Transportation is a derived demand



  1. Transportation is a derived demand because it is a demand that arises as a result of the rise in demand of another commodity or service. The need for transportation is derived because people use it to get to other consumption elsewhere. Other derived services are fast food servers because people are becoming highly dependent on fast food therefore the need to make more of it and fast as well. Another good example is the care giving industry. As older people continue to increase then people in the care giving career need to be trained in high numbers to meet the demand. These services have in common the fact that the service is made possible by the rise in demand of another good or service.
  2. Differential pricing is the strategy of selling the same product to people but at different prices. In transportation, there is differential pricing in say limousine services depending on the season especially during summer when there could be a rise in tourists. Shuttle buses have different pricing depending on the time of day as human traffic is different according to the time of the day.
  3. Dynamic pricing is the setting of price for a commodity according to who is buying the commodity. In airlines they are testing the possibility of using technology to scan the data of the person making the search as well as the devise they are using so that they price the plane ticket according to affordability of the customer.
  4. In terms of cost structure, trucking is more flexible and therefore cheaper over short distances while rail transport is cheaper compared to trucking over long distances and more goods transportation. In market competition, more and more people are taking up rail transport because of the benefits it promises compared to trucking which attracts market only for short distances and light loads.
  5. The two most important DOT strategies to me are Environmental Sustainability and Livable Communities. Environmental sustainability is important to me because the environment is where we get most of our raw materials failure to protect the environment means the failing of most systems and loses to the country as a whole. Livable communities because people should never be replaced by systems which only exist because the humans need them. Even as the systems are built and run, communities hosting people need to be considered and catered for. Many are the times when communities near transport routes have largely been affected by noise as a result of the transport system as well as pollution making the areas mostly inhabitable.
  6. The differences between TL and LTL in operations costs is that TL is more economical for bigger companies and transporting a full load means spending less while LTL is only economical when two small companies split the cost of transporting their freight. In entry and exit barriers, TL is better because it only has to make a delivery in one place while LTL has to make at least two entries and exits especially when transporting for two companies. In investment threshold TL is more profitable compared to LTL which does not have much returns especially when they transport less than a truckload for one company.
  7. Cost –of-service pricing is setting the price of a service based on the cost incurred to provide the service e.g. government regulated train fares which are based on the maintenance of the rail system and shuttle fares maybe based on fuel consumed by the shuttle in the designated routes while value-of-service pricing is pricing based on the perceived value of the product or service to the consumer e.g. Higher prices for peak hours for shuttles because they perceive customers are in a hurry to get to work or school and air ticket pricing for perishables because they perceive you would not like a delay as the perishables could go bad.
  8. Containerization led to the reduction of space used up in ships or unloading areas enabling them to hold more cargo. It also cut unloading of cargo from ships by three weeks. New port facilities had to be built to accommodate containers and ports no longer needed to protect cargo from weather elements because the containers were weather proof. It also led to the creation of new shipping lines that were better equipped for cargo transportation. Containers also aided the better transportation on rail from the ocean and more cargo could be transported because the containers could be placed on top of each other. It enabled globalization for businesses as their products could be sold anywhere in the world. Standards of living improved because people were able to obtain cheaper products sourced from different counties. The negative impacts were that smaller shipping companies closed, most people lost their jobs as they were replaced with machinery and ports and entire cities decreased as a result because not much activity was needed along the stops.
  9. Intermodal transportation in the US is popular because it is economical and reliable. Companies are able to save on transportation by using intermodal containers. Intermodal containers also use rail or trucks which save on fuel. Intermodal transportation has also enabled environmental protection as companies can reduce their carbon foot print by using rail. Intermodal transportation is easy because it involves the use of containers that are easy to switch and can be transported by almost any kind of transportation. Intermodal transportation has a bigger capacity therefore less competition is experienced reducing price substantially. One can use it any time and it does not have delays. Intermodal transportation has quality service. It is faster as train speed can be increased while stalling car speeds. It is safer for cargo from accidents. Containers have tracking devices and therefore one is able to monitor where exactly there containers are any time.
  10. Hub-and-spoke route system is used in the airline industry. The airline has a central airport where smaller flights are taken from it, enabling the airline to cater for more routes. The pros: people going to remote areas are catered for, they save airlines money, gives passengers better routes, speeds up delivery, improved shipment tracking and it helps airlines to save money by having fuller planes. The cons: They do not offer very direct routes like point- to- point system, congestions and delays in hub airports.
  11. Impacts for the expansion of Panama Canal expansion is both short term and long term. Short term impacts are that inflation rates will remain low as imported goods do not have increased prices, more profit for commodity exporters, more vessels will be able to pass through. Long term are, expansion will make transport run more efficiently, it will open market for Asians from U.S exporters, jobs could be lost for some warehouse workers and LA will lose some business.
  12. Airline alliance example: The Sky team alliance.Transportation is a derived demand

Benefits to passengers are lower prices due to low operational costs, each route has more departure times to choose from, more destinations are made available, more transfers thus shorter travel times, fun-travellers get to enjoy a variety of airport lounges, travellers are able to fly all around the world for low priced tickets. The two airlines thus make money from customer satisfaction and they also get to enjoy reduced prices on sharing sale offices, maintaining facilities, sharing operational facilities and sharing investments and purchases.

  1. A good experimental design to see if passengers are better off booking tickets in advance would be listening to voice to voice encounters of actual people that want to travel and are looking for a good bargain for their tickets. The data can be collected from airline call centers. The statistical testing can be done by sorting the tapes through listening to them and the results can be presented by the number of sales made by people who agreed over the phone to buy advance tickets because they were more affordable.
  2. Aladema east is being constructed to mediate vehicle delays, eliminate collisions at rail crossings, improve air quality by reducing carbon footprint from stationary cars, accommodate more trains, passenger vehicles and trucks will no longer be delayed at stops to make way for trains, reduce emergency responder delays at the stops, improve the living conditions of surrounding communities, improve reliability on train operations, repairing aging-roadway crossings, improve the capacity of freight transport and will generally be profitable to the surrounding economy.