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Summary Transport Economics.
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Summary of the course Transport Economics based on the lectures and the book.
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SAMENVATTING : TRANSPORT ECONOMICSChapter 1: The traffic and transport system
1.1 Derived demand
Derived demand: no one transports just for fun
it has a purpose because you want the
goods to be somewhere or you want to be
somewhere
Dg = demand for goods in Ghent
Is the willingness to pay for one good
The lower the price, the higher the quantity
Sa = supply of goods in Antwerp
Is the delivery price for the supplier
The higher the supply, the higher the price
Equilibrium where the two curves cross
Dt = demand for transport
= Dg – Sa
= the maximum cost of transport
St = supply for transport
The equilibrium between Dt and St takes into account the transportation costs
In point C and K, there are different customers who are willing to pay more for the goods since the
equilibrium is at a lower price, there is a consumer surplus for these customers.
The suppliers who are willing to sell at a lower price (B and L) get extra profit supplier surplus
Derived demand of transport
Traffic and transportation are the result of primary needs for goods and services, they don’t arise
spontaneously
o Traffic and transportation have an intermediary character derived need
The traffic and transportation system
Transportation: takes into account the two permanent components of traffic (means of transport and
infrastructure) + variable component load
It exists of the means of transport, the infrastructure and the load
Transportation is about the amount that is transported
Transport doesn’t take into account the load, it’s the amount that could be transported
The transport infrastructure is almost entirely financed by the government
1.2 Transportation subsystems
Classification by type of load
Passenger transport
o Private = the government doesn’t impose sanctions and the operator can chose who uses it
o Individual: car, bicycle, motorbike, walk by foot
o Common: school buses
o Public = government-imposed regulations, everyone can use it
o Individual: taxi
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, SAMENVATTING : TRANSPORT ECONOMICS
o Common: train, tram, bus
Freight transport
o Bulk cargo = commodities that are transported in large quantities and without packaging, the
items are consigned by weight or volume
o Dry bulk: non-liquid commodities ex. coal and grain
o Liquid bulk : chemicals, petroleum products, crude oil
Can be transported by pipeline as well
Gases can also be transported in liquid bulk form
o General cargo = goods that are consigned per item or package
o Conventional cargo
Break-bulk: goods in small packaging ex. bags, boxes that are loaded on pallets
ex. sugar, fruit, flour
Neo-bulk: goods that are shipped and handled as a single item ex. steel products,
heavy machinery
Roll-on/ roll-off: trucks and passenger cars that are driven onto an off ships via
ramps
o Containerized cargo
Classification by transport mode
Passenger transport
Criteria: price, comfort, accessibility and speed
The relationship between speed and accessibility is often inverse: private cars have almost
unlimited accessibility (you can use them always and everywhere), but considering traffic
congestion, the speed of transportation is often higher with public transport who doesn’t suffer
from traffic jams
The accessibility of public transport is dependent on the number of routes and the distance
between the stops of the route
For busses and trams, there are way less vehicles required to transport 1,000 passengers
Freight transport
The modal choice is the choice which transportation mode we’ll use
Is dependent on the type of goods that are transported and the transportation distance
Type of goods
o Valuable goods, perishable goods and fragile goods
Distance: continental 1. Road transport, 2. Rail transport
Distance: intercontinental 1. Sea-transport, 2. Air transport
For valuable goods, the price of transport doesn’t really matter
o Non valuable goods (bulk goods)
Distance: continental inland navigation (inland waterways) and train
Distance: intercontinental 1. Sea-transport, 2. Air transport
The price of transport is an important factor for non-valuable goods
Intermodal systems: using different transport modes for the shipment
Pre-carriage: the transportation of goods from the shipper to the terminal
On-carriage: the transportation of goods from the terminal to the customer
Operations at terminals: at the terminal, the load is transferred from one mode of transport to
another and storage of the goods
The movement of the load between terminals: by rail or inland waterways (IWW)
