Transportation and the United States economy

Transportation and the United States economy

The question of the existence of an economy is nothing less than impossible if one was to remove the fundamental component of transport from it - Transportation and the United States economy introduction. Unless and until an economy is equipped with the instruments, modes and means required to move goods and manpower from one location to another, the economy will be completely incapable of functioning in a manner such that it can harvest the opportunities that it comes across (Ballou, 2004). Not only will such an economy be unable to take advantage of any natural resources that it possesses, but will also be unable to develop means that can allow it to generate sources to fuel its infrastructure. This paper shall shed light on the implications of the transport on the economy of a country. Special attention shall be given to the effects of transportation on the United States economy.

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The relationship that is present between the economy of a region and the transport infrastructure of that economy. The development that an economy can yield from the presence of a stable transportation infrastructure depends on the industry mix that prevails in that economy. Other elements that have implications on the economy with respect to the transportation infrastructure of the economy in the same regard include the location of the industry growth and the location of the population growth. However, it is essential to highlight that when one refers to transport with regard to an economy, the canvas is extremely vast since there is a large degree of difference between the contributions to the economy by the numerous instruments, modes (Bureau of International Information Programs – U.S. Department of State, 2005) and means of transport that exist.

The implications of an economy caused by the movement of goods and/or labor over a long distance and that over a short distance are quite different (U.S. Chamber of Commerce, 2008). Also, the reason because of which the goods and/or labor are being moved also plays a significant role in the implication that the movement has on the economy. When transportation of goods and/or people from one point in a region to another point within the same region occurs, the implications can be quite different for an economy as compared to the process of transportation of goods and/or people from one region to another region.

For instance, it is clear that an aircraft that flies from one city to another within the same country will be carrying passengers who will be primarily comprise of commuters who shall be moving for the purpose of short term trips that are meant either for pleasure (Williams & Miller, 2003), or a brief meeting that is meant for business purposes. On the other hand, an aircraft that flies from one country to another can be expected to carry passengers who are either travelling to another region for the sake of a long vacation, or for a business meeting that is meant for strictly business purposes. Although the same carrier can be used for local as well as for non-local transport, the merchandise being carried can vary greatly in nature because of the target region to which it is travelling. We can therefore concur that transportation does not merely allow the working elements of an economy to function simultaneously and to interact with each other in their functioning but also allows one economy to establish a business with another economy in a relationship that can be feasible for both economies.

When one economy interacts with another economy through transport, it allows both economies to explore their options in the areas of labor and capital and allows them to develop new means and methods to further develop their own labor and capital resources. This is because of the fact that transport allows economies to operate in manners such that the economy does not produce to meet only the demands of the local region but also produces to meet the demands of regions that are made accessible due to the presence of transportation capabilities between the two economies. Therefore, the existence of transportation opens pathways to new forms of labor and capital usage. Allowing increased production volumes and increased opportunities for the development in areas such as specialization and increased development through innovation adopted from external sources.

Another highly significant factor pertaining to transport is the fact that the costs that are involved in the execution of transportation operations give transportation a highly significant position in a country’s economy. The costs incurred in carrying out almost any transportation process are considered to be of the most vital significance because not only do they incorporate the utilization of a substantial amount of financial resources but also require a significant amount of time in order to process. Additional costs exist because of the fact that in order to carry out the process of transportation, manual expertise is required that the process cannot be expected to be successful without. This area branches off into the areas of the personnel required to perform the transportation process, and the personnel required to make sure that the equipment being used in the process of transportation is kept maintained and in a condition in which it can be used when required.

Factors such as these are present in even the most basic forms of transport and it is therefore inevitable for an economy to consider these elements when taking note of its standing. If the cost of transportation becomes too high for an economy, it is common to see instances where cutbacks are put into place in order to compensate for the costs of transport.

Transportation cost is perhaps one of the areas that are considered as the primary outflows of resources. More than often, businesses are not established because of the fact that the transportation costs that are required to run the business make the returns from the business highly unproductive. It is perhaps for the same reason that governments encourage that anybody planning to establish one or the other form of business that incorporates one or the other form of transport considers decreasing transportation costs as much as possible by implementing measures such as just-in-time delivery and outsourcing techniques (RAND Corporation, 2009). By measures such as these, the carrying out of transportation operations serves to increase employment rates as well as allow businesses to carry out profitable business operations.

