The Relationship Between Freight Transportation and the Economy of A Country

The wellbeing of the economy of a country generally depends on a number of things. It is not dependent on a single entity. A complete analysis of an economy will clearly show that it is affected by multiple individual entities. Each of the individual entities has a specific impact on the stability of an economy. But, there are certain entities that tend to have a much stronger impact on the economy of a country than others. The government of the day is supposed to clearly identify each of these individual entities and determine how to prevent them from negatively affecting the economy of a country.

In economics, such individual entities which tend to affect the stability of an economy are referred to as economic sectors. They can be thought of as the sectors of a hard drive or compact disk. One of the most significant examples of the economic sectors is the freight transportation industry. This is a very important sector which individually affects the stability of the economy of any country to a very significant extent. It does not matter if the country is a landlocked one or not.

The economy of that country will be significantly affected by the freight transportation industry. If you are an economist or an economics enthusiast, you will obviously have some ideas about the relationship between the freight transportation industry and the economic development of a country. But, lay people may have issues understanding how economic development is related to the freight transportation industry. The following information can help explain the important relationship that is between the two.

"Each of the countries is able to benefit from the freight transportation industry in different ways."

Different Types of Countries Identified

What is important to bring to light is the fact that different countries are actually in existence. There are numerous countries that are exist today.  Each of the countries is able to benefit from the freight transportation industry in different ways. Therefore, it is important to highlight this difference in a bid to accurately understand how the freight transportation industry actually affects individual countries.  Governments around the world use this distinction between countries to know what kind of freight transportation would suit their countries. Generally, there are two countries which can be identified as indicated below.

• Landlocked countries: the landlocked countries are nations that do not have a direct access to the sea. In other words, these countries do not have a sea port or sea cost. They are surrounded by other countries that may have a sea cost or may be as landlocked as they are. These countries have to depend on other countries when transporting commodities to and from the boundaries of their countries. The economies of these countries would collapse without the freight transportation industry.
• Non landlocked countries: these are countries have their own sea cost. They do not always need to pass through other countries to transport their commodities from one country to another.

Different Economies Identified

There are also two economies which can be identified in relation to the freight transportation industry. Based on the difference, it is possible to deduce the impact the freight transportation industry can have on an economy of a country.

• Exporting based economies: these are economies are based on exporting various commodities to neighboring and far flung trading partners. Such economies would collapse without the freight transportation industry.
• Import based economies: these are economies that import most of their important commodities including clothes, electronic products and food. Such countries would collapse in the absence of the transportation industry.

Freight and Economy Relationship.