Exploring the Economics of Transportation

This is the management of all transport operations, these include tracking and managing vehicle maintenance, cost of fuel, routes, warehousing, communications, cargo handling, carrier selection, driver and accounting. Using transport management systems, transport management is made easy as it allows the managers to automate the processes in place so as to receive valuable insight as well as save time and reduce spend on future shipments.

Importance

Inventory flow

An effective transport management enables the company’s supply chain processes to flow smoothly. If transport is executed successfully, the inventory is kept is lean and it is easily moved in and out of the warehouse fast and efficiently (PLS Logistics). This helps in reducing lead time and saves cost of storage and generally improves efficiency in the warehouse. Disruptions in transport management can be very detrimental to the company as it is costly and delays customers’ orders thus risk losing their loyalty.

Visibility

It is crucial for transport management to employ the use transport management systems (TMS). This system automates the transport processes making it easy for the management to tender loads, track shipment as well as gather and analyze data on performance (PLS Logistics). TMS improves visibility as one can be able to see ever activity in the transport operations. Helps in improving customer satisfaction, reduce transport cost and optimize packaging and storage procedures.

Customer satisfaction

There is a lot of processes involved between the point of procurement and shipping and transport is the most as it acts as the point of contact with the customer. If a company always delivers products late, the customer will have a negative view of the customer but if the company is always on time, the client will even give you referrals (PLS Logistics). Thus proper management of the transport sector within the company ensures timely delivery and a satisfied customer.

Question 2

 The structure in organization of airlines in America is carried based on how much revenue the airline is making from its ventures (Feige and Pforte 430). The airlines are further grouped into major, national or regional airlines. Every airline in the three aforementioned categories is required to have a certificate declaring their fitness and a valid operating certificate. The certificates are formally issued by The Department of Transportation. The certificates serve the purpose of ensuring that the airline has enough funds and management efficiency to carry out their operations.

            Airlines in the major category are those that have revenues of over $1 billion every year. These airlines are usually in the business of providing worldwide services of travel and include American Eagle, Delta, Northwest, Continental and US Airways (Powell 29). The national airlines are required to achieve between $100 million and $1billion every year they operate. Many of these type of airlines provide countrywide services. The regional airlines which cater for particular regions usually attain the $100 million revenue mark or lower.

In terms of employee structure the airlines have line personnel who are the people involved with telling the public about the airline (Feige and Pforte 415). These people can include anyone from the front office receptionist to the pilot. The employees come from several departments of the company such as the reservations and ticketing, sales and marketing, operations and maintenance department and subcontractors. All these departments are usually responsible in the day to day operations of the airline in order to ensure the airline attains the revenue required threshold. As regards the subcontractors, they are usually engaged by the airline on a full or partial basis depending of the type of work in question.

                                                         Question 3

            Transportation economics refers to the study of how people move as regards to space and time. The demand for air transport is described as a derived demand, which implies that people demand for air transport so as to fulfill another demand. This demand can include education, health, employment, and recreation among other reasons (Henriksen and Ponte 31). Understanding this factor is key because the marketing structure of the airline is then needed to be in line with the respective demands for travel. A clear example is high demand for vacation and recreational travels during the month of December, and airline can capitalize on this demand by either offering holiday packages in collaboration with major hotels and spas or slightly increase airfares.

            The demand for transport can also be described as latent, which implies that the improvement of the aviation industry has led to an increased demand for its services (Powell 29). This implies that the infrastructural and other advantages of the aviation industry has increased the demand for transport. These benefits may include reduced airfare on some airlines, better and more efficient aircraft among others. These elements can be capitalized by airlines to increase profits due to them understanding their consumer’s budget needs in some cases. At other times especially for customers who seek prestigious services for air travel such as first class lounges and privileges, the airline can take advantage of their increased budgetary allowance for travel to increase profits. This is done by increasing airfare and providing certain luxurious benefits to these clients.

Question 4

Logistics study illustrates that there are challenges faced when trying to manage the operations. The first challenge is fuel cost. Inflated fuel prices are responsible for the increase in the transport cost. The next is business process improvement (Jang, 200). Advancements in technology and their adoption into the industry appears lucrative but incurs a lot of resources to be incorporated into the business. The third challenge is improved customer services which are characterized by increased customer expectations with a decrease in the willingness to pay for the extra shipping costs when delivering goods at customer premises.

Higher fuel prices have generated a greater credit crisis as well as rising inflationary demands that is influenced by the economy. The logistics industry is thus forced to rise the regulations, demand and overhead costs. On the other hand, hiring and retention of drivers have remained a chief dispute following the changes in economies of scale. The federal government has formulated stiff regulations on the carrier face limiting goods to be transported within a given period (Park, Sangmin, 10). Environmental concerns have seen the formulation of emission reduction and anti-idling device that are too expensive to purchase and install to the system. Another challenge is the strategy of embracing advanced technology.

Question 5

Tachographs are devices fitted on the passengers or goods vehicle to collect data on several parameters. Consequently, this device is classified as either analog or digital. In the modern days, the digital tachograph has been divided into driver’s card, control card, workshop card, and the company card. From the different types of cards listed, the information collected includes the vehicle registration number, speed, single or core driver, frequency of using the card, and the distance covered as well as other activities carried out by the driver while on the trip.

The working of a tachograph requires the vehicle unit as well as the motion sensor. The vehicle acts as the brain of the tachograph where other complements such as processor, clock, a display as well as a printer are fitted. During the operations, the turning of the gearbox output shaft produces electric pulses that produce a signal on the information to be collected (Oh, Yoonseok et al, 150). The information collected is then stored in the DDD Files for further software analysis. Among the persons of interest that will use the information collected include the driver and the company according to the four types of cards listed. The installation of Digital Tachograph became mandatory from May 1st, 2006 and has been actively applied to replace the analog models.

                                                         Work Cited

Feige, Andreas, and Lydia Pforte. “Sustainability Certification in the Aviation Industry.” Biokerosene. Springer, Berlin, Heidelberg, 2018. 403-432.

Powell, Matthew. “Capacity for war: preparing the British Aviation Industry in the 1920s.” The RUSI Journal 163.3 (2018): 28-34.

Henriksen, Lasse Folke, and Stefano Ponte. “Public orchestration, social networks, and transnational environmental governance: Lessons from the aviation industry.” Regulation & Governance

12.1 (2018): 23-45.

Jang, Youlim. “Prediction for danger zone of Gyeongbu expressway using digital tachograph data.” 18th International Conference Road Safety on Five Continents (RS5C 2018), Jeju Island, South Korea, May 16-18, 2018. Statens väg-och transportforskningsinstitut, 2018.

Oh, Yoonseok, et al. “Analysis of taxi operation using digital tachograph and meter data in Korea.” 18th International Conference Road Safety on Five Continents (RS5C 2018), Jeju Island, South Korea, May 16-18, 2018. Statens väg-och transportforskningsinstitut, 2018.

Park, Sangmin, et al. “Study on the development of safety grade model for roads in Korea using digital tachograph and traffic accident data.” 18th International Conference Road Safety on Five Continents (RS5C 2018), Jeju Island, South Korea, May 16-18, 2018. Statens väg-och transportforskningsinstitute, 2018. 

   PLS Logistics “The Importance of Transportation Management | PLS Logistics Services”. PLS Logistics Services, 2018, https://www.plslogistics.com/the-importance-of-transportation-management/. Accessed 21 Dec 2018.