Introduction
The US economy and transport management are closely interconnected since one of the fundamental foundations of the economy is trade, which involves delivering goods over long distances. In this regard, logistics issues are effective in the case of a sufficiently strong state economy. Management companies and other representatives of private and public businesses tend to focus on security, supply chain continuity, speed of delivery, inflation, and cost reduction in the field of logistics.
However, the direct impact on the transport management of the economy is rarely considered, and this study fills this gap. The economy can be in two states: boom and bust. In this regard, the main research question of this work sounds like this: how does the economy in its two states affect the management of transport and logistics, and which ways of management are the most qualitative in each of these two states?
The economy is the economic activity of society and the totality of relations that develop in the system of production, distribution, exchange, and consumption (Lundvall & Johnson, 1994). Logistics is the theory and practice of inventory management (Murphy & Knemeyer, 2018). An economic downturn is a long, steady decline in essential goods and services and a decline in business activity. Economic recovery is a state of a country’s economy characterized by increased production, an increase in its efficiency, a revival of economic activity in various fields, and an increase in living standards (Lundvall & Johnson, 1994).
Literature Review
Logistics and transport, coupled with the economy, form a cycle of mutual influence on each other. The clustering of developed cities and megalopolises completely repeats the systematic nature of logistics clusters, ending with the fact that there are many jobs in the field of logistics (Kumar et al., 2017). The development of technology throughout history has contributed to the development of transport speed, safety, delivery reliability, and many other valuable developments. All these factors contributed to the expansion of the geography of trade, the acceleration of the completion of trade transactions, and the establishment of nationwide trade relations, which required state control.
However, the reverse influence began to be investigated relatively recently. First, the technological features of modern transport are very much tied to fuel and, consequently, to oil prices (Hofmann et al., 2018). The regulation of oil prices has long been dependent not only on production volumes in the region but also on various political actions of countries in the international arena. Oil is used to produce gasoline and other fuels needed for road, aviation, and water transport.
The influence of the economy on the management of the transport system is manifested in the fact that the change in oil prices for a reason not related to the actions of the transport sector itself forces the regulation of logistics issues according to the new prices. While fuel-independent and non-polluting electric vehicles are among the current development trends, most of the transportation system in the United States still operates with fuel vehicles. Figure 1 below shows that the net income of one of the successful US transportation companies depends on fuel prices.
Secondly, in the US, economic policy is taking steps towards import substitution in cars and other industrial goods. In addition to the direct impact of economic trends on transport management, import substitution of materials indirectly and implicitly affects logistics systems, orienting companies to import either export or develop internal relations (Cooper et al., 2020). Often, many companies resort to using logistics outsourcing. Within the framework of transport management, the operating mechanisms of this type of outsourcing are a fundamental part of it (Zhu et al., 2017). Import substitution and outsourcing are becoming one of the most popular phenomena in specific business areas, significantly influencing the economy’s side on transport management and logistics.
Discussions
The economic trends described above that affect transport and logistics need to be examined in light of the economic boom and bust. When an economic crisis occurs, prices tend to creep down, including fuel. On the one hand, transportation in the transport sector is getting lower, but demand is also falling during the crisis. Nevertheless, many transport companies are going through the crisis without any significant losses since they can regulate the general drop in prices, including their services, without significant losses. When the economy is in positive dynamics, as a rule, it contributes to the development of infrastructure, in connection with which the developing regions benefit more from this than the developed ones.
The competition between logistics and transport companies constantly requires solutions adapted to the present day, and therefore geographic development contributes to the introduction of new transport opportunities in a new region at a reasonable price.
Managers in every trading and business sector are constantly faced with the dilemma of which processes can be left within the company’s activities and which ones require outsourcing. As a rule, they switch to outsourcing during an economic downturn since not every company can afford to maintain its own logistics system, especially in times of crisis. A well-built relationship between the transport company and the ordering company contributes to the fact that they renew their relationship on an ongoing basis after overcoming the crisis. During the economic recovery, companies tend to lose control of development opportunities when outsourced.
Potential New Solutions
In any case, the influence of the economy on logistics is described by many criteria, the main of which is fuel price. New solutions in this matter are already at an advanced stage of development. The creation of electric vehicles will not only contribute to an increase in safety, speed and also partially solve environmental problems, but also, in the case of the development of self-driving cars, will deprive many people of jobs. New specialists with a basic knowledge of robotics and technology will be required, and the current experts in the auto industry will be out of work. However, progress is relentless and always carries both pros and cons.
In import substitution and outsourcing, the main problem can be excessive competition, which will force many transport companies to keep prices low, which can lead to losses and closure. Even in the case of import substitution and the loss of specific customers, the development of international relations remains a crucial task for many transport companies, despite the influence of economic trends. Possible solutions lie in establishing exports, opening international branches, and working on accuracy and speed of delivery, so that technological innovations leave competitors behind.
Conclusion
Throughout history, the US economy has had different development trends that have influenced many sectors and companies in one way or another. In modern America, the main trends in this paper have highlighted import substitution and fuel pricing, which affect transport management and logistics. Further research will include the search for new innovative solutions in the management of transport systems, the study of existing solutions, such as the creation of electric transport and the culture of its use, and the study of other theoretical aspects that can also open up a new point of view for assessing the impact of the economy on logistics and transport.
References
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Hofmann, E., Solakivi, T., Töyli, J., & Zinn, M. (2018). Oil price shocks and the financial performance patterns of logistics service providers. Energy Economics, 72, 290-306.
Kumar, I., Zhalnin, A., Kim, A., & Beaulieu, L. J. (2017). Transportation and logistics cluster competitive advantages in the US regions: A cross-sectional and spatio-temporal analysis. Research in Transportation Economics, 61, 25-36.
Lundvall, B. Ä., & Johnson, B. (1994). The learning economy. Journal of Industry Studies, 1(2), 23-42.
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Murphy, P. R., & Knemeyer, A. M. (2018). Contemporary logistics. Faculty Bibliography Press.
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Zhu, W., Ng, S. C., Wang, Z., & Zhao, X. (2017). The role of outsourcing management process in improving the effectiveness of logistics outsourcing. International Journal of Production Economics, 188, 29-40.