Transportation Industry, Transportation Sector

By: EconomyWatch   Date: 29 June 2010

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The transportation industry, which involves carrying passengers and freight, is among the largest employers in the world. The major divisions of the transportation sector are:

  • Infrastructure: This includes the construction and maintenance of roads, canals, terminals, stations, depots and seaports. The ownership of transportation infrastructure could be public or private.
     
  • Vehicles: It includes the development of various modes of transportation –automobiles, trains, ships and aircrafts.
     
  • Operations: This encompasses the methods by which vehicles are operated. It also includes their financing and legalities.

    Transportation Industry: History

    The primary mode of transportation in the early ages (after the invention of the wheel) was animal-driven carts. The Romans were the first to build paved roads. The development of cities across the world led to the growth of shipping. Some major historical inventions that shaped the modern transportation industry are:

    • Steamboat (1787)
    • Modern bicycles (1790)
    • Cable car (1871)
    • Automobiles (with internal combustion engines) (1885)
    • Aircraft (1903)
    • Modern helicopters (1940)
    • Supersonic jet flight (1947)
    • Bullet trains (1967)

    Transportation Industry: Demand and Supply Drivers

    Slow economic activity results in lower demand for freight and passenger transportation. According to the IATA, the air transport industry lost more than $4 billion amidst the 2008 global recession. Another major driver of the industry is cost, in terms of ticket prices and financing (demand) and factors of production (supply). Transportation activities heighten during the holiday seasons, impacting the performance of this industry.

    Transportation Industry: Major Players

    The major players of the transportation industry are:

    • Railways: The US has the biggest railway network (approximately 240,000 kms). Other countries with vast railway lines are Russia (154,000 kms) and Canada (72,961 kms).
       
    • Airways: The major airlines are British Airways, Lufthansa, Qantas, Cathay Pacific, Emirates, Air France-KLM and Southwest Airlines.
       
    • Shipping and logistics: The chief shipping companies are APM Maersk (TEU capacity: 2,031,886), Mediterranean Shipping Company (1,469,865) and CMA CGM Group (988,141).

    The transportation industry supports economic development by aiding the production and distribution of goods and services. Also, the industry assists in the propagation of ideas and knowledge by facilitating the movement of professionals.

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