3.

2 - Study Questions

1. What is the role of government in air transportation from an economic and safety

standpoints?

 In air regulations, the government finances air carrier terminals. The air carrier pays the

government entity for the use of terminals through landing fees, rent and lease payments,

taxes on fuel, and aircraft registration taxes. The federal government has the responsibility

of financially assisting the states in the construction of airport facilities. Then various states

and local government assume responsibility of operating and maintaining the airports.

 The government is responsible for safety regulations on aircraft manufacturing and

maintenance. This regulation keeps passengers, employees, and freight safe (Coyle, 2015,

p. 235).

2. Discuss at least two current issues facing the air industry and how each impacts the

industry, its customers and employees.

 The current issues facing the air carrier industry are safety, security, and technology.

 Airline safety is of great importance. It keeps the aircraft, passengers, employees, and

freight safe before, during, and after flights. Security has been a focus since 9-11. This

focus on security keeps everyone safe, but not without a cost. Customers experience longer

lines and feel personally violated due to strict searches that some customers feel is way

over the top. (Coyle, 2015, p. 277)

3. Provided that pipelines account for more than 20 percent of the intercity ton-miles but

less than 5 percent of the revenue paid by shippers to transportation companies, explain
 what factors account for this contrast and whether this situation is likely to change.

Defend your answer by providing additional examples and references.

The factors account for the contrast of pipelines account for more than 20% of the intercity

ton-miles but less than 5% of the revenue paid by shippers to transportation companies:

Pipelines are an important form of transportation of goods and account for the movement of

more than 20% of the intercity ton miles. However, pipelines are limited in the variety of

commodities they carry, and the regions they carry to.

The pricing structure of the pipeline industry does not commonly include differential pricing,

and revenue is controlled by per barrel and minimum volume pricing. Pricing to the shipper is

very low, and this accounts for the low percentage (less than 5%) of revenue from the pipeline

industry. The pipeline industry is described as mature and stable; if nothing changes it is not

likely that the low revenue will change. As part of the total revenue, unless the growth of the

pipeline industry were to surge, it will still produce a lower revenue than competing, faster

growing alternative modes of transportation.

However, should a new commodity be most appropriate for pipeline shipment, a change in

revenue could occur; but only if there were no competing mode of transportation for the

commodity. (Coyle, 2015, p. 235)

4. Water carriers played a dominant role in the transportation system of the United States

in the 18th and 19th centuries. Explain why their relative position has declined during

the 20th century whether or not they still an important component of the total

transportation system. Substantiate your answer with examples and references.

  Even though water carriers are the second most efficient form of goods transportation, the

transportation energy costs for water transport has rose more rapidly than other modes.

This makes it an unlikely choice for most manufactures.

 Water carriers are still an important part of the transportation system.

 Many manufacturers and suppliers would experience serious problems in the maintaining

their competitive position without the availability of low cost water transportation (Coyle,

2015, p. 290).

Reference:

Chapter 7 and 8

Coyle, N. G. (2015). Transportation: A Global Supply Chain Perspective (8e) . Cengage Learning.