Chapter 4

Transportation and Communications in World Economy



1.     Improvements in transport efficiency and flexibility have changed the patterns of human life.

2.      From the 16th century on transportation has helped to open foreign markets necessary to support capitalism.

3.     ‘Annihilation of space by time’ poses the question of how and by what means space can be used, organized, created, and dominated to facilitate the circulation of capital.

4.     Economic development is less dependent on relations with nature and more dependent on relations across space.

5.     Improvements in transportation and communication spurs specialization of location that increases productivity and spatial interaction.

6.     Specialization occurs as long as production cost savings exceed transport costs.


Transport costs in the World Economy


1.     Initial assumptions of transport costs in Alfred Weber’s industrial location theory

a.      Transport costs are a linear function of distance.

b.     For simplicity, other factors affecting line-haul costs except distance are ignored.

c.     Transport costs consist of terminal costs that are fixed in the short-run plus line-haul costs that increase linearly with distance.


2.     In reality, line-haul costs are more complex base on typographical factors and economies of long-haul.  Transport rates vary with carrier competition and stepped freight rates (absorption and phantom freight), route demand, and backhauling. Terminal costs change with innovations, including deep-water ports, containership of products at ports, and agglomeration economies at transport nodes.


3.     Commodity variations in transport rates depend on loading and packaging costs, damage and risk variation of shipping, shipment size, regularity of movement, special equipment and services required, and elasticity of demand.


4.     Freight Rates are affected by the (a) carrier competition v. government regulation, (b) route demand that affects traffic density, and (c) back hauling rates that meet out-of-pocket costs, since fixed costs must occur anyhow.


5.     International transportation is affected by the regime governing the transport mode (by air and by water)

a.      Air space is controlled by sovereign countries.

b.     Shipping favors developed countries over developing countries in establishing rules of shipping and rate structures.  Established by shipping cartels.


Transport and Location


1.     Weber’s model predicts an end-point location for transport-oriented firms that produce a product with only moveable resource and one moveable commodity.

2.     Firms will locate to minimize transport costs.  ‘Weight-losing’ firms will locate at the resource site while ‘weight-gaining’ firms will locate at the market site if the transport rate is the same and they share a constant transport route between the two sites.

3.     Non-linear line haul costs and fixed terminal costs reinforce end point locations.

4.     Variance in terminal costs at the two locations, transport rates between resources versus finished goods, or production costs between the two sites can affect the location decision.

5.     Cost-insurance-freight pricing (freight absorption and phantom freight) can affect the geographic market of the resulting location.


Routes and Networks


1.     Routes and networks violate the assumption of linear, homogeneous transport costs.

2.     Route ways do not exist by themselves, but movement of goods, people, and information are highly channeled into organized networks.

3.     A graph of a network consists of two elements.

a.      A set of vertices (V) or nodes representing terminals (town, RR station, airport)

b.     A set of connecting edges (E), lines, or links (highways, RR lines, air routes)

4.     Network connectivity is captured by the relationship between edges (E) and vertices (V).

a.      The simplest measure of connectivity is the beta index= E /V.

b.     A large number of edges indicated a well-connected network.

c.     Developed countries have higher beta indexes than developing countries.

d.     A beta index of one represents complete simple connection but without interconnection.

5.     Network accessibility measures the shortest paths from each vertex to every other vertex. 

a.      Accessibility of a vertex is Ai = Sum dij where dij is the shortest path from vertex i to vertex j.  Each vertex has a value A that shows up as a row on a shortest-path matrix.

b.     The Shimble or dispersion index is defined as sum of the row sums of a shortest-path (connectivity) matrix for all vertexes in the system.


Density and shape of networks


1.     Connectivity and accessibility measure access but not density of use of networks. 

a.      Density is the number of route miles per unit area.  Density-decay occurs around cities and decreases with city size.

b.     Population density is strongly correlated with transport network density, but also is higher for developed countries than for developing countries.

