The forces of demand primarily control all business spheres, the need for products, and supply, the availability of products. Over-the-road transportation is a valuable aspect of the economic and industrial arrangement that links the producers and consumers. In that regard, the forces of supply and demand influence the choice of over-the-road transportation. This paper will compare and contrast supply and demand concerns for over-the-road transportations.
The cost of using over-the-road considerations is a common consideration in demand and supply. Cost-effectiveness in transport is a factor that many people consider before they choose a means of transport. Heijedal (2013) notes that road transport is the most cost-effective means of transport due to its distance flexibility. According to Lu et al. (2021), economic factors are the most significant factors in the supply and demand of over-the-road transport. For consumers, over-the-road transport costs determine their willingness to spend and, ultimately, the demand. Consumers aim to spend the least on transport, and therefore, the demand for over-the-road transport is influenced by its affordability. On the other hand, suppliers consider the cost of over-the-road transport to maximize profits. The supply of over-the-road transport is determined by the profit margin representing the difference between the cost and income.
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Besides, distance is a consideration in the demand and supply of over-the-road transport. The transported distance is a determinant of cost and, therefore, a common consideration in demand and supply. The distance that an individual wishes to transport determines the choice of means. Over-the-road transport is preferred for shorter distances since it is more flexible and cost-effective (Heijedal, 2013). Distance affects the supply of over-the-road transportation since it influences the suppliers' availability to cover the distance. Some transporters would prefer to operate inter-regions transport while others prefer international transport.
However, demand and supply considerations in over-the-road transportation differ since the availability of resources and economy influence demand. In contrast, supply is determined by the availability of labor. Economic activities determine the demand for transport and are often indicated using the gross domestic product (GDP) and GDP per capita (Lu et al., 2021). The demand for over-the-road transport is high when the economy is booming since people move more and more products are distributed. Conversely, supply considerations revolve around the availability of labor and, specifically, drivers. The Conference Board of Canada (2013) notes that labor force participation in over-the-road transportation has been a significant concern in Canada since the number of drivers influences the country's supply chain. Therefore, unlike demand which depends on the state of the economy, supply relies on labor availability.
Demand considerations in road transport include freight capacity, while supply considerations include urgency and convenience of travel. The size of the load that an individual wishes to transport is a major consideration when choosing over-the-road transport. Forms of transport with higher capacity save on time and costs since they require less labor and fewer trips. The cost of fuel is a primary factor in road transport, and thus, transporters prefer minimizing trips while maximizing load capacity. Conversely, supply considerations in over-the-road transportation are determined by the time and ease of transport (Peterowinje, 2016). Urgent transport is likely to attract few suppliers while more convenient transport is likely to attract a higher supply. The reliability of over-the-road transport is inclined to the suppliers’ ability to deliver cargo within the expected time.
In conclusion, demand and supply considerations in over-the-road transportation are influenced by cost and distance. The demand for over-the-road transportation is dependent on the economy, availability of resources, and freight capacity. Conversely, supply considerations in over-the-road transportation rely on the availability of labor, urgency, and convenience of travel. While the demand is influenced by expenditure, supply is influenced by profit maximization.
References
Heljedal, M. (2013). Factors influencing the choice between road and multimodal transportation (No. 1635). Norrköping. https://www.diva-portal.org/smash/get/diva2:668777/FULLTEXT02.pdf
Lu, C., Fu, S., Fang, J., Huang, J., & Ye, Y. (2021). Analysis of factors affecting freight demand based on input-output model. Mathematical Problems in Engineering , 2021 , 1–19. https://doi.org/10.1155/2021/5581742
Peterowinje. (2016, April 10). Transport demand and supply . Global Transport and Logistics. https://globaltransportandlogistics.com/transport-demand-and-supply/
The Conference Board of Canada. (2013, February). Understanding the truck driver supply and demand gap and its implications for the Canadian economy (No. 40063028). AERIC Inc. http://www.drivershortage.ca/wp-content/uploads/2013/03/Understanding-the-Truck-Driver-Supply-and-Demand-Gap1.pdf
