Transportation is one of the world's largest
industries.
Its sectors range from taxis
to trucks, airplanes, trains, courier services, ships, barges, warehouses and
logistics services.
To a growing extent,
it now includes the use of robotics and artificial intelligence in terms of
self-driving cars and trucks, and eventually may include a significant level of
robotic delivery vehicles.
Robotics are
already providing a high level of automation in ports and warehouses, while
artificial intelligence is being applied widely to the supply chain.
In total, during 2018, core transportation
revenues in the U.S.
were an estimated $1,237.0 billion, according to Plunkett
Research estimates.
Worldwide, these
revenues were an estimated $5.1 trillion.
This includes air, rail, water, pipeline, courier and warehousing
segments.
At about 6% of global economic activity (GDP),
transportation's core sectors add up to a remarkably efficient industry,
considering the fact that transportation is a vital service to nearly every
other sector of the economy.
In fact,
thanks to increasing use of advanced information systems and such strategies as
intermodal containers (sending freight via containers that are easily
transferred from ship to rail car to truck as needed, without repacking), the
transportation industry's productivity is excellent.
Over recent years, globalization placed intense
new demands on the transportation and supply chain sector.
FedEx, for example, provides a wide variety
of freight and package delivery services in about 220 nations worldwide.
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Transportation is one of the world’s largest
industries. Its sectors range from taxis
to trucks, airplanes, trains, courier services, ships, barges, warehouses and
logistics services. To a growing extent,
it now includes the use of robotics and artificial intelligence in terms of
self-driving cars and trucks, and eventually may include a significant level of
robotic delivery vehicles. Robotics are
already providing a high level of automation in ports and warehouses, while
artificial intelligence is being applied widely to the supply chain.
In total, during 2018, core transportation
revenues in the U.S. were an estimated $1,237.0 billion, according to Plunkett
Research estimates. Worldwide, these
revenues were an estimated $5.1 trillion.
This includes air, rail, water, pipeline, courier and warehousing
segments.
At about 6% of global economic activity (GDP),
transportation’s core sectors add up to a remarkably efficient industry,
considering the fact that transportation is a vital service to nearly every
other sector of the economy. In fact,
thanks to increasing use of advanced information systems and such strategies as
intermodal containers (sending freight via containers that are easily
transferred from ship to rail car to truck as needed, without repacking), the
transportation industry’s productivity is excellent.
Over recent years, globalization placed intense
new demands on the transportation and supply chain sector. FedEx, for example, provides a wide variety
of freight and package delivery services in about 220 nations worldwide.
Transportation continues to evolve, no matter
whether the type of transport involved is on the road, on the sea or in the
air. For example, China had only about
200 kilometers of expressways in 1989.
Today, it has a massive system of state-of-the-art highways surrounding
the nation’s largest cities, in addition to a vast system of new high speed
railroads and hundreds of new airports.
India, likewise one of the world’s most populous nations, is woefully
behind in transportation infrastructure, especially highways, but it has hopes
to dramatically boost construction in this regard, with some funding to come
from partnerships between public and private entities. Other developing nations, including Brazil,
need to place more focus on infrastructure development as well, including ports
and airports, or risk seeing their economic growth derailed.
Business and technology trends have driven
immense changes in the transportation sector over the past three decades. The information age, with its introduction of
sophisticated databases that can track inventory levels and shipments on a
global basis via the internet, has created vast transport and logistics
efficiencies. As a result, supply chain
technology has been one of the fastest-growing segments in the information field.
Mobile apps are also bringing transportation
request and management directly to the smartphone. For example, Uber famously enables individual
passengers in many nations around the world to request transportation, tailored
to their specific needs, to be delivered rapidly. This business model is spilling over into
services for local and long distance trucking.
The Uberization of the trucking industry will have profound effects, and
is now in early stages, with many well-funded firms launching on-demand freight
services, including Uber Freight and Ryder in the U.S. and Manbang (“Full Truck
Alliance”) in China. Long-haul trucks
that are partly self-driving will eventually revolutionize this segment.
Next, the rapid adoption of outsourcing has led
many companies to turn to logistics services providers for all manner of
shipping support, including warehousing, scheduling and distribution
services. In many cases, outsourced
supply chain services provide just-in-time delivery of vital manufacturing
components or replacement parts, eliminating the need for costly on-site
warehouses filled with expensive inventory.
(These services are sometimes described broadly as “3PL” for Third Party
Logistics.) The sectors of transport,
supply chain management and logistics services are permanently intertwined,
creating efficiencies once undreamed of in the transportation arena.
All nations worldwide face a daunting task in
maintaining airports, seaports, highways and railroads that can handle commerce
and passenger traffic efficiently. The
amount of government funds available for roadway development is never enough to
keep up with long-term needs.
One of the biggest challenges facing the global
transportation sector over the mid- to long-term is a focus on lowering carbon
emissions and enhancing energy efficiency.
Airlines have placed immense orders for fuel-efficient jets like
Boeing’s new 787, which provides fuel efficiency gains of about 20% per
passenger mile, as well as engines that are quieter and burn fuel in a cleaner
manner. Sea-going ship operators are
under intense pressure to reduce contamination and emissions while in port and
at sea, and the latest designs, such as Maersk’s massive new Triple-E class of
ships, are making huge strides in this regard.
Additional developments in transportation
include the use of natural gas or electricity to fuel public transportation, as
well as the development of energy-efficient light rail. Natural gas is also slowly becoming a viable
fuel alternative for large trucks.
Meanwhile, consumers and government
transportation agencies worldwide have a renewed interest in light rail, high
speed trains and other forms of rapid transit.
Trains in many parts of the world are enjoying booming times,
particularly in China, as well as parts of Africa and Europe. Public transit ridership may get a boost in
major cities due to several factors, including traffic congestion and costs of
private car ownership, as well as the launch of recent light rail (such as the
system in Denver, Colorado) and subway systems (such as new projects in New
Delhi and Mumbai, India). The largest,
most congested cities may eventually implement new types of fees for cars and
trucks on the most highly traveled, inner city roads. This practice, sometimes referred to as
“congestion pricing” has already been tried in London. The point is to reduce vehicle traffic while
raising funds for public transit or road maintenance.
Another massive change is the growing interest
of governments in outsourcing their transportation infrastructure to private
operators and private ownership, often in public-private partnerships. Governments are short of cash. In some cases, they are selling or leasing
toll bridges and highways to private operators, reaping cash windfalls in the
process. Elsewhere, governments are
outsourcing their long-term highway development needs to private operators who
build new toll roads, relieving governments of the investment burden while
potentially creating large profits for the private operators. The results from this trend are mixed, as
there is sometimes consumer resistance to paying relatively high tolls for
highway use. For example, the SH 130
Concession Co., the private owner-operator of a major toll highway near Austin,
Texas, filed for bankruptcy in 2016 due to disappointing toll revenues. The Trump administration has indicated a high
level of interest in utilizing public-private partnerships to upgrade America’s
transportation infrastructure.