Module 1 Flashcards
Cargo Transportation Economics
List the tree macroeconomic factors that lead to the explosion of international trade post WW2
- Transportation
- Information
- Supply Chains
Describe ‘TRANSPORTATION’ as a post WW2 macroeconomic factor.
Easier, cheaper, and more common than ever before.
The cheaper transport costs become relative to labor costs the greater the distance products will travel from point of production to point of production.
Describe ‘INFORMATION’ as a post WW2 macroeconomic factor.
Easier to obtain and cheaper than ever before.
Vendors and customers can get in contact from anywhere on the surface of the planet and coordinate complex supply-demand networks on the fly.
Describe ‘SUPPLY CHAINS’ as a post WW2 macroeconomic factor.
Becoming more global and disintegrated as companies break apart into smaller and more specialized units that are linked by modern transportation and information.
What are the three forms of economic value?
- Possession
- Form
- Time/Place
Explain ‘POSSESSION’ as a form of economic value.
Value created in the minds of individual consumers by marketing and advertisements.
Explain ‘FORM’ as a form of economic value.
Value created through the physical transformation of inputs into outputs by manufacturing/production.
Explain ‘TIME/PLACE’ as a form of economic value.
Value created by the movement of products from areas of surplus (low demand for product) to areas of shortage (high demand for product) by transportation & logistics.
List the three conditions/circumstances that lead to the “invisible hand” phenomena in modern free market economic theory.
- Satisfying the value proposition.
- Free market conditions exist.
- Government doesn’t prohibit movement.
Describe the ‘VALUE PROPOSITION’ as a condition of the ‘invisible hand’ phenomena.
Value proposition is satisfied when the total value is greater than the change in total cost of moving the product from one place to another.
Describe the ‘FREE MARKET CONDITIONS’ as a circumstance of the ‘invisible hand’ phenomena.
-buyer and seller are aware of one another
-reliable system of enforcing contracts
-means of exchange through currency or credit
Describe ‘GOVERNMENT PROHIBITION’ as a condition of the ‘invisible hand’ phenomena.
When the government does not inhibit the movement or trade of products through tariffs, protectionism, or embargoes.
What is the formula for the “invisible hand” phenomena?
Change in ‘V’ or Value is greater than or equal to the change in ‘C’ or Cost.
What are the five modes of transportion?
Truck
Rail
Air
Water
Pipeline
What is intermodal transportation?
Transport of goods that uses two or more of the basic modes to move freight from its origin to destination.
What are combination air carriers?
They move freight and passengers on the same trip together.
What types of goods are moved by air?
Small quantities of high-value, low-weight, finished goods.
What are the two types of dedicated air cargo carriers?
Integrated and nonintegrated.
What services do integrated air carriers provide?
Door-to-door services
Consistent schedule of pickup delivery windows
Move through hub and spoke networks
What services do nonintegrated air carriers provide?
On-demand
Air only service from airport to airport
Which two modes of transportation are most reliable?
Pipeline and truck
Which two modes of transportation are least expensive?
Pipeline and water
Which two modes of transportation are fastest?
Air and truck
Which two modes of transportation are most accessible?
Truck and rail
