Office of Operations Freight Management and Operations

Appendix A
Economic Effects of Transportation: The Freight Story
Final Report

Exhibit 18: The relationship between IT-productivity growth in the economy at-large is mirrored in the freight transportation sector.

A circle of arrows depicting the relationship between IT, productivity growth, and advanced logistics. Advanced Information Technology, Advanced Logistics and Business Process Transformation Products, and Productivity are located on the circle in clockwise order.

IT facilitates robotics, JIT inventory management, real-time scheduling and related advances in manufacturing and transportation business processes.

Company take-up of capital investment in advanced logistics and business process transformation leads to greater labor productivity in manufacturing and transportation, with corresponding growth in real incomes and living standards. However, congestion and delay weaken the business case for company investment in advanced logistics.

Capital investment stimulates research and development which prompts further advances in IT.

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