Commerce and Transport: A Comprehensive Guide
What is Commerce?
Commerce consists of selling and buying to satisfy our needs.
- It is a very ancient activity that helped the contact among different cultures.
- At the beginning, the commercial activity was done through interchange, that is to say, one product for another.
- Later, coins appeared, and value was given to different products.
- Commerce became more important and commercial activities were done with faraway countries.
Elements in Commerce
- We need 4 different elements to have commerce:
- Salesmen: Is the person who presents an offer or the quantity of product that is ready to be sold.
- Buyer (customer): Is the person interested in the offer.
- Goods: Is the product exchanged. The prices of goods are established with money.
- Market: Is the place where products are sold.
Interior Commerce and Exterior Commerce
Commerce can be made in a country or among different countries.
Interior commerce. Is developed in the same country, we find 2 types:
Wholesale commerce: Wholesale buy big quantities of goods to sell to other businesses or salesmen.
Retail commerce: Retail commerce can be shops, markets, supermarkets or commercial centres.
Exterior commerce. Is commerce between two different countries. There are two types:
National goods: Sold to another countries, we call it export.
Foreign goods: Bought for our country, we call it import.
Commercial Balance
Commercial balance is the difference between the value of export and import.
Commercial balance can be:
Positive balance. If the value of export (sell goods to foreign countries) is higher than the value of import (buy goods to foreign countries)
Negative balance. If the value of imports is higher than export.
Payment Balance
Payment balance is the economic exchanges of a country. There are included material goods, services and financial goods.
Characteristics of Commerce in Our Days
International commerce joins the following characteristics:
- We can move big quantities of goods with big capacity and efficient ways of transport.
- There is a big net of commercial relationships among countries.
- It is an activity that gives employment to a very big number of people in the world.
- Everyday, commerce is more controlled by less companies, but these companies are very high and they work together with important banks.
International Commerce Exchanges
From the second half of the XX century, international commerce arrives to more places in the world and it has a very important economic influence in the world.
The biggest commercial volume is made among the European Union, Japan, China, Oriental Asia and United States.
Electronic products, electrical products, chemical products and manufactured products are the most important goods for international commerce.
The participation of other countries is less important.
These countries normally export raw materials and agricultural products.
Commercial Flows
Movement between salesmen and consumers is like a water flow, for this reason, we talk about commercial flows.
Raw Materials Flows
It is a very important aspect because a great consumers, so they can sell these raw materials.
About 40% of international commerce is made with raw materials.
The most important raw material in the world is petrol because it is necessary to develop industrial activities.
Manufactured Products Flow
It is a very important activity among developed countries. 80% of the exchanges are made among developed countries.
Brazil, India and China are also competing hard because they can sell very cheap, for these reason, they are called emergent economies.
Capital Flows
Capital flows move big quantities of money. Banks can lend this money to people or to companies.
Poor countries don’t have any participation in this type of commerce.
Capital flows are practically all done among Japan, Europe and USA.
Information Flow
Information flow has become very important in our days with the appearance of information and communication technologies.
In rich countries, we can have any information of the world in few minutes thanks to satellites, Internet, mobile phones, optic fibre, etc.
We call all these technological systems; information highways.
Information highways
Commercial Blocks
Globalization has made that everything or everybody is nearer than before.
These commercial blocks have in common:
- Proximity. Proximity helps integration and interchanges.
- Custom union. Economic integration helps to avoid the inconveniences of custom frontiers.
- Common front. When a group of countries obtain power together, they can compete and negotiate with other countries with more strength.
- Effort union. Working together for the same objectives is good because it is easier to achieve goals.
Transport
Transport is an activity that one thing or person is transported from one place to another.
Aerial, terrestrial or maritime are the transport systems that allow these movements.
Roads, railways, ports and airports are infrastructures needed to the movement of transport vehicles, that is to say, lorries, trains, ships, planes, etc.
Transport Functions
Nowadays, transport accomplishes three aspects:
- Transport allows the diary movement of people. The distance between home and work everyday is bigger, so there are more traffic and mobility problems.
- It is possible to move to very far away places. Tourism has become a world business.
- It has also made possible the movement of people to find better living and working conditions.
- It is possible the distribution of goods and services. To satisfy these needs, we have good communications everywhere.
- In places where there is good ways of communication, there is also big focus of industry.
Transport Revolution
There has been a revolution in the ways of transport and structures in the last 50 years.
The most significant changes in transport have been the following:
- Increase in tons, in trains, lorries, ships and planes.
- Inter-modality in transport. We can transport thanks to containers in lorries, trains and ships in a coordinated way.
- Speed increasing, especially in trains and planes.
- Roads and highways in better conditions. We have to spend less time in our journeys for the same trip.
- Increase in security. So when we drive, there are less possibilities of accidents.
- Price reduction. Because we can transport bigger quantities or more passenger in one journey.
- Telecommunication advances, especially Internet; we can coordinate transport so it can be safer and faster.
Transport Network
Organization and exploitation of a territory needs a good transport network, that is to say, a group of structures where we can circulate easily (roads, railways, etc…)
Transport networks are formed by lines that join two or more points making a net. This net is spread across territory.
Central points of these networks are important cities because they are the way outs and arrivals.
- We can find isolated networks
- We can find a network with the little structure.
- We can find well structured network
- In important economical areas like Europe, USA and Canada the transport network is dense so the movements work properly.
- In poor countries or places with few population transport network are scarce and not dense as happens in Africa and South America.
Terrestrial Transport
The most used transport system is the terrestrial. There is a good dense transport network. This is possible thanks to roads and railways.
Road Transport
Roads and highways are the most used transport for people and goods.
Roads have good structures in rich countries (good roads, highways and motorways) and not so good in poor countries (low quality structures and small number of networks)
Railways Transport
It is a good transport system to travel medium and long distances for people and goods.
It is a fast, safe and economic system that can bring a lot of people and a lot of heavy goods.
But it has a negative aspect, railways are too rigid so we have to use roads to complement railways transport.
Nowadays, we have really good trains as:
Aerial and Maritime Transport
Aerial Transport
Aerial transport is the fastest and more secure, for this reason, aerial transport is the most adequate:
- For long distance people movement.
- For light and valuable goods.
It is an expensive transport because planes consume a lot of carburant and maintenance is frequent and not cheap.
At the beginning, aerial companies were part of the government but now aerial companies are private.
These private companies have reduced prices so more and more people use planes every day.
Airports need very big spaces to have a safe system.
In airports, we can also find a lot of other businesses as taxis, shops, restaurants or hotels.
Aerial transport is so important that there is a coincidence among the most important airports and the most powerful cities in the world.
Low Cost Companies
The revolution in aerial transport has finally arrived to us because some aerial companies offer us plane tickets at a very cheap price.
These companies are called low cost companies.
They can offer us cheap prices because:
- They don’t have offices, so operations are done by Internet.
- They don’t offer free food or newspaper like traditional companies.
- They work in secondary airports with cheaper taxes.
Maritime Transport
It is the best system to transport heavy and dangerous materials (oil, cereals, minerals, cars…) to very far away places at a low cost.
Sometimes, maritime transport also uses rivers but these rivers have to be very big or regular like Guadalquivir River in Seville or Nile River in Egypt.
The biggest inconvenience is that is really slow, so few people use ships as a transport.
The other inconvenience is that ships sometimes transport dangerous materials that are a risk for seas and oceans.
In the last years, big disasters have happened as a consequence of ship accidents like The Prestige in 2002.
The Prestige polluted all the seas and beaches of Galicia.
When the water is polluted, fish can not obtain oxygen so fish finally die.