Is Transport, Either Globally or Nationally (Australia) a CommodityIntroductionTransport is a distinct aspect of any society or economy for that matter. Transport demonstrates a close connection to the style of life, the variety and location of activities and more importantly products and services that are accessible or available for utilization. With the progress in globalization and advancement in technology, the importance of transport has increased owing to the great need to supply products, processes, people, capital, information and technology among other resources on a global scale as discussed by Rodrigue (2012).
Mathew & Rao (2006) concurs by stating that transport has practically generated changes in the style of living and influencing how communities are organized and hence, having a fundamental impact on development of civilizations. Presently, transport systems are incorporated in commodity chains which has resulted in increasing rate of interconnectedness between production, supply and market demand thus, effective and efficient systems of distribution supporting international commodity chains/ networks as noted by Gereffi & Miguel (1994). On the other hand, commodity is defined as what provide value in the market environment and therefore, a commodity is an item of development and as such, is the rational pivot point of development efforts (Hartwick, 1998).
This informs this report, which is a literature review seeking to analyze the question: Is Transport, either globally or nationally (Australia) a commodity. Literature reviewDefining transportAccording to Tseng et al. (2005), transport can be defined as the process of moving goods and raw materials from the producer to the manufacturer and shipment of finished products from the manufacturer to the end users. Often, the transportation operations influence the efficiency of the movement of products.
According to the author, the progress in the methods of transport and the transport management principles enhances the speed of delivery, the moving load, the quality of service, the operation costs, energy efficiency and more significantly, the utilization of facilities as supported by Rodrigue (2012). Chang (1988) argues that transport forms a crucial part in the management of logistics since insufficient and ineffective transport systems makes it difficult to generate the logistic benefits into full play. Blauwens(1988) argues that transport is a commodity by indicating that an efficient and efficient transport system in carrying out logistic activities offers enhanced logistics efficiency, it minimizes operation costs and more importantly it ensures and improves service quality (Blauwens, 1988).
It is important to mention that transport is the most valuable and critical variable among the elements of business logistic systems since more than two thirds of expenses of business’ logistic costs are allocated to transportation as reported by Chang (1988). The author notes that on average, the transport costs account for more than 6% of market revenue and more than 40% of logistic costs.
Primarily, transport infrastructures allows raw materials and finished products to move and it offers timely and global efficacy to enhance value-added under the lowest cost principle. More often than not, transport impacts on the outcomes of logistic activities and more so on production and sales (Hartwick, 1998). Defining commodityAccording to Rodrigue (2012), commodities refers to resources that can be utilized and which can be amassed for a duration of time, substituted as part of a business deal or bought in certain markets. According to the author, there are commodities which are fixed and it is impossible to transfer them save for title which encompasses land, logging, mining and fishing among others, whose value is generated from the utility and the prospective level of extraction.
In addition, there are bulky commodities such as metals, oil, sugar, livestock and coffee among others whose value is generated from utility, supply and demand. Tseng et al. (2005) highlights that there are strategic commodities and for items to qualify as such they ought to have accessible existing and prospective domestic and foreign market in relation to demand.
Sufficiency to enhance business growth and development, prospective to improve income and it should generate high degree of support from public and private sector in terms of infrastructure, financing and technology.