The transport industry role in promoting economic activities in Australia

The transport industry role in promoting economic activities in Australia

The transport industry plays a key role in promoting economic activities in Australia. without the capabilities and capacities provided by the transport industry, it is hard for freight or passengers would move. The Transport and Logistics industry is estimated to have annual revenue of $96.65 billion as per 2017 annual report.  The industry employs many people across its major subsectors including stevedoring, warehousing, logistics and road transport.

The transport dominates the Australia service market to its competitive advantages in price, ability to offer reliable and convenient service.  Vehicle transport is the largest player in this industry and competes with rail, water and freight sector. The industry has also demonstrated a dramatic change in the last five years. The annual revenue growth is expected in the next five years. Increased merchandise trade and freight task are the main drivers for demand in this industry.

Transport demand refers to type and amount of travel individuals are able and will to use specific conditions. To evaluate demand one should consider the price and other available options as key determinants of demand in the transport industry. demand and supply evaluation plays an important role in planning transport.

Cost of travel is a key determinant for travel. Transport cost is key for people when choosing the mode of transport to use. With all other factors held constant, travellers will go for the most affordable transport service. Though in case other factors like urgency and social class, the price may not be the main factor to consider as they supersede the cost.  The cost of transport depends on economic performance, time and distance covered.

Technology also determines the demand and supply in the transport industry. With the continuous growth of technology people are going to transport companies that offer reliable and convenience services. Transport companies that have embraced technology receive higher demand as people can book for transport services at the comfort of their home with visiting bus stations. Value addition increases the demand in the transport and logistics industry.

Reliability of transport method influences the quality of the services delivered. Reliability includes aspects such as confidence and accessibility. Travellers will choose services that are reliable, meaning that the services are long-term and can the regularly obtained. Late arrival and delayed departure of buses and trains lower the reliability of the company offering transport services. demand and supply in this industry are also related to offering quality security services offered by professional personnel.

Demand and supply is also affected by demographic factors. Automobile travel particularly tends to go high with wealth and employment. Demand for walking, cycling and public transport tend too higher for older, younger, poor and large number of people living in urban areas.

Transport demand is also influenced by the economic activities of a nation. commercial activities increase demand for special travel, include local deliveries, bus travel, services (utility trucks and plumbers vans), heavy freight transport and business travel. This type of travel increase higher demand for special vehicles including air travel, delivery, buses, large trucks and rail travel.

Elastic demand

Elastic demand refers to when price or other determinants have a significant effect on what customer want to buy.  elastic demand consumers will respond to changes in price. In the transport industry, demand is not elastic. Changes in prices and other factors affect the mode of transport significantly.

Trends in the Transport Industry

Transport industry is the backbone of the economy. The industry supports other industries including manufacturing and retail, distribution and supply sector and creation of wealth through global import and export.  Transport industry plays a critical role in the growth of Australia economy. In the United State, the transport and logistics sector created  3.7 million jobs representing 2.3 % of the total employment. In the past decade, the industry has experienced significant growth as the nation has recovered from the recession. The industry is expected to continue to grow.

The self-driving cars have become reality and they are no longer reserved to make fun to kinds. Major Corporation like General Motors (GM), Uber, Tesla and Google are investing billions of dollars to perfect the concept of the self-driving car and also testing the market. Uber’s is already in the process of launching several autonomous SUVs to collect data on traffic and road condition in United State.  Companies are will to invest more fund to develop more sustainable cars in a bit to attract more returns from the market.

The growth in online business has increased the demand for address deliveries. The transport companies continue to improve their services to remain competitive.  Heavy truck businesses are considering adding a small vehicle in their fleet to win a bigger share of the transport industry.

Low-cost airlines continue significantly conquer market share hence impacting the pricing air shipping particularly in Australia, North America and Europe. Clients can pay low for certain services hence attracting more customers are thus increasing demand for aircraft transport services.

Government investments have disrupted the transport industry. The intervention to reduce inflation rate plays a critical role in the transport industry. Reduction in fuel prices reduce the cost of transport and hence shift the demand and supply in the industry.  Investment in transport industry supports the transport industry by reducing the cost of transport through efficient and fast transport network. More efficient export infrastructure and freight network means Australia transport businesses will be able to access global business more effectively.    Creation of public-private partnership has also played a significant role in improving the transport sector. This has played a key role in financing infrastructure network which enhance quality service delivery. to enhance the transport and logistics sector the government has developed more effective ports and associated land transport system. The reason behind this is to help the country cope with the transport challenges associated with export and imports.