Each transport more shares the common goal of fulfilling a derived transport demand, and each transport mode thus fills the purpose of supporting mobility. Transportation is a service that must be utilized immediately since unlike the resources it often carries, the transport service itself cannot be stored. Mobility must occur over transport infrastructures having a fixed capacity, providing a transport supply. In several instances transport demand is answered in the simplest means possible, notably by walking. However, in some cases elaborate and expensive infrastructures and modes are required to provide mobility, such as for international air transportation. Transportation is a market a composed of suppliers of transport services and users of these service. Well-functioning transport markets should allow transport supply to meet transport demand so that transport needs for mobility are satisfied. An economic system including numerous activities located in different areas generates movements that must be supported by the transport system. Without movements infrastructures would be useless and without infrastructures movements could not occur, or would not occur in a cost efficient manner. This interdependence can be considered according to two concepts, which are transport supply and demand :-
Transport Supply
The capacity of transportation infrastructures and modes, generally over a geographically defined transport system and for a specific period of time. Supply is expressed in terms of infrastructures (capacity), service (frequency) and networks (coverage). Capacity is often assessed in static and dynamic terms where static capacity represents the amount of space available for transport (e.g terminal surface) and dynamic capacity are the improvement that can be made through better technology and management. The number of passengers, volume (for liquids or containerized traffic), or mass (for freight) that can be transport per unit of time and space is commonly used to quantity transport supply.
Transport Demand
Transport needs, even if those needs are satisfied, fully utilized or not at all. Similar to transport supply, it is expressed in terms of number of people, volume or tons per unit of time and space.
The supply side of transport market can be divided in two categories :-
- Third party provider. Transport companies offer transport services to users who require such services, often on open markets. Transport users pay for the services delivered according the terms of the agreed contract. Examples, third party trucking companies, container shipping lines, railway operators and bus companies. Competitiveness is a key advantage of third party as a providers to offer better and lower cost services for their customers. There is also the risk of fluctuating prices due to changing market conditions and that transport capacity may not be available when a customer requires it.
- Own account transportation. The transport user deploys his own transport means to move freight or to travel. Example, motorists using private cars or large companies owning a fleet of trucks or rail. The transport user has a direct access to known capacity, but at the risk of a lower level of asset utilization. Example empty movements or idle equipment.