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From the shipper to the terminal, trucks are often used to get the goods to the terminal
Scheduled and non-scheduled transport
Scheduled transportation: fixed routes with fixed stops at fixed times ex. public transport and
scheduled airline flights
Non-scheduled transportation: not operating according to a fixed schedule ex. tramp shipping
(ordering a ship only for you), taxi
Own account vs. third party service provider
Third party service provider: hire a company to do your transport
If you use your own trucks, you can’t use the trucks to transport other goods if the truck
transports your good, it will always have to come back empty
That’s more expensive than when you hire a third party transporter who can come back with
other goods for another company he works for
Advantage of own trucks: less legal requirements
1.3 Measuring transport and transportation performance
Method 1: Quantity transported
Passenger transport
o Traffic performance: number of seats (s)
o Transportation performance: number of passengers (p)
Commodity transport
o Traffic performance: capacity-ton (Ct)
o Transportation performance: quantity transported (ton)
From a government point of view, traffic performance is your interest
In Belgium, half of the trucks are empty or rarely full big waist of capacity we need to look
at the transportation performance as well
Method 2: Quantity transported + distance of transportation
Passenger transport
o Traffic performance: number of seat-kilometers (skm)
o Transportation performance: number of passenger-kilometers (pkm)
Commodity transport
o Traffic performance: capacity-ton-kilometers (Ctkm)
o Transportation performance: ton-kilometers (tkm)
In Belgium, a large percentage of the traffic on inland waterways are related to import (the goods are
shipped from another country to Belgium), export (the goods are shipped from Belgium to another
country) or transit (they cross Belgium to move from one country to another)
Of these tons transported for domestic transportation (loading and unloading in Belgium), only
22% was transported by Belgian bargemen
Cabotage = the transportation of goods or passengers between two points in the same country
by a company from another country
Road freight transport became more and more popular the last years: because it’s more flexible, easier
to get the product from door to door, faster transportation mode, less bulk goods that need to be
transported
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1.4 Application
Is transport cheap or expensive?
It depends on the value you can get on the other side
There is too much transport because transport is too cheap
Building bigger roads with more lanes wouldn’t solve the problem of traffic jams, it’ll only solve
the problem for a few months but after that a lot of people who used another transportation
type, will come by car because they think they’ll get there faster and then the traffic gets
jammed again
Certain types of transportation (like trucks) need to become more expensive for other transport
modes to become more interesting, because they are too cheap now because they don’t get
charged for the external costs they cause
Where does the hyperloop fit in the typology?
It’s public transportation: everyone can buy a ticket, it’s accessible to everyone
It can be both passenger and freight, but the intention is to mainly transport people
The hyperloop would pass every station at such a high frequency that it would be non-
scheduled but theoretically it’s scheduled
It’s third party service provider because hyperloop isn’t owning the people or goods they’re
transporting
Exercise 1: one person travels in a private car (5 seats available) for 100 km
Traffic = skm: 5*100 = 500 skm
Transportation = pkm: 1*100 = 100 pkm
Efficiency: 100/500 = 20%
Exercise 2: 200 passengers travel on the underground for 10 kilometer, they use 20% of the capacity
Traffic = skm: 200*(100/20)*10 = 10 000 skm
Transportation = pkm: 200*10 = 2000 pkm
Passenger modal shift: what is the problem and what are possible solutions?
Modal shift: going from using one kind of transportation to another
Modal split: the distribution of means of transport in percentages
Problem: we use a lot of cars (too many) because it’s comfortable
Possible solution: road pricing (letting people pay for every kilometer they drive in a car)
making driving by car more expensive so that the other transportation means become more
interesting
Freight modal shift: what is the problem and what are possible solutions?
Problem: there are too many trucks on the roads because it’s cheap and flexible
Possible solution: using drones for some kinds of transportation, charge trucks for the external
costs they cause (air pollution, congestion,…)
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