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Importance of Transportation to the Economy & Society Intermediary Function Derived Demand

Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government.

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Importance of Transportation to the Economy & Society Intermediary Function Derived Demand

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  1. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  2. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  3. Importance of Transportation to the Economy & Society Impact on the U.S. Economy Impact on the Environment Impact on Land Use and Values National Defense Geographic Specialization Production Economies Competition

  4. Importance of Transportation to the Economy & Society Impact on the Economy Logistics and Gross Domestic Product Transportation and Employment Government Expenditures on Transportation

  5. Importance of Transportation to the Economy & Society Impact on the Economy Total Logistics Costs Cost of Carrying Inventory Cost of Freight Transportation Shipper Related Costs (i.e., Order Processing, Damage Claims, etc. Cost of Logistics Administration (i.e., Management)

  6. Importance of Transportation to the Economy & Society Impact on the Economy Logistics and Gross Domestic Product (dollar figures in billions) US Gross Domestic Product for 2012 $15,680 Total Value of Business Inventory 2,269 Cost of Carrying Inventory Interest 3 Warehousing 130 Tax/Obsolescence/Depreciation/Insurance 302 Inventory Carrying Cost 434 Carrying Cost as a Percentage of Value of Inventory 19.1% Carrying Cost as a Percent of GDP 2.8%

  7. Importance of Transportation to the Economy & Society Impact on the Economy Logistics and Gross Domestic Product (dollar figures in billions) • US Gross Domestic Product for 2012 $15,680 • Cost of Freight Transportation • Motor Carriers $647 • Railroads 72 • Air (17 Intn'l, 16 Domestic) 33 • Water (28 Intn'l, 5 Domestic) 35 • Oil Pipelines 13 • Forwarders 37 • Total Freight Transportation Cost $837 Freight Transportation Cost as a Percent of GDP 5.4%

  8. Importance of Transportation to the Economy & Society Impact on the Economy Logistics and Gross Domestic Product (dollar figures in billions) • US Gross Domestic Product for 2012 $15,680 • Inventory Carrying Cost 434 • Cost of Transportation 837 • Shipper Related Costs 10 • Logistics Administration 51 • Total Logistics Cost 1,332 Total Logistics Cost as a Percent of GDP 8.5%

  9. Importance of Transportation to the Economy & Society Impact on the Economy Logistics and Gross Domestic Product (dollar figures in billions) US Gross Domestic Product for 2002 10, 640 Total Transportation Cost for 2002 (Incl Passengers) 1,305 Just Transportation Cost as a Percentage of GDP 12.3%

  10. U.S. Freight Transportation Market (2007) Truckload Market $573 Billion Total Freight Market $848 Billion Other $78 Air $41 Rail $58 Private Fleets $355 Truckload $573 For Hire $218 LTL/Parcel $98 Source: American Trucking Associations

  11. Number of Trucking Companies (2006) Total Number –all Types 794,795 For Hire 290,629 37% Private Fleets 504,166 63% Less than 1,000 of the for-hire carriers are LTL

  12. Importance of Transportation to the Economy & Society Impact on the Economy Nation’s Freight Bill (dollar figures in billions) • Year RR MC PL WC Air Other Total %GDP • 19609,02832,289 895 3,487 354 1,71447,767 9.27 • 1970 11,86962,4941,3965,2571,1711,79183,978 8.27 • 1975 16,50984,8432,2208,2211,8382,208115,839 7.25 • 1980 27,858155,3317,54815,4984,0133,488213,736 7.79 • 1985 29,150205,6458,91018,4486,8174,642273,612 6.75 • 1990 30,067270,7768,50520,12113,7067,774350,949 6.09 • 1995 34,343348,1099,05124,87318,7359,341444,452 6.10 • 1996 35,059368,5458,63524,96520,3979,909467,510 6.09 • 35,349 401,6848,73525,34622,67410,589504,377 6.22

  13. Importance of Transportation to the Economy & Society Impact on the Economy Nation’s Freight Bill (dollar figures in billions) Year Total Air RR Water MC Transit Pipe Support Whse 1998 275.8 48.7 24.4 7.0 91.0 14.3 6.9 62.6 22.0 1999 287.4 52.9 24.8 6.4 91.9 14.7 7.7 66.2 23.4 2000 301.6 57.7 25.5 7.2 92.8 14.5 8.7 70.2 25.0 2001 293.6 57.0 24.8 6.8 87.9 14.5 8.3 69.4 24.4 2002 300.2 62.8 24.4 5.6 87.5 14.6 9.6 70.6 25.6 2003 306.2 67.2 25.7 5.4 88.9 14.3 9.3 70.3 26.9 2004 322.3 71.1 26.9 5.9 95.8 14.3 9.3 72.1 28.7 2005 335.2 75.6 26.0 6.6 100.1 14.4 11.1 73.0 31.5

  14. Importance of Transportation to the Economy & Society Impact on the Economy Government Expenditures (dollar figures in billions) Year Rail Highway Air Water Pipe Transit Admin Total 1980 2.4 34.6 4.5 5.7 RZ 8.9 0.2 56.2 1985 1.1 46.6 5.1 7.9 0 16.3 0.2 77.2 1990 0.5 62.6 5.5 12.6 0 19.3 0.2 100.7 1995 1.1 90.1 6.6 19.3 0 25.5 0.8 143.3 2000 0.8 119.8 7.6 22.5 0 34.8 0.7 186.3 2001 0.8 127.0 10.6 32.8 0 39 0.8 211.1 2002 1.3 133.5 8.0 37.0 0 41.6 2.1 223.7 2003 1.2 138.5 11.8 34.2 0.1 41.6 10.7 238.1

