Modes of transport play a key role in the transport process. They help facilitate mobility of persons and goods across the globe. In is therefore of particular interest for business entities and governments to understand the economies of scale which accrue to the various transportation modes, how they occur and the causal factors associated with each of them. This largely depends on the different deployment and utilization modes of the specific transportation modes alongside the particular setting in which they are deployed.
Economies of scale are normally to be assessed in terms of the efficiency derived from deployment of the particular mode of transportation. Efficiency in this case describes the input to output ratios of the various modes. The determinants of modal efficiency differentials are; the load capacity, logistics dynamics, distance factor and the scale economies as well. The basic concern in choosing a mode of transport lies with the assessment of both cost and time efficiencies or a purposive compromise of the combination.
Buy Economies of Scale Modes of Transportation essay paper online
Economic impact indicators of transportation modes are important in assessing the impact of transportation as an important element in the production-consumption process. The scale-specific indicators for capital and output combination are transport sector income and local income at micro level. On the macro level, the indicator is usually the gross domestic product (GDP). For output-labor and capital-labor combinations, the specific scale indicators are output/local income at micro level, and output/GDP at macro level.
The emergence of containerization changed the traditional costly and time wasting ship loading and unloading trend. Development of cheaper, faster, and highly flexible pendulum routes has greatly improved maritime transport by creating equilibrium between regularity of services and number of port calls. Maritime transportation derives its strength from its ability to continue traffic, and on its capacity which allow haulage of bulky industrial materials. Maritime transportation is the lowest cost per unit compared to other modes of transport.
The international nature and character of maritime transportation with regard to ownership and flagging has helped reduce its costs significantly as a result of limited controls, access to lower registration charges hence reduced operation expenses. Ship owners can choose to offer either charter services or liner shipping services. In the former, ship rentals are purposed for specified origin and destination. In the latter, shipping services are conducted regularly along a pendulum route characterized by several calling centers. Maritime operations have also been characterized by a system of "conferences" put up to help regulate individual liner rates with an aim to protect the industry from market fluctuations hence enhance better service provision,
Recent developments in the container shipping industry have seen establishment of strategic alliances with other rivals to provide common services through vessel-pooling on major trading routes. This has helped them engage a limited number of ships within alliance covered routes while engaging the remaining to routes not covered by the alliance. The cooperation practice has aligned routing and service delivery and contributed to substantial economies of scale through efficiencies accruing from better managed service frequency, fleet and vessel size and number of port calls.
Later day developments have seen significant privatization and deregulation in the airline industry. From hubbing advantages to low cost carriers in the 1990s, several features came into play as key to airline successes. First, fast growth rate meant keeping operation costs at minimum by lowering the averages of employee service duration and fleet age. Secondly, fleet simplicity also reduces costs by operating on relatively short distance routes. Third, ensuring fast turnaround times by keeping aircrafts in the air for relatively longer hours hence more earnings. Fourth, secondary airports focus aiming to access lower landing and parking charges, together with the vibrant utilization of the internet, further serves to lower operation costs
The establishing of alliances in the international airline networks has improved partners' competitive levels by freeing them from any possible limiting bilateral agreements. In this way, individual trading independence is promoted, risk is shared, transaction costs are reduced, and greater scale economies accrue to members especially when they venture into markets that would be difficult to cover individually. The emergence of separate air cargo services has increased reliability of air transportation alongside improving service delivery through specialization that reduce time wasting if cargo scheduled for destinations different from passenger destinations were involved
The single most important asset of rail transportation is its ability to carry bulky volumes of cargo and large numbers of passengers over long distances. Rail transportation is able to attract scale economies because of unit train containerization. Unlike the road transport in which marginal cost increase equally with every extra container, in rail transportation, marginal cost declines with every extra container up to the point at which the train size is attained. Compared to road transport, energy utilization per unit load per km in rail transport is lower. The associated durability of Rail rolling stock (whose service life is takes at least 20 years) provides good prospects at amortization .
On the global perspective, rail transport has undergone major structural changes. Several stops (excess terminals) have been removed and a number of unprofitable lines closed. In most countries including the US, rail transportation has been liberalized, leading to substantial savings on labor through train crew reduction and provision for more dynamic working hours alongside subcontracting. An important change in the rail transport is attributable to utilization of the double-stacking mechanism coupled with the labor lessening and fuel efficiencies. Furthermore, rail transport in which unit trains are involved in haulage of one particular product alone derive scale economies through shipping in bulk.
High speed passenger trains thus use special lines while the freight traffic utilize the ordinary network. Because the high speed trains accelerate and decelerate over reasonably longer distances, less significant terminals are skipped and in effect increasing the inter-stations average distances. This has helped increase the rail transport efficiency and competitiveness in service delivery.
Generally, road transportation modes face constraints to do with size and weight due to engine related limitations (mechanical and economic), and also because of administration imposed limits either for safety purposes or need to control energy consumption. For this reason, all modes of transport lack substantive ability to attract scale economies. This restrictions limit road vehicles' individual transportation capability. Generally, road transportation modes face constraints to do with size and weight due to engine related limitations (mechanical and economic), and also because of administration imposed limits either for safety purposes or need to control energy consumption. For this reason, all modes of transport lack substantive ability to attract scale economies. This restrictions limit road vehicles' individual transportation capability.