J.FeiAMC

1
International Transport Systems (M02)

• Organisation of this unit

2
International Transport Systems (M02)

• Learning objectives
• Explain how patterns of transport are created by
  patterns of demand
• Demonstrate your understanding of how changes in
  demand change the entire transport system
• Outline the possibilities in route selection
• Understand the costs and pricing of transport
• Outline the cost structure of transport

3
International Transport Systems (M02)

• Demand for transport
• Patterns of demand vs. patterns of transport
• The demand for personal travel
• Accessibility and mobility
• The demand for freight transport
• Changes in demand
• Supply of transport
• The elasticity of demand and supply
• Route selection
• Costs and pricing of transport
• Transport investment

4
International Transport Systems (M02)

• Demand for transport
• Patterns of demand vs. patterns of transport
• Patterns of demand generate patterns of
  transport

5
International Transport Systems (M02)

• Demand for transport
• The demand for personal travel
• Movement patterns
• (trips to and from work daily travel of
  children and students to and from schools,
  kindergartens or day care centres journeys for
  social reasons and leisure trips...)
• Increased length of journeys, as results of
  concentration of facilities and services, high
  level of disposable income and high car ownership
  
• The use of motorised transport
• However, there is another type of movement
  patterns

6
International Transport Systems (M02)
7
International Transport Systems (M02)

• Demand for transport
• Accessibility and mobility
• Availability of transport facilities
• Individual resources (health and financial)
• Desirability of the locations
• The effect of concentration of facilities and
  services
• Increased efficiency vs. accessibility

8
International Transport Systems (M02)

• Demand for transport
• The demand for freight transport three
  categories of freight transport
• Transport of raw materials (from the source of
  the raw material to the processing plant)
• Transfer of semi-finished goods (between plants)
• Distribution of finished products
• Freight transport on an international scale

9
International Transport Systems (M02)
10
International Transport Systems (M02)

• Demand for transport
• Changes in demand
• The reasons for changes
• Changes in the nature of industrial activities
• Advances in transport technology
• Increased disposable income
• Deregulation of transport markets
• The consequences of changes
• Decline of public transport
• Abandonment of rail and inland waterways
• Containerisation

11
International Transport Systems (M02)

• Supply of transport
• Transport services can be supplied by
• Government at national, regional or local levels
• Private enterprises specialising in the provision
  of transport services
• Manufacturers, retailers or wholesalers
• Individuals
• In transport, production and supply are carried
  out at the same time (perishability)
• The elasticity of demand and supply
• Demand elasticity the responsiveness of
  customers or potential customers to the changes
  in the prices on offer
• Generally, the demand for freight transport is
  inelastic. However, on a modal and specific
  carrier basis, demand is elastic.
• Elasticity may affected by a) alternative
  practical available modes b) alternative
  supplier available c) service factors and d)
  income.
• Supply elasticity determined by a) the ease of
  entry into the supply market b) the ease of
  transport facilities to be converted from one use
  to another and c) the supply of energy.

12
International Transport Systems (M02)

• Supply of transport
• Route selection
• The costs of construction vs. the costs of
  operation

13
International Transport Systems (M02)

• Costs and pricing of transport
• Costs of transport
• Monetary costs
• Acquisition, improvement, operation, maintenance
  and replacement of transport facilities
• Compensation for damage of the property, or
  injury to the person, or other
• Insurance of risks
• Interests on borrowed money
• Taxation
• Profit dividends on owners capital
• Repayment of borrowed money
• Repayment of owners capital.
• Non-monetary costs
• Environmental costs pollution, noise, energy,
  landscape, vibration etc.
• Accident costs injury, death etc.

14
International Transport Systems (M02)

• Costs and pricing of transport
• Pricing of transport
• The revenue generated from providing the
  transport service must be equal or exceed those
  costs if the service to be successful
  financially.
• Marginal-cost principle the price should equal
  or exceed the sum of
• Costs borne directly by the user (vehicle and
  petrol, users time)
• Costs imposed on the infrastructure users
  (provision and maintenance of the
  infrastructure)
• Costs imposed on other infrastructure users
  (delays, increased risk of accidents)
• Costs imposed on society in general (pollution,
  noises etc.).
• Pricing discrimination a transport provider
  discriminates between different groups of
  customers by charging different prices for
  identical units of supply.
• A monopoly control of the supply of services
• Market segmentation
• Consumers have extra money

15
International Transport Systems (M02)

• Transport investment
• Construction and improvement of infrastructure
  (roads, railways, terminals and communications),
  design of new vehicles, and other R D
  activities
• National policy
• Deregulation and privatisation
• Transport and economic development