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The Changing Economics of Transportation and Logistics

May 26, 2017, 20:07 UTC+3
1 pages in this article

Reduction of time and costs required to travel long distances is starting to substantially change the traditional social, economic and business relations. High-speed public transport, unmanned aerial vehicles, 3D printing, teleworking and remote service technologies have all combined to open up brand-new opportunities for comfortable life and labour. Yet, the pace of change does not only depend on the development of technologies, but also on their economic relevance.

High-speed rail links turn the already thickly populated metropolises and regions into huge urban agglomerations where people work and have fun, while living elsewhere.

  • For example, in London and Paris high-speed trains make it possible to get downtown from the most outlying districts in less than an hour.
  • With a high-speed train network of 1,180 km running through 11 cities, Japan is one of the global leaders in high-speed transportation development. In China, the high-speed railway goes through the regions with a population of some 300 million people.

Unmanned aerial vehicles (UAVs) are becoming increasingly popular in the service industry.

  • Late last year, Amazon piloted its first drone delivery in the UK.
  • Starting from 2018, Japan is planning to deploy drones on a permanent basis to deliver goods to remote sparsely populated areas and elderly people.
  • The UN intends to use drones to transport small humanitarian supplies, including medicines and vaccines.

In addition to the social benefits, the use of UAVs can have a positive economic effect.

  • According to the Association for Unmanned Vehicle Systems International, the integration of commercial drones into the US skies will create 70,000 new jobs in the course of three years.
  • UPS estimates show that by using drones the company can shave off 1.6 km for each of its 66,000 drivers a day and save up to USD 50 million a year.

3D printing is yet another technology that opens up brand-new opportunities in manufacturing and deliveries.

  • Development of small-scale production facilities located in close proximity to the end consumer can materially change the structure of manufacturing capacities and logistics processes and provide people living in remote regions with required supplies.
  • The industry is rapidly expanding. According to Wohlers Associates, in 2016, additive manufacturing grew by 17.4% (vs 25.9% in 2015) to USD 6 billion.

Information technologies also change our perceptions of work.

  • Development of IT is the driver behind progressive growth of the freelance services market. While in Russia the share of remote workers is still below 1%, in the US and Europe some 20–30% of the economically active population work as freelancers (the McKinsey Global Institute data).
  • Many companies allow their staffers to work from home, too. According to the J'son & Partners Consulting projections, one in every five employees of Russian companies will be teleworking by 2020.
  • The rise in work-from-home policies also plays an important social role, for instance, by providing more job opportunities for people with special needs.

The spread of high-speed internet helps increase accessibility of healthcare services through remote consultations and diagnoses.

  • Up to now, progress in that direction was hampered in Russia by the outdated legislation, but the Government has sent to the State Duma a bill to bridge the gap recently.

All these trends are gradually changing the way we live.

  • Teleworking opportunities and increasing accessibility of goods and services are raising the standards of living in outlying areas.
  • Modern cities are transforming into huge economic, social and cultural clusters enabling people to combine quiet living away from the city with work and leisure benefits the downtown has to offer.



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