With regard to the United States economy, it would not be unjustified to concur that transportation is in itself, nothing less than a commodity. This can be concurred because of the fact that transportation has an intricate set of characteristics. This is because of the fact that before a transportation activity can be carried out there are a significant number of factors that need to be determined. These factors include the mode of transport used and the significance of the usage of that particular mode of transportation for the subject freight (Bureau of Transportation Statistics, 2008), the speed and reliability that the mode holds and the distance across which the act of transport has to be carried out.

Generally, the United States economy follows a pattern in which an investment made in an industry where the wages are high results in an increase in the competitiveness that is present in that region. When investment is made in areas such as transport, it allows for the exploration of business opportunities in territories that are much different from the territories from where the exploration originates. Generally investment such as this is triggered by factors such as the limited presence of an element in a region where the demand for that element is either already high or continuously increasing. For instance, the requirement of labor or the need for a water or land supply can be reasons that may trigger such an investment.

It is common to find the channeling of funds in the United States towards transportation in regions where capital investment can serve as a catalyst for business operation. It is for the same reason that public funds are often channeled towards the development of transportation measures in an attempt to increase productivity levels at industrial facilities. This allows for an improvement to be brought in the business climate of the region and serves to support the economy of that region in the long run.

In the United States economy, a development in the area of retail does not serve as an economic expansion that can be relied upon. On the other hand, an increase in the rate of development in the area of transport allows for the establishment of a continuous process of development. While a decrease in retail development will serve to only cause a diversion of demand from one source to another, it will not result in the abolishment of jobs. On the other hand, an abolishment of transport means serves to render people incapable of performing their jobs. An element that should be considered at this point is that an excess of transport means could cause congestion to take place (Lexington Area Metropolitan Planning Organization, 2005), in which case the presence of transportation instruments, modes and means serves a purpose that is the exact opposite of what it is meant for. The development of congestion in the transportation infrastructure serves to slow down the economy.

However, it should be considered that even though transportation is an integral part the United States economy, its presence is by no means a guarantee for the success for the economy. Transportation means, modes and instruments serve as the elements that undergo the friction in the engine of the United States economy but they do not serve as a surety of the regions development because of the fact that the factor of transportation is of no use without the complete presence and functioning of the elements of land, labor, capital and natural resources, all of which have to be supplemented with reasonable taxes in order for the infrastructure to operate.

 

References
Ballou, R. H. (2004). Business logistics/supply chain management: planning, organizing, and controlling the supply chain. Prentice Hall.

Bureau of International Information Programs – U.S. Department of State. (2005). National Transit Summaries and Trends. Retrieved June 20, 2009, from usinfo.org: http://usinfo.org/enus/economy/industry/1nst.html

Bureau of Transportation Statistics. (2008). The Nation’s Freight . Retrieved June 20, 2009, from Research and Innovative Technology Administration: http://www.bts.gov/publications/freight_in_america/html/nations_freight.html

Lexington Area Metropolitan Planning Organization. (2005). Area Metropolitan Planning Organization, Transportation Planning. Retrieved June 20, 2009, from .lexareampo.org: http://www.lexareampo.org/congestion/Congestion.htm

RAND Corporation. (2009, June 8). Modernizing the U.S. Freight-Transportation System for Future Economic Growth. Retrieved June 20, 2009, from rand.org: http://www.rand.org/pubs/research_briefs/RB9457/index1.html

U.S. Chamber of Commerce. (2008, April). The Transportation Challenge. Retrieved June 20, 2009, from uschamber.com: http://www.uschamber.com/publications/reports/0804transportationchallenge

Williams, M., & Miller, V. (2003). More Than Half of Vacationers Traveling to Cities This Summer Will Use Local Public Transit System. Retrieved June 20, 2009, from American Public Transportation Association : http://www.apta.com/media/releases/090520_green_travel.cfm

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