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Role of Motor Carriers in Economic Development

The United States greatly depended on rail transport in the 19th century. This is evidenced by figures that represent total haulage by rail road. Though the trend as compared to motor carriage seems to be declining, it surely represented the great bulk of total freight cargo. In the 1950s, rail was transporting an average of 1.4 billion tons of freight while in the 1980s it increased to 1.6 billion. In the 1990’s, it hauled an average of 2.1 billion tons of freight (Coyle, Barti & Novack, 2006). These figures represent a slight increase attributed to the rise of motor carriers in the 20th century. The motor carriers overtook the rail roads in capacity transported. This information basically represents an overview of the United States manufacturing and trade trend. Despite the motor carriers’ development, the tonnage of cargo hauled by rail is increasing from one year to the other (Coyle, Barti & Novack, 2006).

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Factors that move the economy rely on the transport industry. Manufactured commodities and labour contribute to the development of economy. Movement of labour is very important in economy’s growth. This realization by the government during the reign of President Eisenhower saw establishment of the National Systems of Interstate and Defence Highways. President Eisenhower signed the bill into law in 1956, a sign that transport industry, if well utilized, could lead to the steady growth of economy (Coyle, Barti & Novack, 2006).

The enactment of the bill saw a gradual process of construction of interstate road network. This system is largely funded by the federal government through taxes levied on fuel. There is substantial amount of return to the federal government from the use of motor carrier network.

The increase in cargo is clear evidence that production levels and trade has increased. This translates to economic growth of United States. The transport network is a resource necessary for economic development. The government obviously invests a lot to keep it in its state, facilitating the movement and transport of freight cargo. In return, these resources generate income from taxes levied on fuel among other sources.

In 2002, the United States’ government invested close to $ 585.3 billion on the Interstate Highway transportation. The revenue or returns accrued from the motor carriers only added to a total of $10.51 billion revenue freight ton per miles in 2001. This represented only twenty eight percent of the ton per mile freight transported by all modes. The motor carrier industry alone formed a source of income for close to 1.8 million people with an average payment of $40,365 annually (Coyle, Barti & Novack, 2006).

This analysis presents a case to justify that the United States economy is driven by the transport industry. The latter’s backbone is the motor carrier network that has traversed all the cities. A look at the figures above reveals that the annual GDP of the country greatly benefits from proceeds of the transport industry and especially the motor industry. The revelation of this analysis lies in the way the motor carrier industry is structured.

The structure of the motor carrier industry favours the high demand of transport. It is divided into for-hire and privately owned hauliers. This ensures that the industry is well utilized in the day to day transport of manufactured and high value products. The major industries that use motor carrier are food producers, consumer and industrial goods. These represent the strategic market niche. The goods are cheap to transport by road compared to the allied industry products and equipment. The products they have majored in transporting are the ones which move the economy (Coyle, Barti & Novack, 2006).

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Freedom of entry and lack of regulations are constraints to venture in this industry. It contributed to the growth of the motor carriers industry and the economy. With many players in the industry there is intense competition and competition makes more businesses and growth economically (Coyle, Barti & Novack, 2006).

Thus the motor carrier industry has greatly contributed to the growth of the United States economy in this twentieth century. This is when there was growth in production and establishment of markets countrywide. Customers could be reached courtesy of the good inter state motor carrier network. This enabled the factors of demand and supply to drive the production and supply of commodities. This is the ultimate role of the motor carrier networks.

Reference

Coyle, J. C., Barti, E. J., & Novack, R. A. (2006). Transportation. 6TH e.d. New York: Free Press, 95 – 126.

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