  15. Importance of Transportation to the Economy & Society Impact on the Economy Transportation and Employment (in millions) 1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006 Total US Labor Force 90 97 109 117 132 132 130 130 131 134 136 Transport-Related Labor Force 8.5 9.2 10.1 10.5 13.7 13.5 13.2 12.9 13.0 13.1 13.2 Percent of Total 9.4 9.5 9.2 9.0 10.4 10.3 10.1 9.9 9.9 9.8 9.7

  16. Importance of Transportation to the Economy & Society Impact on the U.S. Economy Impact on the Environment Impact on Land Use and Values National Defense Geographic Specialization Production Economies Competition

  17. Importance of Transportation to the Economy & Society Impact on the Environment Natural Resources Energy Steel Cement Aluminum Rubber Land Pollution Air Land Water Noise Visual

  18. Importance of Transportation to the Economy & Society Impact on the U.S. Economy Impact on the Environment Impact on Land Use and Values National Defense Geographic Specialization Production Economies Competition

  19. Importance of Transportation to the Economy & Society Impact on the U.S. Economy Impact on the Environment Impact on Land Use and Values National Defense Geographic Specialization Production Economies Competition

  20. Importance of Transportation to the Economy & Society Impact on the U.S. Economy Impact on the Environment Impact on Land Use and Values National Defense Geographic Specialization Production Economies Competition

  21. Importance of Transportation to the Economy & Society Production Economies $/Unit C1 C2 Production Cost Q2 Output (Q) Q1

  22. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  23. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  24. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  25. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  26. The Need for Continuous Operations Peak Demand Inability to Store Inventory Impact of Shutdowns

  27. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  28. Impact on Business Decisions in Other Areas Vendor Selection System Planning/Location Packaging Handling Systems Production Cost and Output Prices and Sales Market Territory Inventory Planning

  29. Impact on Business Decisions in Other Areas Vendor Selection System Planning/Location Packaging Handling Systems Production Cost and Output Prices and Sales Market Territory Inventory Planning

  30. Impact on Business Decisions in Other Areas Vendor Selection System Planning/Location Packaging Handling Systems Production Cost and Output Prices and Sales Market Territory Inventory Planning

  31. Impact on Business Decisions in Other Areas Production Cost and Output Increase output and decrease costs or Cut production and increase costs

  32. Impact on Business Decisions in Other Areas Cost and Production Level $/Unit C2 C1 Production Cost Q1 Production Level (Q) Q2

  33. Impact on Business Decisions in Other Areas Prices and Sales Increase costs and raise prices Raise prices and decrease sales

  34. Impact on Business Decisions in Other Areas Prices and Sales Price P2 P1 Demand Quantity Q3 Q2

  35. Impact on Business Decisions in Other Areas Production Cost and Output Decrease sales, cut production and increase costs

  36. Impact on Business Decisions in Other Areas Cost and Production Level $/Unit C3 C2 C1 Production Cost Q1 Production Level (Q) Q3 Q2

  37. Impact on Business Decisions in Other Areas Prices and Sales Increase costs and raise prices Raise prices and decrease sales

  38. Impact on Business Decisions in Other Areas Prices and Sales Price P3 P2 P1 Demand Quantity Q4 Q3 Q2

  39. Impact on Business Decisions in Other Areas Production Cost and Output Prices and Sales Production Cost and Output Prices and Sales Etc., etc., etc.

  40. Impact on Business Decisions in Other Areas Vendor Selection System Planning/Location Packaging Handling Systems Production Cost and Output Prices and Sales Market Territory Inventory Planning

  41. Impact on Business Decisions in Other Areas Transportation and Market Territory $ Seller A Seller B r1 r1 D1 Distance

  42. Impact on Business Decisions in Other Areas Transportation and Market Territory $ Seller A Seller B r1 r1 r2 D1 D2 Distance

  43. Impact on Business Decisions in Other Areas Transportation and Market Territory $ Seller A Seller B r1 r2 D2 Distance

  44. Impact on Business Decisions in Other Areas Vendor Selection System Planning/Location Packaging Handling Systems Production Cost and Output Prices and Sales Market Territory Inventory Planning

  45. Transportation-Inventory Trade-Offs $ Total Cost Inventory Carrying Cost Transportation Cost Express WC LTL TL RR Mode

  46. Transportation-Inventory Trade-Offs $ Total Cost Inventory Carrying Cost (Cycle Stock) Transportation Cost Express WC LTL TL RR Volume/Shipment Size

  47. Transportation-Inventory Trade-Offs $ Total Cost Inventory Carrying Cost (In Transit) Transportation Cost Express WC LTL TL RR Transit Time

  48. Transportation-Inventory Trade-Offs $ Total Cost Inventory Carrying Cost (Safety Stock) Transportation Cost Express WC LTL TL RR On Time Performance

  49. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

  50. Importance of Transportation to the Economy & Society Intermediary Function Derived Demand Geographic Scope of Operations The Need for Continuous Operations Impact on Business Decisions in Other Areas The Role of Labor The Role of Government

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