2.     The shape of transport networks varies among countries.

a.      In developing countries often reflect their colonial history with a strong directional focus, resembling drainage systems that converge on coastal ports (typically fan shaped).

b.     Developed country networks are more lattice shaped, offering greater internal interchange and a more even geographic distribution of places.


Location of Routes and Networks


1.     Location depends on demand-supply relationships between places that are more profitable when they are linked together by a transport route.


2.     Fixed and variable costs of construction depend on length of roadway and traffic density.  (Other conditions can affect routes, such as political influence).


3.     Example of minimum distance networks among five towns:

a.      A branching network has low fixed costs of road construction but somewhat higher operating costs results in least builder’s cost network that connects to points to a central artery.

b.     A circuit network has high fixed costs, but low operating costs, resulting a least user’s cost network with connection among points, such as electrical circuitry.

c.     A hierarchy network is the shortest connection between a central city and all other points, resulting in a hub-and-spoke configuration, such as airlines.

d.     A Paul Revere network is the shortest distance between beginning and ending points, such as placement of pipeline.

e.      A traveling sales network connects the shortage distance when beginning and ending points are identical, shopping pattern or postal delivery.


4.     Deviation from straight-line transportation paths include

a.      Positive deviations that make a path longer to increase traffic.  Common in early stages of development but declines with development.  (Interstate highway system)

b.     Negative deviations reduce the distance traveled through high-cost areas, such as mountains and waterways.


Historical Development of Transport Networks


1.     The development of induced settlement, industrialization, and urbanization define and reinforce each other.


2.     Early extension of transport in developing countries extended geographic penetration from the coast, reflecting the following motives:

a.      The desire to connect an administrative center on the sea coast with an interior area of political and administrative control;

b.     The desire to reach areas of mineral exploitation; and

c.     The desire to reach areas of potential agricultural export production.


3.     Transport development and urban growth are self-reinforcing in stages, according to the Taafee, Morrill, and Gould model.

a.      In stage one, following early colonial conquests, a system of settlements is created along the seacoast.

b.     In stage two, transport links are developed between key coastal cities and interior mining, agricultural, and population centers.  Export-based development stimulates growth in the interior.

c.     In stage three, feeder routes begin to develop between inland centers.

d.     In stage four, lateral development enhances the competitive position of major ports and inland centers.

e.      In stage five, a transport network interconnects all the major centers.

f.       In stage six (final stage), the development of high-priority linkages reinforces the advantages of urban centers that have come to dominate the economy.


4.     Cumulative causation results in a concentrated and polarized pattern of development.


5.     P.J. Rimmer identified an alternative transport development strategy in Southeast Asia when colonial powers’ superimpose a transpose transportation and development system on the economic and cultural system of a less developed economy.

a.      The precontact stage is characterized by no transportation or trade between a developed country and an underdeveloped country that has only a rudimentary transportation system.

b.     The beginning of colonialism stage is an initial contact between regions but with limited social, political, or economic influence by the developed country except to establish permanent trading posts and garrisons.

c.     The high colonialism stage results in the developed country (European power) establishing inland transportation system among trading posts and adding new capital.  Diversification begins with greater intensity of manufactured goods and natural resource exports.

d.     The neocolonial stage enhances modernization and diversification in transport and economic development.


6.     A independence and codominance stage can be added to Rimmer’s model as a colony develops into a regional economic and transport power on its own and achieves full independence.


Flows in Networks


1.     Network flows involve spatial interaction that experience a distance decay (negative exponential function).


2.     A simple gravity model defines a market boundary as the point in which gravitational pull between two directions is identical.


3.     Gravitational pull is directly related to relative size (economies of scale) and inversely related to distance squared (transport cost savings)


4.     Reilly law of retail gravitation can be used to predict the breaking point or boundary between two cities with varying population connected by a transport artery.  The breaking point, BP, distance from the center of a larger city, C2, to a smaller city, C1, is the distance between the two cites divided by 1 plus the square route of the population of city 2 divided by the population of city 1.


Technological Developments


1.     Early ‘hoof and foot’ and seashore economy confined markets and urban form to relatively small cities.


2.     The steam engine, invented by James Watt in 1769, paved the way for ocean liners (1807) and railroads (1829).  The era of cheap transportation had arrived.


