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), services (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 transported per unit of time and space is commonly used to quantify transport supply.

Transport demand. Transport needs, even if those needs are satisfied, fully, partially 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 passenger-km (or passenger-mile) is a common measure expressing the realized passenger transport demand as it compares a transported quantity of passengers with a distance over which it gets carried. The ton-km (or ton-mile) is a common measure expressing the realized freight transport demand. Although both the passenger-km and ton-km are most commonly used to measure realized demand, the measure can equally apply for transport supply.

• Modal supply. The supply of one mode influences the supply of others, such for roads where different modes compete for the same infrastructure, especially in congested areas. For instance, transport supply for cars and trucks is inversely proportional since they share the same road infrastructure.
• Intermodal supply. Transport supply is also dependent of the transshipment capacity of intermodal infrastructures. For instance, the maximum number flights per day between New York and Chicago cannot be superior to the daily capacity of the airports of New York and Chicago, even though the New York - Chicago air corridor has potentially a very high capacity.

• Passengers. For the road and air transport of passengers, demand is a function of demographic attributes of the population such as income, age, standard of living, race and sex, as well as modal preferences.
• Freight. For freight transportation, the demand is function of the nature and the importance of economic activities (GDP, commercial surface, number of tons of ore extracted, etc.) and of modal preferences. Freight transportation demand is more complex to evaluate than passengers.
• Information. For telecommunications, the demand can be a function of several criteria including the population (telephone calls) and the volume of financial activities (stock exchange). The standard of living and education levels are also factors to be considered.

• Entry costs. These are the costs incurred to operate at least one vehicle in a transport system. In some sectors, notably maritime, rail and air transportation, entry costs are very high, while in others such as trucking, they are very low. High entry costs imply that transport companies will consider seriously the additional demand before adding new capacity or new infrastructures (or venturing in a new service). In a situation of low entry costs the number of companies is fluctuating with the demand. When entry costs are high, the emergence of a new player is uncommon while dropping out is often a dramatic event linked to a large bankruptcy. Consequently, transport activities with high entry costs tend to be oligopolistic while transport activities with low entry costs tend to have many competitors.
• Public sector. Few other sectors of the economy have seen such a high level of public involvement than transportation, which creates many disruptions in conventional price mechanisms. The provision of transport infrastructures, especially roads, was massively funded by governments, namely for the sake of national accessibility and regional equity. Transit systems are also heavily subsidized to provide accessibility to urban populations and more specifically to the poorest segment judged to be deprived in mobility. As a consequence, transport costs are often considered as partially subsidized. Government control (and direct ownership) was also significant for several modes, such as rail and air transportation in a number of countries. The recent years have however been characterized by privatization and deregulation.
• Elasticity. The notion of price elasticity is at the core of transport demand and refers to the variation of demand in response to a variation of cost. For example, an elasticity of -0.5 for vehicle use with respect to vehicle operating costs means that an increase of 1% in operating costs would imply a 0.5% reduction in vehicle mileage or trips. Variations of transport costs have different consequences for different modes, but transport demand has a tendency to be inelastic. While commuting tends to be inelastic in terms of costs, it is elastic in terms of time. For economic sectors where freight costs are a small component of the total production costs, variations in transport costs have limited consequences on the demand. For air transportation, especially the tourism sector, price variations have significant impacts on the demand. There are thus differences among the obtained price elasticities, which raises questions about the transferability of the results to other locations and or other time periods. Hence, each case is characterized by a specific local environment in terms of modal choice options, budget/income of the transport user, spatial planning, price levels, etc. All these factors combined can make the behavior of transport users somewhat different across regions and settings.

Transportation yield management is the process of managing the usage price of a transport asset, such as the fare paid by users, in view of continuous changes in the demand. The goal of such an approach is to maximize profit in the context where the transport supply is fixed.

• A fixed transport capacity implying that transport demand is the only function that can effectively vary. For instance, the capacity of a scheduled flight or of a containership is fixed (known value) and cannot be readily changed without serious impacts on the quality of service.
• Unused transport capacity loses all of its utility, implying that transport suppliers cannot store for another time the services that have not been used. Once an aircraft or a ship has departed, its transport capacity is lost for the concerned airport or port. Any unused capacity is therefore a loss of potential revenue.
• Transport users are willing to pay different rates for the same capacity or service, implying that they value transportation differently based upon their priorities and time preferences. For instance, a business traveller needing to attend a meeting values differently the same airplane seat than a tourist would. The former would be willing to pay a high price to secure a seat on a specific flight while the later tends to seek discounted values and would be unwilling to bid above a certain price threshold. Also, time dependent users of cargo services (e.g. electronics) are willing to pay more for the same capacity than those who are less time dependent.