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How Automobiles Work

What does the future look like for the transportation
and logistics industry? Let’s talk about the details. Today, we’re going to talk about the future
of transportation, shipping, and logistics. Now, altogether the transportation sector
is a really broad and vital part of the world’s economy. At roughly about 6% of GDP, or about 6% every
economic activity that goes on in the world, is related to transportation, shipping, and
logistics. It’s a huge industry, and if you think about
it, if you really get into the niches of where transportation operates, it’s everything from
taxicabs and Uber cars to warehouses, railroads, ships, airplanes, buses, public transports
of all types–it’s really just a very, very big and all-encompassing industry that affects
virtually everyone of us all day long in so many different ways. Let’s start with one of my favorite topics,
and that’s airlines. So clearly airlines are a very, very important and major part of the
whole transportation chain. Airlines not only move people; they also move
a lot of manufactured goods, so things that are needed in a hurry that are small enough
and light enough to be shipped for manufacturers in China, let’s say, to companies and warehouses
on the west coast or the east coast of the United States, that happens all day long. And the airlines are moving people. Now, for a long time there was a kind of a
battle between the established, or what are called “legacy airlines”–and that would be
companies like Singapore Airlines or American Airlines. And the upstart “discount,” or more
popularly priced airlines. But those distinctions are starting to blur:
the legacy airlines, in order to remain competitive, are selling on prices and services that pretty
much match the discount airlines, so it’s really hard to tell the difference from one
to the other except that a lot of the legacy airlines still make a lot of money by offering
a small number of seats in what they might call “first class,” or “business class,” seats
in the front of the plane, and then really cram people into the back of the plane, just
like the discount airlines do, and they have to compete on price; they have to compete
heads-up. Now, what about other sectors? Let’s look at ships. So the development of the container–those
40-foot-long boxes and 20-foot-long boxes–that very efficiently and conveniently hold goods
as they’re being shipped across the oceans and then can be moved in what’s called an
“intermodal method”–a container can come off a ship by a crane, be put on a railroad
car, and then be moved again from a railroad car to a truck for the last mile of delivery. Containers revolutionized the whole logistics
part of the supply chain, and almost every sector of the transportation system now can
use those containers intermodally. And part of that is a drive for more efficiency. All parts in the transportation system are
looking to make things a) more efficient, burn less fuel because, as we now, fuel is
very expensive, and number 2 try to reduce carbon emissions. Now, another area that we’re seeing a lot of
changes in is trains. So trains, again, like trucks, ships, and
airplanes, are having to become more efficient: they want to burn less fuel, they want to
spend less time idling in the trackyards, they want to get more freight delivered with
fewer people involved and less fuel burnt. So we’re seeing some real application of advanced
technology, advanced software, to change the way trains are routed, number 1; number 2,
we’re seeing the construction of better equipment; and we’re seeing some unique government-funded
and private company-funded train initiatives for passengers today, as well. Now, the trucking industry continues to grow
all around the world; again, that last mile of delivering goods really has to be done
by truck–we can’t have a railroad track running through every neighborhood. Most of the big cities in the world are not
only on the coast but also inland, so we can’t get big ships into all the cities. We really, really need the trucking industry. Now, for a really great view of the entire
transportation, supply chain, and logistics sector be sure to see our Plunkett’s Industry
Almanac for that title that we republish and rewrite every year–it’s a standard in businesses,
libraries, and college campuses all over the world. And be sure to see the related Transportation
and Supply Chain Industry Research Center at Plunkett Research Online. Thanks.

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