Abstract
This paper is related to observing the effects that the economy of the United States of America has had on transportation and logistics management during the last two years. The paper focuses on the modern trends of the economy of the United States of America, considers international trends that the USA accepts, and provides an overview of global changes affecting national economies. There are examples of changes to the U.S. economy, which triggered the alterations in logistics and transportation systems.
Literature review on the topic illustrates the main problems that the economy of the USA faced during the past two years and the way they influenced different economic relations, including logistics. Then, the potential new solutions to revealed problems are suggested, in addition to the ones in the cited peer-reviewed articles. In the end, these solutions are discussed from different perspectives.
Introduction
No doubt, the economy, its processes, and phenomena are tightly connected with all spheres of public life and are affected by each other. This can be related to both national and international economies, although their spheres of influence vary. Moreover, the influence of the national economy on the processes that occur inside the country is much stronger and has more profound consequences than, for instance, its impact on international processes. Therefore, the elements of national economies should be analyzed separately and systematically to form a full image of the economy’s conjuncture. On the other hand, a clear perception of the economy’s impact on each element of the economic system may contribute to a more profound comprehension of patterns and causal relationships in national and international economic relations.
This research is devoted to revealing and analyzing the effects that the U.S. economy has on transportation and logistics management, including modern tendencies and considering the globalization trend. In this paper, such topics as sustainability implementation in economic processes, swift to ecologically safe transportation, social responsibility, and economic growth are discussed. In addition, the research contains observation of a recent economic crisis in the U.S. and its influence on people’s behavioral patterns, combined with the variations of demand. Moreover, the study reflects the effect that the economic peculiarities of the U.S. system have on the management in the sphere of transportation and logistics.
Overall, the primary purpose of this paper is to provide a complete overview of the influence of the U.S. national economy on transportation and logistics management models and performance. This paper would try to answer the question: how do the national economy, its trends, and current conjuncture affect transportation and logistics management in the U.S.?
The importance of the topic can be fully described by the current events that occur in the U.S. national economy and the global economy in general. To be more specific, these events concern global changes in economic processes, including the repercussions of the coronavirus-related economic crisis, swifts in people’s behavior, and alterations of the product’s potential. Considering the necessity to predict the probability of new changes to adapt to the altered conditions faster, it is required to understand the schemes according to which the economy affects its elements. Moreover, the issue of adapting effectively and quickly is crucial for the business as effective logistics management is one of the critical factors of success for a company.
Since this study touches on economic processes, it contains a range of terms that should be defined to avoid any inconsistencies. Third-party logistics is an “outsourcing philosophy in logistics and supply chain industry” (Ali et al., 2019, p. 14). Another definition is “a system where an organization (a third party) provides logistics services to companies in need of inventory management and distribution” (Third-party logistics (3PL), n. d.). Logistics is a “process that plans, implements and controls… effective… flow and storage of goods, services and information between the point of origin and the point of consumption” (Is logistics the same as supply chain management?). These terms mainly concern the primary theoretical side of the study.
Sustainability is a concept of development that considers environmental and economic aspects and social responsibility (Purvis et al., 2019). The spheres sustainability touches on are illustrated in Figure 1 – Three pillars of sustainability (Purvis et al., 2019). According to IBM, “Big data… applies to datasets whose size or type is beyond the ability of traditional relational databases to capture, manage and process the data with low latency” (Big data analytics, n. d.). Internet of things “is a system of interrelated computing devices, objects, animals or people with unique identifiers and ability to transfer data over a network without human-to-human or human-to-computer interaction” (Gillis, n. d., para. 1). These are the main terms required for understanding the discussion on the topic provided further.
Literature Review
Research on the U.S. Economy
Recent studies related to the U.S. economy are mainly devoted to the following topics: the global role of the United States of America, economy, the impact of COVID-19 pandemic, oil supply shocks, effects of U.S. withdrawal from the Paris Agreement. Undoubtedly, researchers are concerned with more issues while studying the economic changes and interrelations of its elements. The literature review has unveiled that there is no common topic at the moment, meaning that all the mentioned issues are equally researched.
