PRESENTED BY M.S.

SIJIN (ITL- FIRST YEAR)

Economic Importance of Transportation

Transport sector is an important component of the economy,

impacting on development and the welfare of populations. The economic impacts can be:

Direct impact
Relates to accessibility changes where transport enables larger markets and saves time.

Indirect impact
Relates to economic effect where the price of goods drop or

variety increases Other impacts Networks- setting of routes enabling new interactions between economic entities.

 Performance- improvements in cost and time attributes

forfreight movements. Reliability- Improvement in time performance,notably in terms of punctuality as well as reduced loss or damage. Market size- Access to wider market where economies of scale in production and consumption can be achieved. Productivity- Increases in productivity from access to a larger and more diverse base of inputs.
Canal shipping (1775) Railways(1850) Air(1950)

Telecommunication(1900) Roads(1900)

Technological innovations and economic growth are closely related and can be articulated with in the concept of cycles or waves.
1st wave(1785-1845)-Depended on innovations like water power,

textiles and iron(industrial revolution).conventional technology relying on sail ships was perfected which resulted in large colonial trade.Inland waterways were constructed. 2nd wave(1845-1900)-introduction of steam engines, application of coal as a source of energy, introduction of rail transport system resulted in easier inland transportation and commercial opportunities. 3rd wave(1900-1950)-Electrification was a major economic change as it permitted the development of machines and appliances,thus resulted in development of urban transit systems(sub ways and tramways).

 4thwave(1950-1990)-The post world war period

represented significant industrial changes like introduction of electronics,petrochemicals and jet engine which resulted in development of aviation industry.This enhanced mass market and mobility. 5th wave(1990-present)- The current wave relies on information systems which have modified transactional environment with new modes of communication , production and distribution(logistics).

Major impacts of Transport on economic processes

Geographic specialization- Improvements in transportation and

communication favor a process of geographical specialization that increases productivity and spatial ineractions. A given area will produce goods and services efficiently compared to other areas as long as appropriate transport is available for trade. Large-scale production- An efficient transport system offering cost , time and reliability advantages facilitates mass production. Increased competition- A wide array of goods and services become available to consumers through competition which tends to reduce cost and promote quality and innovation. Increased land value- Land which is adjacent or serviced by good transport services generally has a great value due to utility. Job creation- IA large number of direct(freighters, managers , shippers) and direct(insurance, packaging , handling, travel agencies, transit operators).

Socio economic impacts

There are many significant negative impacts of transportation , they are: Mobility gaps- Higher the income , the higher the mobility, which may give rise to substantial mobility gaps between different population groups. Costs differences- Locations which have low levels of accessibility tend to have higher cost for many goods as most have to be imported , often over long distances . This results in higher prices. Congestion- With increased use of transport systems,it has become increasingly common for parts of net work to be used above design capacity. Other impacts: Accidents Air quality Noise , Water quality , Land take.

TRANSPORTATION AND COMMERCIAL GEOGRAPHY

Commercial geography investigates the spatial characteristics of trade and transactions in terms of their cause,nature, origin and destination. It leans on the analysis of contracts and transactions from a simple commercial transaction involving an individual purchasing a product at a store,to the complex network of transactions maintained between a multilevel corporation and its suppliers. As each transaction involves movements of people,freight and information,there is a close relationship between the sphere of transactions(geographical setting of transactions) and sphere of circulation(the geographical setting of movements).

Relation between sphere of transaction and sphere of circulation

Sphere of transactions
Commercial geography transactions

Movements Transport geography

Sphere of circulation

Transaction costs
Search and information costs- cost related to finding right goods on

market. Negotiation costs- cost involved in reaching an agreement with the other party to transaction resulting in contract. Policing and enforcements costs- costs related to ensuring that both parties respects the contract , if not taking legal actions.

For trade to occur,several conditions must be met:

Availability Transferability Transactional capacity Value of currency Volume and scale

TRENDS IN COMMERCIAL GEOGRAPHY

Liberalization of trade (confirmed by WTO) has given a positive

growth of world trade and production. In spite of globalisation , much trade is still dominantly regional. Long distance trade is steadily growing . eg, china. Substantial growth of foreign direct investments resulted in reallocation of production capacities Interlocking partnerships between countries increased trade of supplies and equipments around the world. Economic growth taking place in Asian countries has been one of the most significant force shaping changes in commercial environment.

Role as a manager
Select the best mode of transportation.
Usage of maximum possible technologies for

transportation and goods movement.

U sage of cheapest way of transportation considering

time.

Widening market to different countries which results

in great exposure in world market.