide comprehensive analysis and reports. In Trafi and TRAFICOM, we have had for example the Dangerous Goods Team, discussing the developments and best practices in the transportation of dangerous goods. Another example is the Accessibility Team, where members look at different issues relating to accessibility of the transport system. The benefit of these teams is that they are often quite agile, and can react quickly to new tasks and responsibilities. The challenge of the team-model is management. When setting up a team it is therefore important to establish its tasks and describe how the team activities relate to the decision-making process.
You can also set up special units to look at a particular feature of phenomenon. Such special units can support other parts of the organisation on a particular issue. For example, in TRAFICOM, we have a special unit dealing with experimentation and automation for the benefit of the whole transport system. We also have a common unit for transport information and analysis. The personnel working in such a special unit needs to actively co-operate with other parts of the organisation, in order to make an impact.
In summary, it can be said that there is no one governance model that would fit all purposes. In order to respond to market transformation and disruptive technologies, governmental agencies need to be agile, to review the appropriateness of their governance model regularly and have a variety of tools in their tool kit.
Note
← 1. The Finnish Transport Agency was a government agency, responsibilities of which were split between TRAFICOM and the Ministry of Transport and Communication at the moment TRAFICOM was formed.