The range of research topics published during the past five years is wide. For instance, the study by Sharif et al. reflects the impact of all the occurrences and events of 2020 on the U.S. economy (2020). It discusses oil prices, stock market, geopolitical risk, policy uncertainty nexus, and, of course, the COVID-19 crisis and pandemic. Generally, the study provides an overview of economic processes in 2020 and focuses on the economic effects of the coronavirus.
Moreover, the recent research of the U.S. economy touches on the topic of its global influence. For example, Kose et al. focus on the global role of the U.S. economy in their study (2017). The research mainly covers the issue of linkages between the economy of the U.S., global economy, and national economies of other countries (Kose et al., 2017). In this regard, the authors reveal trade, financial and commodity links that connect the U.S. and the world. Additionally, the study assesses the power of the U.S. economy’s impact on other countries and its potential to trigger global changes.
Research on Transportation and Logistics Management
Considering studies on transportation and logistics management, the situation is quite different from the research on the U.S. economy. Regarding logistics, research is more detailed and narrowly targeted and covers specific areas of the interaction between the economy and logistics. For instance, the research touches on the sustainability of the economy, intelligent transportation systems, strategic transportation for importing oil, and more. Therefore, there is no doubt that transportation and logistics management reflect the topic better than general research on the U.S. economy.
Regarding the relation of the mentioned above topics, it can be observed through several issues. Firstly, transportation and logistics management are strongly related to the green economy and sustainability trends in general. For instance, the study by Ali et al. focuses on sustainability in logistics and transportation especially considering the concept of third-party logistics (2019). The research contained numerous hypotheses and was conducted in the form of a survey that targeted a few groups of professionals connected with third-party logistics. This study revealed that third-party logistics contributes to the increase in efficiency of logistics management because it implies implementing the elements of sustainable management to the logistics sphere.
Trends of the U.S. Economy
Sustainability
Considering the studies that refer to the effect of the U.S. economy on transportation and logistics policies and management, there is no direct research on this exact topic. However, the chosen problem may be analyzed via a combination of a few peer-reviewed articles, which would provide an image of the economy having an impact on the transportation and logistics system. The first element of the economy that influences transportation and logistics management is related to the trends that occur in the U.S. economy. For example, this element includes sustainability discussed above in the example of a study by Ali et al. (2019).
More particularly, the study has revealed that the “sustainable concerns are key elements of the environmental, economic, social and operational performances” (Ali et al., 2019, p. 29). In the meantime, this study reflects the trend that covers the whole economic system of the U.S. – sustainability implementation in all possible spheres. Hence, sustainability as a feature that the U.S. national economy is trying to implement has affected the sphere of logistics and transportation and has proved that it has the potential to increase logistics effectiveness.
Moreover, sustainability includes two more aspects that influence logistics and transportation management. They are social responsibility and economic development, and the U.S. economy affects them as well (Ali et al., 2019). For example, sustainability initiatives of third-party logistics – transportation, warehousing, and packaging – influence economic, environmental, social, and operational performance and help improve logistics efficiency, effectiveness, and competitiveness. (Ali et al., 2019). This is reflected in Figure 2, which can be seen below (Ali et al., 2019, p. 20). Therefore, sustainability has altered logistics management by implementing the ideas of responsibility and making them obligatory for having the opportunity to maintain success in the modern world.
Technology and Innovation
One more trend that the U.S. economy has accepted and thus affected the sphere of transportation and logistics is the comprehensive implementation of technological progress’s results. For instance, developed counties have a global tendency to spread digitalization to all spheres of public life. The USA is not an exception to this global desire to automatize processes and make infrastructure more comfortable for individuals, businesses, and government structures.
Therefore, logistics and transportation are affected by the opportunities of adopting innovations that save time and people’s effort, at the same time improving performance indicators. For instance, the study by Arkhipov et al. (2020) concerns implementing genetic algorithms to logistics management to automatize processes, hence, improving the system’s efficiency. The study suggests a comparatively simple framework with vast potential that could help solve problems in logistics (Arkhipov et al., 2020). Therefore, current research on improving logistics management may cause drastic changes to the transportation and logistics sphere through creating and improving new instruments.