3.     Steam power was most useful for movement among urban areas rather than within urban areas because of effect on environment and economies of long haul (firing up the furnace versus keeping it going.)  The first electric trolley system was developed in Richmond, Va. In 1888 that significantly increased the effective area of commuting. 


4.     The internal combustion engine began the American ‘love affair’ with their automobile and began the movement toward longer distance commuting.  (Aided by Interstate highway system beginning in the 1950s.)


5.     Steam turbines and then diesel engines increase bulk sea carriers of commodities.  The Suez Canal in 1869 and the Panama Canal in 1914 dramatically reduced distance for international trade. 


6.     Air transportation has become the standard mode for long-distance travel.


Cost-space and Time-Space Convergence


1.     Transport improvement have led to a progressive reduction in the cost of travel and travel time between places,


2.     This has increased the ‘hinterland’ of market cities.


3.     Larger market increased specialization and divisibility of production, adding to productivity.  Economies of scale and agglomeration economies associated with city size lower production costs to help compensate for higher land costs and wage rates.


4.     Transportation and communication infrastructures are a reflection of the level of economic development achieved by a country or region.


Transportation Policy


1.     The theory of contestable markets (low fixed barriers to entry) paved the way for deregulation of the airlines and other transportation facilities.


2.      In 1978 the Airline Deregulation Act reduced route and fare controls and phased out the CAB’s control of a ‘natural monopoly.’


3.     Hub and spoke networks emerged with consolidation (and bankruptcies).  This system has advantages and disadvantages that affected flight availability in some areas and flight congestion in others.  Rates have fallen and routes eliminated in response to market demand and excess capacity.


4.     Controversy over location and transport of nuclear wastes and the selection of Yucca Mountain Nevada for storage of nuclear waste from commercial power plants has resulted from NIMBY (not in my backyard) and MIMTOO (not in my term of office) effects among over 100 temporary storage sites.



 Personal Mobility in the United States


1.     New concerns are developing over the rising levels of air pollution and expressway congestion created in urban areas.  New technologies like intelligent vehicle highway systems (‘smart’ cars and ‘smart’ highways to monitor and report traffic flows and to automatically break to avoid collisions) to enable greater traffic volumes; and/or strategies to slow peak-period demand during journey-to-work trips or to encourage higher levels of vehicle occupancy (HOV lanes) are used by cities.   The best inducement is to increase the price of adding to congestion and pollution with the use of time of day tolls. 


2.     Why the growth in demand for urban personal automobile use rather than public transportation?  Low operating cost of private automobile, increase female use, lack of flexible alternatives modes, demand for mobility, reduced average size of households.


3.     Intercity transportation on expressways can be reduced with high-speed trains with magnetic levitation.


4.     Globalization will increase demand for supersonic aircraft.  (LA to Tokyo in two hours—rather than current 12 hours)


5.     Graphical applications relate organization of activities and resources to reach a desired objective.  Transportation planning using GIS applications will improve coordination of system.


Communication Improvements  (Including projections)


1.     Communication technology based on fiber optics and digital technology has replaced the telegraph and is making the global office a reality. 


2.     Computers are adaptive to repeatable tasks (automated bureaucracy), freeing workers to organize and make decisions that are customer or results-oriented rather than activity based.


3.     Firms can outsource to gain access to management consultants, accountants, and lawyers without having them on staff.


4.     Smart television will increase the speed of learning for new training programs and distance learning will come from universities throughout the country.


5.     Continuing education programs will be fast-tracked based on profession needs as opposed to broader, liberal arts education.


6.     Networked computers allow for flexible factories that produce small runs of niche products with little or no inventory and local supervision or coordination.


7.     Large scale, low earth orbit (LEO) satellite transmission systems and wireless communication will replace coaxial cable and copper wire infrastructure linking households to home based shopping, banking, working, and entertainment and businesses to hundreds of applications.


8.     IT is changing the role of women in the workforce, allowing them to work at home while raising children.