Themes: Lecture 1 • Transportation and Communications are one and the same – network economies Data transmission and freight transportation networks Principles of Transportation © 2020 Dr. Barry E. Prentice University of Manitoba Chapter 1 2 Themes: Lecture 1 • Transportation and Communications are one and the same – network economies • Innovations in transport have disruptive effects on trade and location decisions Before the telegraph, information was “glued” to the freight Communications (1844) Transportation Principles of Transportation © 2020 Dr. Barry E. Prentice University of Manitoba Chapter 1 4 Principles of Transportation © 2020 Dr. Barry E. Prentice University of Manitoba Telegraph Lines1846 Chapter 1 5 Themes: Lecture 1 • Transportation and Communications are one and the same – network economies • Innovations in transport have disruptive effects on trade and location decisions • Transportation innovations have a long life-cycle Themes: Lecture 1 • Transportation and Communications are one and the same – network economies • Innovations in transport have disruptive effects on trade and location decisions • Transportation innovations have a long life-cycle • Transportation costs are a natural barrier to trade & cargo demands specific treatment Truck Unloading and Loading: Time and Money Source: The Economist, August 7, 2021 Honeywell Robot Boston Dynamics “Stretch Pickle Robot “Dill” Themes: Lecture 1 • Transportation and Communications are one and the same – network economies • Innovations in transport have disruptive effects on trade and location decisions • Transportation innovations have a long life-cycle • Transportation costs are a natural barrier to trade & cargo demands specific treatment • Transportation serves a network of gateways and corridors Gateways, Hubs and Trade Corridors Principles of Transportation © 2020 Dr. Barry E. Prentice University of Manitoba Chapter 1 11 Themes: Lecture 1 • Transportation and Communications are one and the same – network economies • Innovations in transport have disruptive effects on trade and location decisions • Transportation innovations have a long life-cycle • Transportation costs are a natural barrier to trade & cargo demands specific treatment • Transportation serves a network of gateways and corridors • Economics provides a lens to help understand how and why supply chains and transportation networks operate Wheat to Bread Supply Chain Principles of Transportation © 2020 Dr. Barry E. Prentice University of Manitoba Chapter 1 14 Supply Chain as Derived Demands Principles of Transportation © 2020 Dr. Barry E. Prentice University of Manitoba Chapter 1 15 Themes: Lecture 1 • Transportation and Communications are one and the same – network economies • Innovations in transport have disruptive effects on trade and location decisions • Transportation innovations have a long life-cycle • Transportation costs are a natural barrier to trade & cargo demands specific treatment • Transportation serves a network of gateways and corridors • Economics provides a lens to help understand how and why supply chains and transportation networks operate • Derived supply and demand – supply chain logistics costs Supply shifters: Ø Labour Price Changes Ø Capital Price Changes Ø Technology Changes Ø Disasters/weather P S P* D q* Q Demand shifters: Ø Income Changes Ø Population Changes Ø Tastes & Habit Changes Ø Price Changes of substitutes and complements P S P* D q* Q P Retail DS P’b Pb PD PS Farm Pw P’w DD Q Bread/Wheat