In support of this trend, the economy of the United States of America, similarly to other developed countries, is actively implementing the use of Big Data and the Internet of things. More specifically, their instruments of working with data are used in the sphere of logistics and transportation management, and this use is spreading wider. Hopkins and Hawking (2018) suggest that logistics have the potential of using “safety performance improvements in driving practices achieved via the introduction of truck telematics” as the technology would be demanded (p. 585). Moreover, using this technology may increase the company’s financial and performance indicators (Hopkins and Hawking, 2018).
The positive consequences of a transition to the use of Big Data are impressive and would affect many other spheres of public life, including the order maintenance on the roads. Hence, these changes should be implied by the vast logistics businesses in the long-term development strategies because they can contribute to reaching the purposes of the U.S. and the world additionally to companies’ goals.
The U.S. Economic Crisis
Increase in the Need for Perfect Logistics Infrastructure
One more factor that affects logistics and transportation management via the U.S. national economy, in general, is related to the crisis. An economic crisis affects all aspects of economic growth, development, and performance. However, the consequences and effects of a crisis may be peculiar depending on the crisis causes or scale. More specifically, this paper concerns the effects of the crisis related to the COVID-19 pandemic in connection with transportation and logistics.
The first consequence of the COVID-19 pandemic related to logistics was an increased need for fast distribution of the resources to the regions where medical organizations and people were lacking them. In other words, the pandemic has revealed the inconsistencies of the U.S. economy (and many other national economies, as well as the global economy) connected with an inability to maintain proper performance in unforeseeable situations.
A few studies related to this issue and analyze the consequences of the pandemic on national economies. For instance, Singh et al. (2020) claim that the health care supply chain and food supply chain suffered drastically at the beginning of the pandemic because most of the logistics activities were paused. The article suggests ways to deal with the lack of food grains, medicine, and other vital products during the pandemic by improving the management of supply chains. However, the authors offer solutions that could be used in the future, while in 2020, supply chains were disrupted.
The inability of the existing logistics system to provide people with the necessary resources was accompanied by an increase in demand for goods and services because people were scared of being left without further access to goods. Then, the unemployment in the U.S. increased, which triggered a decrease in national demand (The effects of the coronavirus disease (COVID-19) pandemic on international trade and logistics, 2020). Flaws of logistics management revealed at the beginning of the pandemic resulted in a 30,8% decrease in the U.S. exports during the first five months of 2020 (The effects of the coronavirus…, 2020). Therefore, the economic changes have led to the situation when logistics management has to make decisions to trigger changes that would improve the situation and save lives.
Decrease in the Need for Passengers’ Transportation
From another perspective, the COVID-19 pandemic had a contradictory effect on transportation management. Due to the limitations on traveling worldwide, the need for transportation of tourists, business travelers, and other visitors decreased drastically. Sun et al. (2020) research show that the transportation system suffered due to the demand decrease and absence of international movements. The economy of the United States adapted to the new limitations relatively fast – digital technologies allowed people to continue working without having to move around the country. Therefore, the demand for movements among the states and international movements still has not recovered.
Unique Features of the Economy of the USA
The economy of the United States of America, like other national economies, has its special features and characteristics. These unique aspects contribute to the difference between transportation and logistics management, too. Although the economy of the United States of America is not entirely different from other countries of the world, its specificities predetermine some details of the infrastructure and the economic processes, which result in changes in the logistics and transportation sphere.
Form of Government Organization
The United States of America is a federal state, meaning that it consists of autonomous units – states. Therefore, as united, they form a coherent state, communications between these units are highly significant. There are many reasons for it – from the need to distribute resources among production facilities to providing a high-quality transportation network inside the state. According to Sun et al. (2018), this peculiarity influences logistics and transportation systems because the business requires an expansive logistics network to distribute the produced goods in different states. Moreover, the constant development of the logistics system is required by people who travel between the states for different reasons – for business purposes, to visit their relatives, for shopping, or to travel as a tourist. Therefore, logistics and transportation management systems in the United States of America are affected by the necessity to have a superior logistics system for maintaining communications between the units of the country.
