Abstract
The interaction between logistics and the economy has the logistics systems affecting more positively on the economy. This interaction between logistics and economy causes an extremely rapid means of the transfer of services and produced goods in both global and domestic markets. Therefore, it improves the importance of the highway, the competitive advantage, airline, railroads, waterways transportation and investments in bulk transportation abilities are obvious (Chandra, Ghosh, & Srivastava, 2016). Hence, the significance of possibilities that leads to the question, “How do the US Economy influence the logistics and transportation mechanisms?” In finding the answers to the question, one cannot avoid coming across the inefficiencies that inhibit the realization of the maximum potential in terms of growth and development of the economy. But with the removal of the bottlenecks through the provided solutions the paper tries to show the relevance of logistics management in the transport industry.
Introduction
The most common mode of transportation in the US is through the roads for shorter distances and rails, air, or waterways for more extended travel. Additionally, most cargo is ferried through rail, pipeline, waterways, tracks, and air for cargo that is premium or perishable. Therefore, it can accurately be said that the strength of the economy is dependent on the present conditions of the market (Centobelli, Cerchione, & Esposito, 2017). Some of these market settings influence the transportation sector. For instance, seasons have an impact on transportation as witnessed during December, November, and October where the demand for transportation soars high due to the festivities.
Delegate your assignment to our experts and they will do the rest.
. Businesses are guaranteed to make preparations for Holiday Shopping Season and Black Friday sales in the last quarter annually. Thus, this paper strives to ensure that virtually all citizens understand and relate to the question, “How do the US Economy influence the logistics and transportation mechanisms?” Hence, this research will address the economic impact of transportation in the United States and the inefficiencies of the system which have cost the taxpayers more than USD$ 100billion. It will further forward some suggestions that if addressed could assist in tackling the inefficiencies (Chandra, Ghosh, & Srivastava, 2016). Adoption of the Congestion pricing model has been successful in Sweden and could be used to reduce traffic during peak hours and save the taxpayer USD$ 45billion.
Literature Review
Within the United States, transportation is known to contribute a significant amount to economic bustle. Projects related to transportation have diverse effects on the federal’s economic development goals like employment, the value of the property, productivity, tax incomes, business activity, and investment. Thus, projects that increase accessibility while decreasing the costs of transportation are more inclined to increase economic development and productivity. For clarification purposes, consider new highway increases mobility and access to some regions (Centobelli, Cerchione, & Esposito, 2017). Consequently, materials and some services become readily available at reduced costs and automatic expansion of markets for business owners and organizations. Further economic benefits could include increment in productivity in the form of increased employment opportunities and access to education.
In order to comprehend the development and growth of a nation’s economy, it is critical to identify with the aspects that are in essence the economic indicators of the said country. The indicators might have high and positive values but also affect the social, economic, cultural texture and psychological aspects of the nation positively. Logistics come in by altering and modifying economic parameters, hence, contribute enormously to the national economy as well as the local economy through increasing competitiveness of organizations (Chandra, Ghosh, & Srivastava, 2016). Today, many of the industries rely upon logistics for their growth and development. Thus, the logistics are the missing link between transportation and national economic growth.
It is plain clear that the interaction between logistics and the economy results in an economy positively affected by the logistic system. This interaction between logistics and economics causes an extremely super-fast way in the movement of services and produced goods in both global and domestic markets. Therefore, it improves the importance of the highway, the competitive advantage, airline, railroads, waterways transportation and investments in bulk transportation abilities are obvious (Chandra, Ghosh, & Srivastava, 2016). Hence, the significance of possibilities that are physical with an example as storage and transport infrastructure are comprehended. Furthermore, active customer services that supplement the developments earlier discussed to offer supremacy corporate competitive would then realize.
In 2016, the net value of the capital stock of the United States transportation was approximated at USD$ 7.7 trillion. In the following year, both local and state government accounted for 99% of the local investment in the transportation, even though the bulk of the funding was from the Federal Government (Chandra, Ghosh, & Srivastava, 2016). From the value of the capital stock, rail network was approximated at USD$ 0.34 trillion, pipelines at USD$ 0.17 trillion, while the highways were approximated at USD$ 2.8 trillion and USD$ 0.57 trillion.
Discussion of Your Ideas on The Topic and Problem: Economic Impact of Inefficiencies Related to Transportation
The transportation system within the United States is currently facing significant inefficiencies. Signs of the inefficiencies are looming everywhere and are in full sight of the public. An example is the bridges and roads that are crumbling down even as continuous construction work is carried on them. Moreover, frequent threats to discontinue public transport or raises in fares are becoming the norm while metro areas are parked with rush-hour traffic and airplanes lie idle on the runways (Donaldson, 2018). Generally, vital transportation systems are being politicized leading to policies that are compromised and led to inflated production costs, budget deficits, incompetent pricing, delays, time costs and excessive money to consumers, and suboptimal investments.
The inefficiencies have further been broken down to translate on the economic impact they have on the nation. Centobelli, Cerchione, & Esposito, (2017) estimate the costs related to traffic by vehicles at USD$45 billion. The figure is attributed to delays in travels as opposed to the roads being free to motorists. They further cite that USD$13.8 billion is attributed to inefficient funding of the highway where the system fails to redistribute the funds to most needed areas. The researchers also point out that road damage is the most inefficient with USD$87.3 billion and USD$ 64billion being for truck, and car maintenance, USD$ 10.8 billion is the wear and tear of the vehicles, and USD$ 12.5 billion. Further inefficiencies cited include delays in taking off and landing approximated at USD$ 16 billion, economic regulations at USD$ 7.4 billion, and poor management of sizes.
Solutions to the Inefficiencies to Transportation
There are two suggestions to the problem highlighted above, and they include improvement of the management of the public-sector through increased expenditure on infrastructure and restructuring the finance system in transportation. The second suggestion is to expand the private sectors responsibilities through deregulation (Kilian, 2016). Even though, the best alternative to the solutions would be to tackle the inefficiencies one after the other using local experimentation. For instance, the adoption of a congestion pricing program within major cities would reduce the number of cars significantly on the roads during peak traffic hours.
Conclusion
The primary forms of transportation identified in America are through air, road, rail, and waterways. Transportation is also known for the transportation of cargo, and thus, contributes significantly to the development of the national and regional economies where construction of a mere highway will not only benefit the audience but their children’s children. There are a number of flaws that have been linked with the transportation sector of the United States. For instance traffic, snarl-ups only cost the tax-payer USD$ 45billion only (Centobelli, Cerchione, & Esposito, 2017). But these challenges can be overcome by tackling these transportation challenges one by one. By addressing these issues, there is a lot of money that will be saved, and that can be redirected into another productive area of the budget.
References
Chandra, S., Ghosh, D., & Srivastava, S. K. (2016). Outbound logistics management practices in the automotive industry: an emerging economy perspective. Decision , 43 (2), 145-165.
Centobelli, P., Cerchione, R., & Esposito, E. (2017). Environmental sustainability in the service industry of transportation and logistics service providers: Systematic literature review and research directions. Transportation Research Part D: Transport and Environment , 53 , 454-470.
Donaldson, D. (2018). Railroads of the Raj: Estimating the impact of transportation infrastructure. American Economic Review , 108 (4-5), 899-934.
Kilian, L. (2016). The impact of the shale oil revolution on US oil and gasoline prices. Review of Environmental Economics and Policy , 10 (2), 185-205.
