Transportation Industry



Transportation Industry

Question 1. Why Is The Transportation Industry Cyclical In Nature?

The transport and logistics industry globally has ever increasing demand and is undergoing constant redefinition accelerated due to the development of the economy and the globalization of markets. Transportation systems are becoming more sophisticated, fast and accurate, seeking to offer an efficient and competitive. Global transportation industry has transformed from product-oriented system to one consumer-oriented systems, it alliances with strategic partners to improve the productivity and minimize the production costs. There are various cyclical factors which have impacted the transportation industry such as privatization, tough competition, increasing costs, oil prices and crises, the growth of e-commerce, logistics and supply chain, which represents several major challenges to this industry. There is a vital need that transpiration industry should cope with these challenges as areas of opportunity to strengthen customers and give them the tools to cope with the new millennium (Rainley, 2002).

Other cyclical factor that has impacted the transportation industry is that there has been huge increase in the transport system and the transport industry of USA. America has been growing since many years. With the increase in the transportation system, there have been many changes in the regulations that govern the transport system of America. There different modes of transport system that is comprised of different medium of transport, that is, rail, air, water networks and roads. The major transportation system is dependent on the automobile in order to travel shorter distances but in order to travel longer distances, airplane or railroads are the modes of transportation. The evolution of the transportation system has a great history in USA. The evolution of technology has brought the transportation from the carts to the automobiles and further to the mass transit system (Belobaba, 2009).

It should be noted that intermodal freight transportation is getting more and more popular among the multitude of cargo due to their high efficiency and the possibility of a reduction of transportation costs. This is especially noticeable for the international carriage of cargo. Combined transport or intermodal combines at least two modes of transport as much as possible and reduce the journey by road. In some cases, it offers an efficient alternative to road transport with the economic and environmental benefits. Combined transport is the combination of at least two modes of transport within the same chain. It takes no transshipment of goods. Only the container (swap, trailer) is transshipped from one mode of transport to another (Lin, 2011). The greater part of the journey must be accomplished by rail, waterway or maritime. The journey by road is the shortest possible. Only through the reduction of volume, the transport sector can become environmentally viable. The factors that determine the transport policy are:

The specificity of the transport infrastructure

Linkages occurring in the development of transport

Factors limiting the development of transport

State policy

The first three factors determine the role of transport in economic development, the theoretical development of transport policies and the amount of expenditures necessary for the harmonious ...