The Results of the Previous Research
Overall, the literature review has provided an overview of problems that the economy of the United States of America has faced and the consequences they have caused to logistics and transportation management. The review has also emphasized that the connection between the changes that occur to the economy as a whole system and the changes that happen to logistics and transportation systems is robust. In other words, if the economy of the USA is affected by some factors, logistics and transportation would most certainly be affected too.
The results of the reviewed studies have shown that the changes that occurred to the economy of the USA in the past two years relate to global trends, economic crisis, and the economy’s peculiarities. Global trends regarding this perspective include a swift to a sustainable economy and a tendency to implement the results of technical and technological progress in all spheres of public life, including every economic process.
The economic crisis, which impacts logistics and transportation, is discussed in the paper, is related to the COVID-19 and the necessity to isolate people from each other to prevent further spreading of the virus. Peculiarities of the Unites States’ economy are connected with the widespread and complex logistics and transportation system because of the form of government organization of the country.
The reviewed studies suggest different solutions to the present and future problems that may occur in logistics and transportation in the United States of America. For instance, they emphasize the necessity to reduce the number of flights due to their negative influence on the environment caused by the emission of greenhouse gases. In addition, they suggest developing and using a new logistics framework to maintain the high performance rates of companies and, through them, contribute to the improvement of different regions. Moreover, there were ideas on optimizing the logistics system by analyzing the expenses it requires and substituting people with automatic systems where it is possible. The range of suggested solutions was broad and covered almost every aspect of the discussed problem.
The Potential New Solutions
Ecology
However, there are certainly more solutions to the problems in logistics and transportation that may be caused by the changes in the national economy of the United States. For example, regarding the sustainability trend and the ecological aspect, the main problem that may appear in this field is stricter rules that would make market competition unbearable for some companies and lead to monopolization. The simplest solution here is implementing standards containing ecological norms for the business and logistics organizations in particular. These standards should be developed on an international level, or at least on a country’s level so that the market competition is appropriately regulated.
Social Responsibility
Other problems may occur regarding social responsibility. This sphere might trigger changes in the standards, and the solution would be similar to the one described above or in the social perception of logistics companies and their influence on the world. Logistics and transportation companies would have to consider the purpose of social equity that the United Nations have placed and introduce measures towards this goal (Take action for the sustainable development goals, n. d.). Moreover, companies specializing in passengers transportation would have to change their pricing policy if it is required to make the prices more suitable for different social groups.
Economic Development
As far as the economic aspect of sustainability is concerned, companies related to logistics and transportations may experience some changes, too. For example, the economy of the United States of America may experience a lack of available workplaces and a consequent growth of unemployment rates. This may happen for different reasons caused by the COVID-19 pandemic and the economic crisis – for instance, numerous entrepreneurships’ closure due to the inability to maintain their operational performance during the pandemic. Another reason for the unemployment increase may be the change in people’s behavioral models caused by the pandemic and self-isolation in particular. People may not want to work for companies they used to do because they have changed their attitudes towards their corporate culture or values.
There may be many more psychological reasons for such changes because coronavirus has influenced people’s mentality drastically. Therefore, companies related to logistics, as well as the business of other economic spheres, would have to create new workplaces for people in need to maintain the proper sustainability level. This may be somewhat difficult with the planned swift to automatization, but businesses could create workplaces for technical support or control of the implemented innovations.
One more measure could be related to providing the necessary educational programs for working at such vacancies. Moreover, logistics and transportation companies could introduce a system of discounts or bonuses for people who have lost their income due to COVID-19. Generally, the measures would be related to the humanization of the working process, implying changing the attitude to employees simultaneously with its dehumanization meaning using new technologies.
COVID-19 Pandemic
Considering the crisis caused by the coronavirus-related pandemic, the solution to its repercussions is still not clear, as no national economics has recovered from it yet. However, the amount of research on the topic is vast and proliferates, so the measures needed for returning the economy to a healthy state would probably be worked out soon. Furthermore, the turbulent and highly mutable conditions regarding logistics and transportation when the demand grows from one perspective and falls from another leave questions concerning the future development of the sphere.
