How Supply and Demand Drive the Transportation Industry

            How Supply and Demand Drive the Transportation Industry Name Institution                             How Supply and Demand Drive the Transportation Industry Table of Contents Introduction…..…………………………………………………………..................................…3  The Nature of Transport 3 Transport Supply and Demand. 3 Role of Supply and Demand. 5 Conclusions. 7 References. 8                                
 Introduction The need for extra capacity has been mentioned in anticipation of rising transportation demand for both individual trips and goods transportation due to population and employment expansion and to support expansion in trade and tourism.  The supply and demand has a big effect on the possible future transportation capability deficiencies. In order to understand how the transport sector works, it is first paramount to understand how it is affected by the supply and demand characteristics. In general, each transport mode is meant to fulfill a resultant transport demand and for that reason each transport method is meant to support mobility. The Nature of Transport             Ideally, transportation is a market that is made up of providers of transport services and the individuals that use these services. Operational transport markets should have a scenario where the transport supply meets the transport demand in order to ensure that the transport needs for mobility are met. An economic system that is consistent of various activities located in diverse areas brings about movements that must have the support of the entire transport system. Without being able to move around, the available infrastructures would not take place or if it does, it would not happen in a cost effective manner. This interconnectedness can be considered according to the concept of supply and demand (Gray, 2012). Transport Supply and Demand              Transport supply refers to the capability of transportation systems and model over a geologically defined transport system and for a specified period of time. Supply is explained in terms of capacity, how often it is used as well as the area that is covered. Capacity is usually appraised in terms of fixed and dynamic terms where the fixed capability refers to the amount of space that is availed for transport while the dynamic capability refers to the enhancement that can be made through superior expertise and administration. The total number of passengers as well as the volume that can be transported at any given time is meant to calculate the transport supply. On the other hand, transport demand is used to define the transport needs even if those needs have been met fully or in part. Just like transport supply, demand is expressed in terms of the total number of people or goods as  well as the mass that is transported over a given period of time (Goodlin, 2014).             In most cases, supply is explained in terms of third party transportation and own account transportation. The third party transportation refers to the transport companies that provide transport services to consumers who require such services. In most cases, consumers pay for the services as per contract agreements. Such services are offered by trucking and railway services from across the country. The most important feature of this kind of transportation is competitiveness, something that drives providers to offer better services to the consumers. On the other hand, the own account transportation refers to a mechanism where the transport consumer uses their own transport mechanisms to move around their merchandize or for personal travel. The user of this kind of transport has a direct access to a certain extent but they run the risk of reduced asset utilization since they do not have any outside merchandize to transport (Goodlin, 201).             Just like any other sector, the transport demand is driven by the state of the economy. In most cases, the state of the economy plays a big role in determining the level at which people request for transport. There are two types of transport needs namely the consumptive and productive needs. The productive transport needs usually have a well defined economic focus such as the movement of semi-finished products from one location to the final production location something that adds the value of the products in the production process by profiting from the placement advantages of each of the production sites. This is unlike the consumptive transport needs that bring about minimal advantages to the economy. Ana example of this is the scenario where goi...