Strategic Role of Transport in the Economy

It is almost universally accepted that transport has played a predominant role in the economic development of all modern civilizations. Production and consumption on the scale and tempo of today would be inconceivable without a well-developed and operated transport system forming a vital link in supply chain management logistics ("Transport and the Economy" www.rra.co.za).

Transport plays a critical part in the success of any city's economy. Since the purpose of an effective transport system is to promote the growth of the economy, transport services are of strategic importance in bringing together supply and demand. Transport is the means for distributing and utilizing the city's products ("Transport and the Economy" www.rra.co.za). Engaging in trade requires the movement of goods from one place to another, and if that movement is slow, obstructed, or otherwise ineffective, the progress of the economy is impacted. For this reason, most of today's largest cities were originally established next to seaports or navigable rivers where immediate access to transport for shipping goods was available. Transport by water is no longer the only option for the movement of goods, however. Cargo plane is also a viable option for transoceanic/ transcontinental transport. Within a continent, rail transport, cargo plane, and truck can be employed instead of or in addition to water transport.

The globalization of today's markets brings with i

have a profound effect on the economy of a city. As Robert Malone, executive editor of Inbound Logistics, writes: Goods efficiently sourced and manufactured, but not shipped, have limited value to any economy. Products on shelves require transportation from sourcing, transportation to manufacturing, and finally transportation to market to realize their potential value. Transportation, therefore, is the crucial link to economic value (Malone www.inboundlogistics.com). Malone goes on to describe the transportation approach of Logistics.com, which focuses on the transportation business as an application service provider (ASP) that serves both shippers and transport providers rather than focusing on complex supply-chain collaboration. Logistics.com uses IT to provide three hosted solutions that can be delivered via ASP or as plug-ins to existing solutions that do not run on the web: OptiManage offers online transportation management and analysis for shippers to automate and optimize shipper-transport provider transactions. OptiBid is an online procurement solution for shippers, assisting them to identify, secure, and monitor the optimal transportation provider for each movement throughout the world and across all transport modes. Op