The main direction of helpful changes here may be following the progress – in other words, automatizing as many logistics processes as possible. This would allow continuing working in the conditions of a global pandemic because minimum human contact would be required; hence, the logistics companies would stay on the market. Furthermore, this measure would contribute to the solution of the main problem of the pandemic – the problem of goods’ deficit.
Special Economic Features
Finally, the sphere of the United States’ peculiarities does not frequently cause problems, although it is impossible to make predictions that would inevitably turn to reality. For instance, problems may occur concerning the lack of resources in some states in comparison with others. In this case, although the economy of the United States of America is a market economy, the government should interrupt the natural processes and distribute the lacking goods.
This, of course, implies importing the needed amounts of goods but not overusing this instrument not to increase inflation. Moreover, to maintain the high-quality performance of the United States’ transportation system, the management should timely and relevantly renew the transporting crafts and check communications between different cities and states. This way, the ability of people to move around the country and beyond for their reasons would be ensured, which would also contribute to the unfolding of economic processes both inside and outside the country.
Conclusion
To conclude, the influence of the economy of the United States of America on transportation and logistics management is broad and robust. This influence is primarily related to the effects that impact the national economy, which, in return, affects different smaller spheres and aspects of itself, including all kinds of economic relations. The main points of such influence that have been researched are connected o global sustainability and digitalization trends, the economic crisis caused by a coronavirus, and peculiarities of the USA as a state.
However, the range of solutions listed in the reviewed articles is not all-encompassing. Therefore, more solutions to the problems which occur as repercussions of economic changes may be suggested. For example, solving the problem of stricter sustainability compliance requirements may be through developing international standards so that the competitiveness would not become too harsh. Concerning the social responsibility aspect of the sustainability concept, it may require some steps from the companies which do not plan to be overcome by the competitors in the direction of increasing availability.
For instance, in terms of contributing to the social equity goal stated by the United Nations, companies may alter their pricing policies to make tickets more available for customers with different levels of income.
Concerning the economic aspect of the sustainability concept, there would be necessary for companies that work in the logistics and transportation sphere of the economy to adapt to the changed conditions. For example, logistics businesses may have to participate in creating new workplaces to decrease the country’s unemployment level, which growth was caused by the COVID-19 pandemic. In other words, the logistics-related sector of the economy of the United States may be involved in the processes aimed at repairing the economy, which may turn to long-term tendencies.
The economic crisis caused by the coronavirus may trigger more changes than it is commonly assumed. In this regard, the main issue which is probable to appear in the nearest future as a repercussion of COVID-19 is the unstable condition of the market caused by contradictory demand dynamics. Solving this problem on a sophisticated level would imply introducing new technologies to the logistics and transportation practice.
Moreover, the adverse effects of the modern economic changes may be enhanced by the peculiarities of the economy of the United States of America. For instance, one of them is the complexity of the country’s logistics communication network. The suitable solution to such problems would be maintaining the proper level of the network’s quality concerning the modern technologies and global changes, which would allow management to avoid complete failures.
Generally, the research on the topic is thorough, but aspects of the interaction between the U.S. economy and transportation and logistics management are not appropriately covered. There is no recent research on the topic of the impact of the United States of America’s economy on logistics and transportation. However, the research covers the most evident aspects of their interaction, including the pandemic, commonly known global trends, and specific economic features. Future research on the topic could be devoted to several directions.
Firstly, it could cover the practical aspects of the results of existing studies – for instance, of implementing new frameworks to logistics management or automatizing processes related to the researched sphere. Secondly, future research could touch on the connection between the international economy and its processes with the inner processes of the United States’ national economy. This would allow us to assess and predict changes in different economic sectors depending on global events. Thirdly, topics could connect with the research of the same structures interacting oppositely, meaning that studies could be devoted to the influence of logistics and transportation on the U.S. economy.
All things considered, there is a wide range of research opportunities regarding this topic, although it does not seem to be that deep at first sight. Thus, the research should continue to prevent future negative tendencies in the logistics and transportation spheres development and ensure the economic efficiency of the vast business.
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