Transport, transport trends and the economy

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  • Created by: Munibah
  • Created on: 19-03-13 12:30


Transport is the movement of people or goods for various personal and business reasons.

-Essential part of supply chain, providing the physical link between producers and consumers.

-Mode of transport: means of transport, basically road, rail, air and sea transport.

-Infrastructure: Anything that provides for the operation of transport.

-Scope of transport:

Decisions on modal choice are made by millions of consumers; decisions on infrastructure in contrast are in the main taken by the government, particularly in the case of roads.

The day to day operation of the main modes of transport is very much in the hands of private companies and individuals. The government has limited say through the subsidies that are paid to rail and to local bus passenger operators.



-Derived demand: demand that depends up the final output that is produced, or on the demand for another item.

-National Travel Survey 2003 provides considerable information on why people travel:

3 main groups: work and education = regular demand / shopping and personal business / social and leisure purposes.

84% of all trips requiring transport are made by private car, either as driver/passenger

Rails main function is for the journey to work or in the course of business

Local buses account for 8% of all trips, the bus is widely used for all types of journey.


-Passenger transport: demand = f (price/ price of substitute/ income of passengers/ quality variables/ availability/ morality)

-Goods transport: demand = f (price/ price of substitutes/ speed/ quality of service/ goods to be moved)

-Fares charged by bus and rail companies over the past decade have increased above the rate of inflation and above the change in costs of owning a car.

-Where travel is for personal reasons price is invariably an important consideration. This is less important where travel is for business reasons.

-Recent success of low cost airlines (Ryan Air, Easy Jet) has, in part, been due to the fares charged being affordable to people who would have not otherwise have travelled. Same can be said about promotional fares on trains; operators are keen to see their seats occupied, hence fares are set at, or a little above, marginal cost prices.

-Car availability is commonly a crucial variable in determining transport modal choice. However car users tend to have a narrow view of the price they are paying, often only thinking in terms of variable cost. When seen in these terms, car is much more competitive than rail for all types of journey.

-Freight transport; less decisions to make mainly because of the goods that are to be moved and the time scale involved.

Most inland transport businesses have no choice other than to move their goods by road. Their only choice is that of whether to use their own vehicles or a pro hauler or logistics contractor.

For some goods choice is available, in these cases the cost of transportation, type of product…


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